Search British Business Bank
Popular Search placeholder

Conflicts of Interest Policy

1. Purpose

1.1 Purpose

The purpose of this Conflicts of Interest Policy (the Policy) is to set out the British Business Bank Group (BBB) requirements for declaring and managing Conflicts of Interest. This applies to the Board and its members, Investment Committee and its members and BBB colleagues. The National Audit Office defines a Conflict of Interest as “a set of circumstances that creates a risk that an individual’s ability to apply judgement or act in one role is, or could be, impaired or influenced by a secondary interest. The perception of competing interests, impaired judgement or undue influence can also be a Conflict of Interest.”

The objectives of this policy are to:

  1. ensure that the BBB has a defined process to deal with any actual, potential or perceived Conflicts of Interest,
  2. ensure that the interests of counterparties and users of the BBB’s products and services are not damaged by Conflicts of Interest inherent within the BBB and/or those arising from Conflicts of Interest relating to its Colleagues;
  3. protect both the BBB and the individual(s) from suspicions of wrongdoing by providing clear guidance for the effective disclosure, reporting and record keeping of Conflicts of Interests; and
  4. ensure BBB complies with its legal and regulatory

A variety of legislation, guidance and regulation addresses the issue of Conflicts of Interest. Principles arise from a number of different sources, for example: legislation such as the Companies Act 2006 (which includes provisions applicable to company directors); and the Bribery Act 2010 and the Fraud Act 2006 (which create criminal offences for certain acts); Individual colleagues may also be bound by the rules of the professional organisations or associations to which they belong. Additionally, there are high-level central government directions on how to manage Conflicts of Interest with guidance and codes of conduct to outline principles and expected behaviour for board members and accounting officers, for example:

Appendix B provides further details on the legislation, constitutional requirements, regulation and governance guidance relevant to this policy.

1.3 Alignment to Risk Appetite

Risk appetite is the type and level of risk the Board of BBB is willing to take in order to deliver its strategy and public policy objectives.

This policy sits under the Level One Risk category, People Risk. It aligns to the Level Two Risk Category, Culture and Behaviours, which is defined as ‘The risk that our culture does not support and drive the appropriate colleague behaviours and decision making, negatively impacting our ability to deliver our objectives.’

BBB’s risk appetite in relation to Culture and Behaviours is set at Low.

2. Scope

This policy applies to all BBB entities, operations, subsidiaries and Colleagues.

3. Key Requirements

The BBB will:

  • identify and manage Conflicts of Interest appropriately, especially where there is a material risk of damage to its own reputation or that of its counterparties.
  • resolve Conflicts of Interest in a manner that is in, or not opposed to, the best interests of
  • manage Conflicts of Interest whilst recognising that BBB colleagues may have interests and affiliations beyond their work for BBB.
  • provide Colleagues with training to identify Conflicts of
  • enable Colleagues to report concerns regarding perceived, actual or potential Conflicts of Interest (please refer to the BBB’s Speak Up Policy for further information).

3.1 Declarations of Interests

All Colleagues are required to declare all material and relevant Personal or Outside Interests upon commencement of employment and when they arise during the course of their employment. Colleagues are also required to complete an annual Declaration of Interests Form. The Risk & Compliance team maintains a Declaration of Interests Register which records all colleagues declared Personal and Outside Interests. The purpose of the Declaration of Interests Register is to act as a record of all declared Personal or Outside Interests that could give rise to an actual, potential or perceived Conflict of Interest in accordance with this Policy.

3.2 Conflicts of Interest

Colleagues must avoid situations giving rise to Conflicts of Interest or the perception of a Conflict of Interest wherever possible and not allow a Conflict of Interest to:

  • compromise or otherwise call into question their judgement, ability to act objectively or properly discharge their duties and responsibilities owed to the BBB and/or Delivery Partners
  • give rise to the risk of reputational damage to the BBB Group including the risk of the appearance of impropriety around the manner in which business is awarded to or by the BBB Group or of the BBB Group having obtained an improper advantage or treatment.

