A New High Water Mark For Managing Conflicts Of Interest – For Better Or Worse

Trumpets sound! There’s a new statutory standard for disclosing strata conflicts of interest from this week in NSW. Those responsible would argue this is now ‘best practice’ for other states and territories. 

On this, we’ve done some deep work, and you should be concerned. 

There are no fewer than 15 template documents an agency now needs, to comply with the laws for conflict-of-interest disclosure in NSW. This includes the Supervision Guidelines issued with force of law in 2024.

1. Operating Procedure - disclosing conflicts of interest
2. Staff training and induction module about managing conflicts of interest
3. Employment agreement insert about managing and reporting conflicts of interest
4. Conflicts of interest policy
5. Director, officer, and employee conflict of interest disclosure form
6. Conflict of interests register
7. Conflict of interest disclosure statement - pre-appointment
8. Motion - Annual General Meeting disclosure
9. Conflict of interest disclosure statement - Annual General Meeting
10. Notice before finalising purchase of goods or services with a connected party or a supplier of commission or training services
11. Motion - Disclosing new arrangements for commission or training services
12. Conflict of interest disclosure statement - new arrangements
13. Motion - Updating disclosure of commission and training services
14. Motions – Annual insurance renewal
15. Summary - Annual insurance renewal quotations

But let me ask you this - who cares? 

Who cares if this week, meeting notices are going out without the necessary supporting documents? Who cares if new business is being won without pre-appointment disclosures? Who cares if goods and services are being purchased unwittingly and unknowingly by strata schemes from the strata manager operating under a different name? 

No one. No one really cares. 

The NSW government doesn’t care. There’s no funding in NSW for anything. With transport, health, and energy supply systems chronically underfunded, strata folk have no hope of money for investigations and regulatory enforcement. See for example, the unfolding debacle regarding the Net Strata investigations. 

Big Strata doesn’t care. The reforms they supported institutionalise conflicts of interest. As onerous as the new disclosure requirements are, they know no one will be there to police them. 

I’m not actually sure strata owners care, at least not en masse. The owners representative groups are vocal, but their membership is not broadly representative of strata owners across the country. In these times, if owners are told (as they are, by Big Strata) that three quotes and insurance commissions help keep levies down, then I suspect that’s all they really care about. 

The better question is – why should we care?

Those of us committed to strata professionalisation should care because these law reforms do nothing but show how ridiculous things have become. When it gets this hard to make a dollar, it’s the universe telling us something’s wrong. 

And we have got it wrong. The lawyers are right. The academics are right. The ethicists are right. Fiduciary agents must not have conflicts of interest. The sooner we embrace this fundamental rule of law, the better we become. 

‍PS – But in the meantime, we must comply with these laws and standards. So we have prepared a toolkit to help you until sanity prevails!