The Province has approved regulations that will allow elected local government officials to be appointed by their local government to serve on certain society or corporate boards, without risk of disqualification based on financial conflict of interest.
The new regulations are carefully targeted; they do not diminish existing accountability rules for conflict of interest based on personal gain or interest. They will apply when local elected officials fulfil their role as duly appointed representatives of their local governments on certain society and corporate boards.
Local governments frequently appoint elected officials as directors to corporate bodies or societies that provide local government services or represent local government interests.
In 2013, a BC Court of Appeal (BCCA) decision determined that “divided loyalty” was inherent when a local elected official served simultaneously as a director on a society/corporate board that may receive financial benefit from the local government.
The BCCA ruling had a significant impact on local government decision making, causing municipal council members and regional district board members to withdraw from discussions and voting related to societies and corporations, even when they had been appointed to those bodies by their local government.
The new regulations will ensure that local governments can again make choices on how best to deliver services based on what is most efficient for their communities.
- A Union of British Columbia Municipalities resolution requested that the Province address this conflict of interest situation and how it impacted local government decision making.
- Appointment of a particular representative to sit on a society or corporate board remains at the discretion of municipal councils or regional districts.
- Financial conflicts, such as a local elected official receiving a gift or personal financial benefit when sitting on any society or corporate board, still remain as potential conflicts under these regulations; such issues should be managed carefully with the assistance of legal advice, as they can still be challenged in court.
- Perceived conflicts of “divided loyalty” between a local elected official’s personal interest in a society or corporation and their role on a local government also still remain potential conflicts under these regulations; such issues should be managed carefully with the assistance of legal advice as they can still be subject to challenge.
For further background information, go to: http://ow.ly/4naqGK