Conflict of Interest Policy (Kenya)
CONFLICT OF INTEREST POLICY
Companies Act No. 17 of 2015 | Leadership and Integrity Act No. 19 of 2012 | Public Officer Ethics Act No. 4 of 2003
Organisation: [Organisation Name] (BRS No: [BRS Number])
Registered Address: [Organisation Address]
Organisation Type: [Organisation Type]
Date Adopted: [Adoption Date]
1. PURPOSE AND LEGAL BASIS
1.1 This Conflict of Interest Policy (the "Policy") is adopted by [Organisation Name] (the "Organisation") to establish the procedures by which directors, officers, employees, and agents must identify, disclose, and manage situations where a personal interest conflicts — or could reasonably appear to conflict — with the interests of the Organisation.
1.2 This Policy gives effect to the obligations imposed by Section 144 (duty to avoid conflicts) and Section 145 (duty to declare interest in proposed transactions) of the Companies Act No. 17 of 2015, Chapter Six of the Constitution of Kenya 2010 (Leadership and Integrity), the Leadership and Integrity Act No. 19 of 2012, and the Public Officer Ethics Act No. 4 of 2003.
1.3 Compliance with this Policy is mandatory for all covered persons.
2. COVERED PERSONS
2.1 This Policy applies to the following categories of persons: [Covered Persons].
2.2 The Policy applies to all activities carried out on behalf of the Organisation, whether in Kenya or internationally.
3. DEFINITION OF CONFLICT OF INTEREST
3.1 A conflict of interest arises when a covered person has a direct or indirect personal, financial, or professional interest — including an interest of a spouse, parent, child, or business associate — that could impair, or could reasonably appear to impair, that person's ability to act in the best interests of the Organisation.
3.2 Conflicts include: (a) financial interests in suppliers, customers, or competitors of the Organisation; (b) directorships or employment in competing entities; (c) personal relationships that affect objective judgment; (d) gifts or hospitality that could create an obligation; and (e) any interest that could influence a procurement decision under the Public Procurement and Asset Disposal Act No. 33 of 2015.
3.3 An apparent conflict — a situation that could reasonably be perceived as a conflict by an informed third party — must be disclosed and managed in the same way as an actual conflict, consistent with the standards of Chapter Six of the Constitution of Kenya 2010.
4. DISCLOSURE OBLIGATION AND PROCEDURE
4.1 Every covered person must disclose any actual, potential, or apparent conflict of interest using the following method: [Disclosure Method].
4.2 Disclosure must be made: [Disclosure Timing].
4.3 For directors, declarations of interest in proposed transactions must be made to the board of directors before the transaction is entered into, as required by Section 145 of the Companies Act No. 17 of 2015.
4.4 All disclosures must be recorded in the Conflict of Interest Register maintained by [Register Keeper]. The Register shall include the name of the covered person, the nature and extent of the conflict, the date of disclosure, the action taken, and the outcome.
4.5 The Conflict of Interest Register shall be reviewed by the board or governing body at least annually.
5. RECUSAL PROCEDURE
5.1 A covered person who has disclosed a conflict of interest must recuse themselves from all discussion, deliberation, and voting related to the matter in which the conflict arises.
5.2 Recusal procedure: [Recusal Procedure].
5.3 The quorum for any decision from which a person has recused themselves shall be calculated without that person.
5.4 For public procurement decisions under the Public Procurement and Asset Disposal Act No. 33 of 2015, a conflicted committee member must withdraw entirely — there is no power to authorise participation, consistent with the requirements of the Public Procurement Regulatory Authority (PPRA).
6. CONSEQUENCES OF NON-COMPLIANCE
6.1 A covered person who fails to disclose a conflict of interest or who participates in a decision from which they should have recused themselves shall be subject to the following consequences: [Consequences Of Breach].
6.2 A transaction entered into in breach of this Policy may be voided by the Organisation at its election, and any financial benefit obtained by the non-disclosing person must be disgorged to the Organisation.
6.3 Breaches by public officers may be referred to the Ethics and Anti-Corruption Commission (EACC) for investigation under the Anti-Corruption and Economic Crimes Act No. 3 of 2003.
7. REVIEW AND GOVERNING LAW
7.1 This Policy shall be reviewed [Review Frequency] and updated to reflect changes in the Organisation's structure, operations, or applicable Kenyan law.
