I am reviewing the conflicts of interest policy and register.
The PLC directors register is “easy” as it largely relates to the external directorships / membership of third party organisations.
However our legal team are very insistent that we should have registers set up for all the wholly owned subsidiary companies (we only have UK).
I know that the law requires this but in wholly owned subsidiaries conflict would be unusual.
In other companies, I have not implemented an internal conflicts register – except for very specific ones e.g. JV companies and sometimes the major trading / finance subsidiaries.
What are others experiences please?
At a past organisation we combined the conflicts registers for the various companies and headed them under the individual director. Many individuals were directors of many subsidiaries.
A bit messy but an alternative.
We still kept them for each subsidiary.
Hope this helps.
We still have work to do here but in a previous existence we implemented questionnaires on appointment and annually thereafter. Do not forget that conflicts can arise through connected persons and you may be surprised at the potential which arises there. In subsidiaries there will always be potential conflict of duty if an individual serves on more than one board and especially if any of those are joint ventures. We chose to give blanket approval to the conflicts caused by multiple group directorships via standard group articles, and also dealt with confidentiality and disclosure obligations intra-group in the same way.
Directors are asked to complete a conflicts questionnaire when they are first appointed to the Board of a UK subsidiary and on an annual basis thereafter. The questionnaire identifies potential and actual conflicts of interest so that appropriate authorisation can be obtained. All potential and actual conflicts are recorded in a central conflicts register that covers all UK subsidiaries together with details of the authorisation obtained.
We request and record details of all conflict in respect of UK subsidiary company directors. This information is reviewed on a six monthly basis and conflicts are considered and minuted at each subsidiary company board meeting.
When this was first introduced we used the GC100 guidance on conflicts of interest for as a framework document. All directors are asked to disclose their conflicts and these are reviewed and authorised in accordance with the articles. We do not maintain a register for each wholly owned subsidiary company (as these mainly have corporate directors), but we do for companies with natural person directors, e.g. pension trustee companies, and some trading companies. We minute conflicts in contracts/arrangements that come up due to directors being members of pension schemes, shareholders, option holders, having interests in contracts of arrangements, conflicts with outside directorships, cross directorships. We review annually, but also ask for conflicts to be disclosed at the start of each meeting.
When this was first introduced we used the GC100 guidance on conficts of interest and used this as a framework document for natural person directors of the UK companies. We do not maintain a register for all UK companies as many have corporate directors/wholy owned. However we do for the pension trustee companies and UK trading companies. We check the register at least annually to check it is still working appropriately, but also ask for conflicts to be disclosed at the start of each meeting, so it is ongoing. We find most conflicts are in arrangements (pensions, shares, options), cross directorships and third party roles.
We have conflicts registers for all UK group companies.