A BC Appeal Court ruling that clarifies conflict of interest rules impacts many local government elected officials throughout the province as well as numerous non-profit societies.
The unanimous decision, written by Justice Ian Donald, found that politicians who also serve as directors of non-profit societies have a conflict-of-interest if matters pertaining to the society come before their elected bodies.
The issue arose after two elected trustees of the Salt Spring Island Local Trust Committee approved funds for societies of which they were also directors. A group of island residents took the issue to court, arguing the trustees had contravened conflict-of-interest provisions in the Community Charter. A BC Supreme Court judge disagreed with them and ruled that the pair didn’t have a conflict of interest because they hadn’t gained any personal financial benefit from the funds given to the societies.
That ruling was appealed, which led to the decision released in January. The appeal court found that the supreme court judge interpreted the provisions in the Community Charter too narrowly. The legislation states that elected officials who have “a direct or indirect pecuniary interest in the matter, or another interest in the matter that constitutes a conflict of interest,” must declare it and leave the room while the matter is being discussed and voted on. If undisclosed, a pecuniary conflict of interest may result in disqualification from office.
The appeal court decision found that directors of societies have an indirect interest in any contract a society is awarded. When elected officials vote on matters involving the societies they serve, “the public is disadvantaged by the conflict, whether the respondents derived any personal gain or not, because the public did not have the undivided loyalty of their elected officials.”
The decision has already affected two City of Powell River councillors, who have decided to resign their positions on the boards of non-profit societies. Others are reviewing their options, but if they decide to stay on the boards of non-profit societies, they will have to be careful to stay away from discussing or voting on matters involving those societies.
Many elected officials begin their careers by volunteering for non-profit societies and end up serving on the boards of those societies. To lose these dedicated volunteers leaves a gap for the non-profits, as it becomes more and more difficult to attract other volunteers.
Most societies need new members to continue the good work they do. It is time for new people to offer their services to organizations that serve our community in so many ways and fill the gap created by the appeal court ruling.