It is important that colleagues identify and disclose all Conflicts of Interest where there is an actual Conflict of Interest or there is a likelihood that others may perceive there to be a Conflict of Interest, even if upon review, there is no actual Conflict of Interest. All Conflicts of Interest identified, regardless of the value of any monetary loss or gain, should be declared to the Risk and Compliance Team - [email protected]

This includes conflicts arising as a result of external party interactions. The conflict should also be declared together with mitigating action to the R&C team for inclusion on the Declaration of Interest Register.

Colleagues need to be aware of the potential conflicts that can arise across BBB during the course of our activities. Conflict types include:

  • BBB Counterparty conflict - where BBB’s interests may be opposed to one or more Counter Party interests.
  • Colleague Counterparty conflict - where a BBB colleagues interests may be opposed to one or more Counter Parties interests.
  • Counterparty Counterparty - where a Counter Party interests may be opposed to the interests of one or more other Counter Parties.
  • Colleague BBB conflict - where a BBB Colleagues interests may be opposed to BBB’s interests.

There are many scenarios whereby a conflict of interest could arise. Appendix A provides a non- exhaustive list of potential scenarios.

3.3 Mitigating Conflicts of Interest

Where an actual or perceived Conflict of Interest is identified it will be necessary to mitigate the Conflict of Interest. BBB has in place a number of policies (inclusive of this Policy), procedures and controls in place to mitigate Conflicts of Interest. Please see Section 6 for ‘Aligned Policies and Standards’.

Failure to declare or mitigate Conflicts of Interest: if an actual, potential or perceived Conflict of Interest is not declared and/or mitigated, this may result in:

  • decisions or actions being taken that are not in the best interests of the BBB;
  • penalties and/or fines for statutory non-compliance;
  • the impression that BBB has acted improperly or non-impartially, which could result in an adverse reputational impact; or
  • a breach of the BBB’s Standards of Conduct and the values it stands

3.4 Conflicts of Interest at Governance meetings including Board and Board Committee meetings

A Conflict of Interest under the Companies Act 2006 arises when there is a conflict between the duties a director owes to the company and his/her own personal interests. The duty to avoid Conflicts of Interest,

the duty to declare any interest in a proposed transaction or arrangement with the company and the duty not to accept benefits from third parties are embodied in the Companies Act.

Failure by a director to declare an interest is a criminal offence. There is an opportunity at all governance meetings including the BBB and BPI/BPC Board or Board Committee meetings for Board members (or other attendees) to declare any Conflicts of Interest which may arise during the meeting.

These principles also apply to any internal meetings such as the requirement for colleagues to make appropriate declarations at an Investment Committee.

Where an Investment Committee utilises the use of independent committee members for the purposes of leveraging independent expertise, such as BPC, consideration should be given as to whether the individual has any personal conflicts with respect to a particular deal, when selecting members each time.

The Company Secretary or their nominee will record details of any Conflicts of Interest and any mitigating actions taken to resolve the Conflict of Interest. In circumstances where an individual has declared a Conflict of Interest, the chair of the meeting may decide that the individual should abstain from involvement in the relevant matter. This may require the individual to be excluded from any relevant correspondence or communication or to recuse themselves from meetings whilst the matter is discussed. The concerned matter is recorded in the minutes of the respective meeting.

3.5 BBB Colleagues on External Boards

BBB Group or its subsidiaries may secure non-executive board member or observer positions on the boards of external companies in which BBB co-invest.

Such board director and / or observer positions will provide BBB with important opportunities to exercise good stewardship within these organisations by providing increased scope to seek to ensure that management are held to account and that any issues identified are addressed, to protect BBB’s interests and investments.

Any person employed by BBB who is selected to represent the Bank on a board of an external company in which BBB co-invests must declare:

  • the position that they hold in that investee company (whether as director or observer);
  • any other interest (whether direct or indirect) that they, or their connected persons have in that investee company; and
  • any interest that they, or their connected persons have which may reasonably conflict with the interests of that investee company,

through the Bank’s normal Declaration of Interests process, using the declarationofinterests@british- business-bank.co.uk email address, prior to taking up that position. All interests declared will be submitted to the relevant line manager for review.

