What is a Business or Pecuniary Interest?

Governance Regulations require all schools/academies/Academy Trusts to hold and publish a register of business and pecuniary interests.  As such, all members, directors/trustees, governors and employees are asked to record any interests held either personally or through a company or relative partner.

An ‘interest’ is a situation where a member, director/trustee, governor or employee of a school or academy trust may be affected personally or financially, directly or indirectly where a decision made at a meeting where they are present.

The School Governance Procedures state that members of the Governing Body with any such interest must declare it as soon as possible at any meeting of the full Governing Body or committee, must not take part in the discussion, must note vote and should withdraw from the meeting during such proceedings.  Their withdrawal and return to the meeting should be recorded in the meeting minutes.

There is not a comprehensive definition of what constitutes a pecuniary interest. In all cases, the natural meaning of the word has to be put in the particular context of the matter being discussed.

The Seven Principles of Public Life

The principles of being a Governor and working as part of a Governing Body are described in the Seven Principles of Public Life (The Nolan Committee May 1996), which states that: -

Selflessness: 

Holders of public office should act solely in terms of the public interest. They should not do so in order to gain financial or other benefits for themselves, their family or their friends.

Integrity: 

Holders of public office should not place themselves under any financial or other obligation to outside individuals or organisations that might seek to influence them in the performance of their official duties.

Objectivity: 

In carrying out public business, including making public appointments, awarding contracts, or recommending individuals for rewards and benefits, holders of public office should make choices on merit.

Accountability:

Holders of public office are accountable for their decisions and actions to the public and must submit themselves to whatever scrutiny is appropriate to their office.

Openness:

Holders of public office should be as open as possible about all the decisions and actions that they take. They should give reasons for their decisions and restrict information only when the wider public interest clearly demands it.

Honesty:

Holders of public office have a duty to declare any private interests relating to their public duties and to take steps to resolve any conflicts arising in a way that protects the public interest.

Leadership:

Holders of public office should promote and support these principles by leadership and example. In taking on your role as a governor, you agree to follow and uphold the Seven Principles.

Direct Pecuniary Interests

The following are examples of a direct pecuniary interest:

• Any payment of salary, allowances or other expenses to a member of staff from the school/academy/academy trust budget.

• Any appointment where a member/director/trustee, governor or employee is a candidate.

• A member/director/trustee, governor or member of staff runs their own business and has been or could be paid for work or services received from the school/academy/academy trust budget or any other connected/associated school/academy/academy trust funds.

• Land owned by a member, director/trustee, governor or member of staff where its value might be affected by proposals about the school’s land or buildings.

Indirect Pecuniary Interests

A number of matters can be treated as an indirect pecuniary interest. Some examples are as follows:

• A member, director/trustee, governor or member of staff own shares in or is a member of a company or another body which has a direct pecuniary interest;

• A member, director/trustee, governor or member of staff is a business partner of a person or company who has a direct pecuniary interest;

• A member, director/trustee, governor or member of staff is employed by a person or company which has a direct pecuniary interest;

• A member, director/trustee, governor or member of staff has a spouse or is living with another person who has an interest in the contract or matter being discussed, including an appointment to the staff of the school/academy/academy trust

• The contract or matter relates to an appointment at the school/academy/academy trust which could result in another vacancy for which the governor or member of staff could be a candidate.

Interests that are not Pecuniary

Some matters are not considered as creating a pecuniary interest. Some examples are as follows:

• Being a Councillor on a local authority.

• Being a rate payer or Council Tax payer in the area of the school/academy/academy trust.

• Or members of school/academy/academy trust staff, having an interest that is no greater than the interest of the generality of staff in a matter.

• Having an interest that is so remote or insignificant that it cannot reasonably be regarded as likely to influence a governor or member of staff.

Governance Roles in other Educational institutions

Within their register of business and pecuniary interests, schools and academies are required to publish any governance roles currently held by members, directors/trustees and governors in other educational institutions.  

This also includes those positions held within the last 12-months, where a member, director/trustee or governor has subsequently come to the natural end of or terminated their term of office.  

It is essential that where a person has held such a role that this is included on their declaration form.