In April 2026, the Charity Commission for England and Wales updated its core guidance on conflicts of interest (CC29). The revised guidance does not change the underlying legal duties of trustees, but does sharpen the focus on a persistent problem across the sector: the failure of trustees to recognise and properly manage conflicts of interest.
Why an update was needed
The Commission’s decision to update CC29 was driven by a rise in compliance cases linked to unmanaged conflicts of interest. According to the Commission’s Charity Sector Risk Assessment 2025 “Compliance cases opened by the Commission based on alleged abuse of charities for private benefit have risen 23% over the last financial year, though they still represent a very small percentage of charities.”
Conflicts of interest were found to be a recurring factor in many of the most serious investigations. These ranged from inappropriate financial arrangements involving trustees’ connections to failures in governance where decision-making was compromised.
“Trustees, most of whom are volunteers, are often unable to identify a conflict when it arises and therefore fail to take steps to protect their charity’s assets or reputation,” the Commission said.
It is important to recognise that the Commission says most of these issues arise from a lack of awareness rather than deliberate wrongdoing. Because many trustees fail to identify when a conflict exists, they never take the steps required to manage it effectively.
Taking this into account, the regulator has reframed its guidance to be shorter, clearer and more practical, with a particular emphasis on recognition and early action.
What is a conflict of interest?
The Commission defines a conflict as any situation where a trustee’s personal interests, or those of a connected person or organisation, conflict (or could conflict) with the charity’s best interests.
Key characteristics
Conflicts of interest can be:
- actual – where a real clash exists
- potential – where a clash could arise
- perceived – where it appears to others that a trustee may not be impartial
This latter category is important because it can undermine confidence in the charity’s decision-making.
Types of conflict
The updated guidance still distinguishes between two main categories:
1. Financial conflicts
Where a trustee, or someone connected to them, could gain financially (or receive something of monetary value) from a decision. For example, a trustee’s relative being paid to provide services to the charity.
2. Conflicts of loyalty
Where a trustee’s obligations to another organisation or individual could influence their decision-making, this may mean they are unable to act in the best interests of the charity – for example, a trustee who also sits on the board of another organisation entering into a partnership with the charity. Where charities merge or change structure and share some or all of the same trustees, conflicts of loyalty may arise if there are insufficient independent trustees available to consider a matter objectively.
Who can be affected?
The updated guidance also makes clear that conflicts can extend beyond formal roles to other relationships, which are known as ‘connected persons’.
This is defined as a person or organisation that is connected to a trustee, and can include:
- a trustee’s spouse or civil partner
- a trustee’s immediate family
- a trustee’s business partner
- businesses where a trustee has an interest through ownership or influence
For conflicts of loyalty, this may also include:
- a trustee’s employer
- another charity for which they are a trustee (even if the other charity has the same or similar purpose)
- the organisation that appointed them as a trustee
- a trustee’s wider relatives
- a trustee’s friends
In some circumstances, there is a legal definition of “connected person”. Those circumstances will include:
- selling or leasing charity land
- providing goods or services to a charity where trustees are using the statutory power
- a charitable company that is transferring or receiving a substantial non-cash asset
The charity’s governing document may also state who is a connected person.
The legal situation can get quite complex here, so it is better to get expert advice from charity sector legal specialists.
Trustees who do not manage conflicts of interest
All trustees must ensure they manage conflicts of interest. This responsibility rests with the entire trustee body and not just the chair or the conflicted trustee.
If trustees do not manage conflicts of interest, this could have serious consequences for both them and their charity. For example:
- A decision could be challenged and may turn out not to be legally valid. The charity may lose money as a result and the trustees may be jointly liable to cover the loss from their personal funds.
- The charity’s reputation could be damaged, making it more difficult to get funding.
- It may be evidence of misconduct and/or mismanagement and the Commission may need to take action.
What has changed in the April 2026 guidance?
Although the legal framework remains the same, the revised CC29 guidance introduces several important practical changes:
1. Stronger focus on identification
The Commission identified that trustees often fail to recognise conflicts in the first place. The new guidance places much greater emphasis on spotting conflicts early.
2. A clear five-step process
The guidance sets out a simplified process for managing conflicts:
Step 1 – Identify the conflict
Step 2 – Declare conflicts of interest
Step 3 – Consider removing the conflict of interest
Step 4 – Manage conflicts of interest
Step 5 – Record conflicts of interest
This replaces a less detailed previous approach, making much clearer what is expected of trustees.
3. Greater clarity on participation
There are tighter expectations in the guidance about trustee involvement. A conflicted trustee may sometimes remain in discussions, but they should not take part in any decision-making. This may include abstaining from voting and, where required by the charity’s governing document, not being counted towards the quorum. Trustees should also consider the charity’s governing document and the nature of the conflict, as these may require different procedures to be followed.
4. Simpler, more practical format
Prompted by the realisation that many trustees are not familiar with conflicts of interest, the Commission has reworked the guidance to include more examples and clearer language, reflecting real-life situations that trustees might encounter.
Practical action points
In light of the updated guidance, there are proactive steps that can be taken in order to strengthen governance around conflicts of interest.
Governance and policies
- Review and update your conflicts of interest policy to ensure it aligns with CC29 expectations.
- Check your governing document for provisions on conflicts and make amendments if it is found that they are needed
- Ensure conflicts of interest are a standing agenda item at trustee meetings.
Identification and awareness
- Train trustees regularly on recognising conflicts (including those which are more subtle and less easily spotted, such as “loyalty” conflicts).
- Encourage a culture of openness, where declaring interests needs to be seen as routine, not problematic.
- Bear in mind what we have already said about perceived conflicts and their potential to cause problems. Treat them seriously, even if there is no actual conflict.
Registers and declarations
- Ensure you have a comprehensive register of interests, maintained and updated regularly.
- Make it a requirement to declare interests at the start of meetings, especially if decision-making is involved.
Managing conflicts in practice
- Refer back to the five-step process (see above) consistently and follow it.
- Even if a conflicted trustee’s presence is allowed for discussion, exclude them from decision making.
- It may be that some conflicts are too serious to be managed; in some cases, resignation may be the only appropriate step.
Decision-making and record-keeping
- Keep a comprehensive and detailed record of all conflicts and include the way they were handled in the minutes of the meeting where that happened.
- When decisions are made, they should be made in the best interests of the charity, independent of any private benefit. Make sure that you can evidence this in case you are asked to show it. This is particularly important when those decisions can be classed as high-risk.
Risk and reputation management
- Rather than just governance formalities, conflicts should be assessed as part of the risk management process.
- As we mentioned above, concerning perceived conflicts of interest, public perception can be as damaging as actual misconduct, and this can put the charity’s reputation at risk.