For these purposes, any such person should regard the following as being connected with them:

  • members of their family, including:

    • their spouse or partner
    • their children or step-children (whatever their age)
    • their partner's minor children or step-children
    • their parents
    • their siblings, grandparents and other relatives
    • companies (or other bodies corporate, such as limited liability partnerships) with which they are connected, in particular those in which they (together with persons connected with them) hold at least 20% of the share capital or hold or control at least 20 per cent of the votes;
    • trustees of trusts (other than employee share scheme or pension scheme trusts) of which they (or persons connected with them) are a beneficiary; or
    • where they (or persons connected with them) are a partner in a partnership, the other partners in that partnership.

    All colleagues who are selected to represent BBB on external boards will be provided with appropriate training on the key responsibilities of company directors and will be supported by the Bank in these roles. No external remuneration will be received by colleagues for undertaking these roles.

    3.6 External appointments undertaken for developmental or personal reasons

    This section covers all types of appointments, including non-executive director (NED) roles and trusteeships, other than those covered in section 3.5 above. It includes specific provisions for Executive Directors, who must abide by the Cabinet Office Code of Conduct for Board Members of Public Bodies. In operating this policy, the Bank will also have regard to the Special Leave Policy, which provides for leave to be granted for specified public duties and other volunteering activity.

    British Business Bank Plc (BBB or the Bank) recognises that experiential development should form the most significant part of a colleague’s development. External appointments such as NED roles or Trusteeships can represent an important development opportunity broadening an employee’s own experience, which in turn helps them in their day-to-day role with the Bank. Colleagues taking external appointments need to declare them in line with this policy.

    The Cabinet Office Code of Conduct for Board Members of Public Bodies states that “If you wish to take up additional employment or appointments during your term of office, you must inform the relevant Chair (e.g. BBB Plc Board Member must notify BBB Plc Chair) and/or the relevant parent department in advance, and allow them the opportunity to comment. Care should be taken if you accept additional public appointments to ensure that you are not being paid twice from the public purse for the same time” (Clause 3.16).

    The UK Corporate Governance Code 2018 recognises that holding a concurrent non-executive role is acceptable for full-time executives, noting that: “Full-time executive directors should not take on more than one non-executive directorship in a FTSE 100 company or other significant appointment”. Provision 15 also states that “Additional external appointments should not be undertaken without prior approval of the board, with the reasons for permitting significant appointments explained in the annual report”.

    Remuneration for external appointments must be in accordance with the Bank’s requirements as defined in section 4.9 of this policy.

4. Responsibilities

4.1 All Colleagues

All Colleagues must:

  • Declare all material and relevant personal interests upon commencement of employment / contract
  • Declare all material and relevant personal interests as they arise during the course of their employment via [email protected]
  • Complete the Annual Declaration of Interests Form on an annual basis during the course of their
  • Inform their Line Manager if they consider there will be a potential, actual or perceived Conflict of Interest which arises during the course of their employment.
  • Ensure that Conflicts of Interest are appropriately mitigated before continuing to work on a deal/transaction with which there is a conflict.
  • Liaise with their Function Head or the content removed if they are unsure as to whether to declare an interest or whether an interest creates actual, potential or perceived Conflict of Interest.

4.2 Line Managers

Line Managers are responsible for:

  • Reviewing new starters’ Declaration of Interests forms and ensuring that any Conflicts of Interest identified are resolved prior to commencement of employment.
  • Reviewing declarations made by relevant colleagues during the annual Declaration of Interests exercise, or ad-hoc declarations made, and ensuring that any Conflicts of Interest identified are managed and mitigated.
  • Reporting potential, actual or perceived Conflicts of Interest to Risk and Compliance for inclusion on the Declaration of Interest Register.

All colleagues must obtain the Bank’s prior written agreement before taking on additional external duties or employment. However, the standard contract of employment states explicitly that secondary employment is not prohibited, and that permission will not be unreasonably withheld where the external commitment is unlikely to interfere with the performance of the employee’s role with the Bank.

