New Charity Commission Guidance Following Rise in Unmanaged Conflicts of Interest

The Charity Commission has published updated guidance (CC29) on conflicts of interest, following a significant increase in cases involving the alleged abuse of charitable status for private benefit.

In its first-ever Charity Sector Risk Assessment, published in late 2025, the Commission found that such compliance cases had risen by 23 per cent in a single year. The Commission has indicated that the upward trend may be continuing.

The revised CC29 guidance has been shortened and simplified, with clearer examples of common conflict situations, and is designed to be accessible on mobile devices.

The Commission says it wants to help trustees identify and manage conflicts of interest, rather than simply penalise those who fail to do so.

What the CC29 guidance covers

The updated CC29 guidance distinguishes between two categories of conflict:

Financial conflicts – Where a trustee or someone connected to them stands to gain money or other value from a decision made by the charity's board.
Conflicts of loyalty – Where a trustee's obligations to another organisation, or personal relationships, could influence their judgement on a matter before the board.

The Commission's analysis of its casework found that the majority of unmanaged conflicts arise from a lack of awareness rather than deliberate wrongdoing.

Many trustees, most of whom are volunteers, are simply unsure how to recognise a conflict of interest and therefore fail to take the steps necessary to protect the charity.

Why this matters: the legal and financial consequences

The Commission is unambiguous on the consequences of failing to manage conflicts properly. Decisions made without properly addressing a conflict of interest may be legally invalid.

This can result in the charity losing money and the trustees involved being deemed jointly and personally liable to reimburse the charity for any loss.

The Commission may also treat an unmanaged conflict as evidence of misconduct or mismanagement.

Recent enforcement action underlines that these are not theoretical risks. The Commission has recently disqualified a married couple following an inquiry into failings at two charities and has opened a statutory inquiry into a Surrey charity in which a trustee's son was loaned £900,000 of charitable funds.

Practical steps for trustees

Here are a few straightforward, but essential, steps that trustees can take to reduce potential conflicts of interest:

Review and update your governing document – Ensure it contains clear, workable provisions for conflicts of interest. If the current provisions are inadequate, the CC29 guidance recommends acting before, rather than after, a trustee faces a conflict of interest.
Maintain a register of interests – Every trustee should declare relevant interests and the register should be kept up to date.
Adopt a conflicts policy – The policy should set out how conflicts are identified, declared and managed.
Follow the procedure when a conflict arises – Typically this means the conflicted trustee withdrawing from the relevant discussion and decision. Where a financial conflict exists, the updated guidance states the conflicted trustee should leave the meeting entirely for that agenda item.

How can we help

Effective conflict management remains one of the most important aspects of good charity governance, and even well-meaning trustees can inadvertently create serious problems by failing to recognise and properly manage a conflict.

Our Charity and Not-for-Profit specialists support trustees in reviewing governing documents, establishing or updating registers of interest, and putting a clear conflicts of interest policy in place that is properly understood and followed at board level.

If you have any concerns about whether your current governance arrangements are adequate, our team would be happy to help.

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FAQs

CC29 is the Charity Commission's guidance on conflicts of interest. It was updated and simplified to help trustees identify, declare and manage conflicts, following a 23 per cent rise in related compliance cases identified in the Commission's first Charity Sector Risk Assessment.

The CC29 guidance distinguishes between financial conflicts, where a trustee or someone connected to them could gain money or value from a board decision, and conflicts of loyalty, where a trustee's obligations to another organisation or personal relationships could influence their judgement.

Decisions made without properly addressing a conflict of interest may be legally invalid. The charity could lose money, the trustees involved may be held jointly and personally liable to reimburse the charity, and the Commission may treat the unmanaged conflict as evidence of misconduct or mismanagement.

The conflicted trustee should typically withdraw from the relevant discussion and decision. Where the conflict is financial, the updated CC29 guidance states the trustee should leave the meeting entirely for that agenda item.

Charities should review and update their governing document, maintain an up-to-date register of interests, adopt a clear conflicts of interest policy, and ensure the correct procedure is followed whenever a conflict arises.