Conflict of Interest Exceptions Regulations

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 regulations respond to the 2013 BC Court of Appeal Schlenker vs Torgrimson decision and its impact on local government decision making; as well as addressing UBCM’s resolution asking for a remedy to that conflict of interest situation.

The Schlenker vs Torgrimson 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 result was that local elected officials stepped back from society and corporate director roles to protect themselves from potential disqualification.

The new regulations, which are now in force, will be applicable to local government elected officials when they are appointed to any society and some types of corporate boards by their local government. Appointments to society and corporate boards must be done by the governing body (i.e. a municipal council, a regional district board, or the Islands Trust council). This helps to ensure accountability and reinforces that the appointed elected official is serving a public interest as their local government’s representative (rather than a personal interest).

Under the new regulations, when those representatives are officially appointed by their respective local governments, they will not be in a pecuniary conflict simply by virtue of their appointment when discussing and voting on matters concerning the society or corporation at their respective meetings (and thus no risk of disqualification if challenged on the basis of that appointment).

UBCM, LGMA and local government legal community representatives provided advice in a review group during the development of the regulations, and support the outcome.

Additional information is available through a Ministry of Community, Sport and Cultural Development backgrounder.

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