In considering whether a request to take on an external appointment should be granted, the Bank will give due consideration to:

  • Conflicts of interest: whether there is the risk of a Conflict of Interest – actual or perceived – between the BBB and external roles. If a conflict exists that cannot be appropriately managed or mitigated, the employee cannot hold concurrently the relevant external role. The relevant line manager will consider whether any actual, potential or perceived Conflict of Interest can be managed, e.g. through appropriate disclosure and, potentially, by the employee recusing themselves from affected discussions/decision-making, recognising that the nature of the executive role may make this The Risk & Compliance team will review and consider the appropriateness of the mitigations once informed about the circumstances. The highest standards of propriety are expected of public servants. Where appropriate, further guidance may be sought from the Cabinet Office Propriety and Ethics team. If a conflict exists that, in the Bank’s sole discretion, cannot be appropriately managed or mitigated, the employee cannot hold concurrently the relevant external role.
  • Number of external appointments: whether the employee holds more than one external role, non-executive role or trusteeship. Understanding the nature of any proposed or existing external role is important, as well as the realistic time commitment it requires (see below). Full-time executive directors should not take on more than one non-executive directorship in a FTSE 100 company or other significant appointment.
  • Time commitment: the time commitment required of the external appointment(s) and whether the employee can prioritise and devote the necessary time to their role at the Bank alongside their external commitment. For example, the time commitment required of NEDs can increase unexpectedly in certain circumstances, e.g. should their organisation get into financial difficulty or become the subject of a takeover. NED roles for large and/or complex organisations and regulated financial institutions can require material time commitments.

4.3 Senior Leaders and Managing Directors

Members of the SLT are responsible for the management of any Conflicts of Interest relevant to their areas of accountability and ensuring they are managed in accordance with the principles set out in this Policy.

Under existing service agreements, BBB Executive Directors must seek formal approval from the Board before accepting any external appointment or additional employment which has an impact on the time the employee is able to devote to their role with the Bank. The employee requesting approval may not participate in the decision-making process, and all such appointments are subject to annual review by the Board.

In relation to appointment of an Executive Director, part of the approval will include due diligence to approve any Conflict of Interest and to satisfy the Bank that the time commitment is manageable in terms of the employee’s requirement to do their job at the Bank.

The CEO approves the treatment of any remuneration for all employees below Board level, and informs the Remuneration Committee of all such decisions taken in respect of Executive Committee members. The CEO may delegate the approval of external appointments for employees who are not Executive Committee members to the CPO.

  • Executive Directors

    • The Board approves all external appointments for Executive
    • The treatment of any remuneration offered by the external entity to an Executive Director for the role is reviewed and approved by the Remuneration Committee before the employee formally takes on the role. The Remuneration Committee can escalate to the Board if there are specific concerns. The Remuneration Committee Chair may request due diligence be carried out by the Risk and Compliance team to support this decision.

    4.4 Risk and Compliance Team

    The Risk and Compliance Team is responsible for:

    • Establishing and maintaining appropriate policies, procedures, systems and controls to manage Conflicts of Interest adequately.
    • Maintaining the Declaration of Interests Register for the
    • Providing advice and guidance to Line Managers (in the first instance) on the effective mitigation of Conflicts of Interest.
    • Updating the Declaration of Interests register and recording how Conflicts of Interest have been mitigated/resolved.
    • Reporting on Conflicts of Interest to the Board/Board sub committees on an annual basis and by exception when required.
    • Assisting senior management in dealing with Conflict of Interest situations as they arise
    • Provide the respective CEO/Chair with an opinion as to whether declared interests by Board Members present an actual, perceived or potential conflict to inform their Including recommendations for any mitigating actions where applicable.
    • Facilitating adequate training for colleagues in relation to Conflicts of

    4.5 HR Team

    The HR Team is responsible for:

    • Issuing and storing copies of new starter Declarations of
    • Providing a copy of each new starter declaration to the relevant Line Manager, to facilitate a review, prior to commencement of employment.
    • When applicable, and jointly with Risk and Compliance, provide advice on Conflicts of Interest which may arise during the course of employment and/or during a breach of this policy.

