In the strata industry, managing conflicts of interest is not just a regulatory requirement but an important part of ethical conduct. SCA NSW understands this well, urging the need for effective conflict of interest management strategies to ensure transparency and uphold professional standards. Here’s why managing conflicts of interest matters and how SCA NSW is leading the way in best practices through our recent Conflicts of Interest Webinar and the release of our Best Practice Guide.
Defining Conflicts of Interest
A conflict of interest arises when personal interests interfere with the professional responsibilities and performance of strata managers. This could include financial relationships with service providers, ownership interests in managed properties or accepting gifts that may compromise impartiality.
Why Manage Conflicts of Interest?
The question of why we manage conflicts of interest is fundamental. It boils down to maintaining integrity in decision-making processes and effective strata management. When personal, financial or other interests conflict with the objective performance of duties, it can undermine trust and lead to legal consequences.
SCA NSW Best Practice Guide
SCA NSW is committed to continuous improvement, aligning with the PSS requirements and engaging with the Professional Standards Authority. Recent audits have highlighted areas where improvements in conflict of interest management can make a significant impact. This will also mean better compliance with existing legislation, including the Property and Stock Agents Act 2022, Strata Schemes Management Act 2015 and other fiduciary obligations at general law.
The SCA NSW Best Practice Guide on Managing Conflicts of Interest serves as a comprehensive resource for strata managers. Key elements include:
- Disclosure and Assessment
- Upon disclosure, higher management evaluates the conflict’s implications and takes measures to mitigate its influence on decision-making.
- Record Keeping
- All disclosed conflicts are documented in a Conflict of Interest Register, ensuring transparency and accountability.
- Education and Training
- Training sessions to be conducted to educate staff on identifying, disclosing and managing conflicts of interest.
- Monitoring and Enforcement
- To enforce compliance, regular audits are conducted, and violations of conflict of interest policies are met with fair disciplinary actions.
To download the Best Practice Guide & Templates – head to the ‘Best Practice Guide’ section under ‘NSW Resources’ in your Membership portal to download the guide – ‘Conflicts of Interest’.
Managing conflicts of interest isn’t merely a box to check—it’s a fundamental practice that protects strata communities from unethical practices.
SCA NSW reinforces its commitment to transparency and continues to uphold the highest standards of professionalism and integrity in the strata industry.