    The Legal and Governance Team is responsible for providing or obtaining legal advice when required in relation to Conflicts of Interest.

    The Company Secretary or their nominee is responsible for:

    • Recording (in the minutes) Conflicts of Interest declared at Board and Board Committee meetings and other internal decision-making committees and meetings such as Investment Committee, and where required, the mitigating action taken and escalating to the Risk and Compliance team, for inclusion on the Declaration of Interest Register.

    4.7 Non-Executive Directors

    Non-executive Directors (Board and Board Sub-committee members) are responsible for:

    • Declaring their interests on appointment and as they arise during their
    • Declaring potential or actual Conflicts of Interest which arise during Board/sub-committee
    • Ensuring that Conflicts of Interest are appropriately mitigated before continuing in a role within which there is a Conflict of Interest.
    • When existing Board members are considering a new board appointment outside of BBB, they should firstly discuss it with the Board Chair of BBI, BPC or BBB to identify any obvious The Board Chair may request that appropriate due diligence is completed by the Risk & Compliance team to support an informed decision.

    4.8 Recruiting executives and other employees with existing external appointments

    When recruiting, including for executive positions in BBB, the panel/committee or individual responsible for managing the recruitment process should establish at an early stage:

    • whether an applicant holds an existing appointment such as a NED role or Trusteeship;
    • the nature of the role and the organisation for which it is undertaken;
    • the required time commitment;
    • whether the role is paid; and
    • whether the candidate wishes to continue in the role should they be successful in securing the prospective executive appointment at the Bank.

    This information should be provided to the interview panel as part of the longlist and shortlist candidate information packs. If the executive appointment requires ministerial approval, the information should be provided to ministers together with the Nomination Committee’s view on the continuation of the external appointment.

    4.9 Remuneration for external roles

    Care must be taken to ensure that BBB directors and employees do not receive public money (i.e. their executive salary and associated benefits) for time spent earning external fees for their own account. BBB Executive Directors and other employees will not normally be entitled to accept any material remuneration (i.e. more than the reimbursement of strictly reasonable expenses) offered by the external entity in relation to their duties.

    However, where such external appointments can be performed, to the Bank’s satisfaction, with no Conflict of Interest and with no or minimal impact on the employee’s capacity to perform their role at the Bank, or the Bank is nevertheless supportive of the employee taking on the external role, it may, in its absolute discretion, agree that the employee may retain some or all of any remuneration resulting from the appointment.

    To ensure the employee is not receiving public money (i.e. their executive salary and associated benefits) for time spent earning non-executive fees for their own account, the Bank’s agreement will be conditional on one or more of the following:

    • A reduction in the employee’s salary to take account of the time expected to be spent undertaking the external role. For instance, to take account of a 10-day NED commitment, the employee’s BBB salary will be reduced to 250/260ths of their normal full-time equivalent salary;
    • A reduction in the employee’s total gross remuneration equivalent to the amount of any gross fees to be received from the external entity;
    • The employee’s agreement for any fees in respect of their external appointment to be donated to a charity of their choice; or
    • The waiving of any fees offered to the employee in respect of the external

    In exceptional circumstances, the Bank may choose to apply the conditions proposed above to only a portion of the fees to be received from the external entity, or to waive them altogether. However, this is only likely to be the case where an employee is employed on a part-time basis and can accommodate the requirements of the external appointment entirely within the time for which they are not contracted to work for the Bank.

5. Non-Compliance

All identified breaches of this policy must be reported via the Risk Incident Portal on the BBB Intranet. Breaches will be assessed by the Policy Owner to determine the further action required and may include disciplinary action in accordance with the Bank’s Disciplinary Policy.

6. Aligned Policies and Standards

Our aligned policies and standards support the broader and holistic control environment pertaining the management of conflicts of interest, such as:

  • Standards of Conduct - outlines the expected behaviour and ethical standards for employees within BBB. It explicitly addresses conflicts of interest and emphasises the obligation of employees to disclose conflicts, maintain impartiality, and act in the best interest of the
  • Recruitment Policy - outlines the guidelines and procedures for hiring new It includes guidelines on conducting background checks, that may involve verifying financial interests, relationships or other relevant information that could potentially create conflicts.
  • Speak Up Policy - encourages employees to report suspected conflicts of interest and protects them from retaliation. It should provide clear procedures for reporting and assure employees that their concerns will be thoroughly investigated.
  • Anti-Bribery & Corruption Policy – outlines colleague obligations relating to the acceptance of gifts and/or hospitality through the Gifts and Hospitality Standards
  • Supplier Management Policy – outlines all potential or apparent conflicts of interest related to procurements must be declared to Commercial Operations and managed accordingly with the presumption that any conflicted Employee will not take direct part in any Procurement

Further aligned policies

  • Delegated Financial Authorities
  • Market Abuse & Insider Dealing Policy and Standards
  • Fraud Policy and Standards
  • Financial Risk Policy

In addition to these it should be noted that staff contracts include a requirement to declare all Conflicts of Interest.

7. Policy Controls

The Conflict of Interest controls are visible here: Conflict of Interest Policy - Power BI

8. Definition of Terms

Personal or Outside Interest - any external employment (whether paid or voluntary), business activity or significant investment outside of your normal employment duties and responsibilities with BBB or its subsidiaries. This is not limited to but can include directorships, trusteeships, partnerships, external employment or financial investments.

Connected Persons - include the spouse, civil partner, children, parents or any other person you have a close personal relationship with.

Conflict of Interest - a situation where a BBB employee’s professional judgement may be, or could be perceived to be impaired by a competing Personal or Outside Interest or previous employment e.g. a BBB employee or their Connected Persons may make a personal financial gain or avoid a loss, as a result of a BBB decision. Conflicts of Interest can be actual or perceived and could arise between (this list is not exhaustive):

  • BBB Group and its counterparties (this can include delivery partners, third party loan or investment beneficiaries and suppliers); or
  • Your personal or business interest and those of BBB Group or its counterparties; or
  • BBB Group counterparties in the context of their interaction with BBB Group or BBB Group colleagues;
  • BBB Group and its colleagues and/or;
  • BBB group entities (e.g. BBI and BBB).

Counterparty - BBB’s past, existing and potential counterparties including BBB’s delivery partners, direct customers or customers of BBB programmes, service providers and suppliers.

Appendix A - Conflict scenario examples

Scenario Example
Potential for Biased Decision-Making by colleagues. Colleagues may not always make an objective decision because of information they process which may drive inappropriate decision through facts and analysis undertaken.
Conflict of interest arising from interim roles, secondments and internal moves. Interim arrangement allows access to sensitive HR information which could influence decisions due to CoI.
Lobbying Influence for external third parties (i.e. government ministers). Lobbying by interested parties to BBB could lead to bias in investment decision making.
Diverging objectives with DP's. Relationships with DPs can be affected by diverging objectives within BBB e.g. oversight of application of the terms of the covid scheme loans vs wholesale relationship.
Relationship manager bias in supporting poor decisions. Relationship manager may have a close relationship with a counterparty and have a bias towards supporting a poor decision to continue to support an investment or a customer.
Continued access for colleagues to sensitive information whilst working notice period. Colleague resigns and remains at BBB for the notice period where they potentially continue to access sensitive data and knowledge about BBB deals which could be useful outside of the organisation after they leave.
Information shared with the shareholder / government. Information shared with the shareholder / government departments can be sensitive e.g., that used as part of the Limited Partnership Advisory Committee (LPAC).
Inappropriate Sharing of Information by Board Members Holding Positions in Similar Institutions. Board members may hold positions in other institutions with similar objectives and information may shared inappropriately or inadvertently.

This is not an exhaustive list of the potential conflict scenarios that could exist across BBB and its operations. Conflicts can also occur in areas such as Procurement and the handling of market sensitive information. Please see aligned policies and standards for further details.

Appendix B – Relevant external obligations