7.2 This Policy shall be governed by and construed in accordance with the laws of Kenya. Any disputes arising from this Policy shall be subject to the jurisdiction of the courts of [Governing County].
7.3 The Company Secretary or designated compliance officer responsible for administering and enforcing this Policy is [Company Secretary].
ADOPTED on behalf of [Organisation Name] by the undersigned duly authorised officers.
Chairperson / Chief Executive Officer
________________
Signature
Company Secretary / Compliance Officer
________________
Signature
What Is a Conflict of Interest Policy (Kenya)?
A Conflict of Interest Policy in Kenya records the organisation's binding rules on the matter it addresses.
Under the Companies Act No. 17 of 2015, a director of a Kenyan company owes statutory fiduciary duties that include the duty to avoid conflicts of interest. Section 145 of the Companies Act No. 17 of 2015 requires a director to declare any direct or indirect interest in a proposed transaction or arrangement with the company to the board of directors before the company enters into that transaction. Section 144 imposes a general duty on each director to avoid situations in which the director has or could have a direct or indirect interest that conflicts or may possibly conflict with the interests of the company. A written Conflict of Interest Policy operationalises these statutory duties by prescribing the disclosure process, the recusal mechanism, and the record-keeping obligations.
For public officers and persons in state office, the ethical obligations are prescribed by the Constitution of Kenya 2010, Chapter Six (Leadership and Integrity), the Leadership and Integrity Act No. 19 of 2012, and the Public Officer Ethics Act No. 4 of 2003 (as amended). These statutes require public officers to conduct themselves in ways that avoid conflicts between personal interest and official duties, to declare financial interests in the prescribed manner, and to recuse themselves from decisions in which they have a personal stake. The Ethics and Anti-Corruption Commission (EACC) enforces these provisions and may investigate public officers and state officers for breaches.
Non-governmental organisations registered under the Non-Governmental Organisations Co-ordination Act (Cap. 134) or the Societies Act (Cap. 108) are expected by donors, the NGO Co-ordination Board, and the Office of the Registrar of Societies to maintain a Conflict of Interest Policy as part of their governance framework. International donors — including the United States Agency for International Development (USAID), the UK Foreign, Commonwealth and Development Office (FCDO), and the Bill and Melinda Gates Foundation — routinely require Kenyan NGOs to adopt and certify compliance with a Conflict of Interest Policy as a condition of grant funding.
A Kenya Conflict of Interest Policy differs from a Non-Disclosure Agreement, which governs confidentiality of specific information rather than disclosure of personal interests. The policy also differs from a Code of Conduct, which is a broader behavioural framework. The Conflict of Interest Policy focuses narrowly on identifying, disclosing, and managing situations where personal interests intersect with official duties, and is a targeted governance mechanism recommended by the Institute of Directors Kenya (IoDK) for all Kenyan companies and organisations above a minimum governance threshold.
The legal framework governing the Conflict of Interest Policy (Kenya) in Kenya draws on several key statutes and regulatory bodies. Under the Companies Act No. 17 of 2015, the Registrar of Companies at the Office of the Attorney General maintains the register of Kenyan companies. Section 3 of the Law of Contract Act (Cap. 23) governs contractual obligations. The Competition Authority of Kenya (CAK) enforces the Competition Act No. 12 of 2010. The Kenya Revenue Authority (KRA) administers corporate tax under the Income Tax Act (Cap. 470). The High Court of Kenya has unlimited original jurisdiction under Article 165 of the Constitution of Kenya 2010. Parties executing a Conflict of Interest Policy (Kenya) in Kenya should confirm the document reflects current law, including any amendments enacted since the original drafting date. The Companies Act No. 17 of 2015 sets the foundational requirements.
When Do You Need a Conflict of Interest Policy (Kenya)?
A Kenya Conflict of Interest Policy is required in several specific governance situations affecting Kenyan companies, public bodies, and organisations.
A Conflict of Interest Policy is required when a company registered under the Companies Act No. 17 of 2015 appoints its first board of directors or when its governance charter — the Articles of Association filed with the Business Registration Service (BRS) — does not contain adequate conflict management procedures. Section 145 of the Companies Act creates a mandatory disclosure obligation but does not itself prescribe the disclosure mechanism — the Conflict of Interest Policy fills this gap.
A Conflict of Interest Policy is needed when a Kenyan NGO or civil society organisation applies for donor funding or grant accreditation. The NGO Co-ordination Board, which oversees organisations registered under the NGO Co-ordination Act (Cap. 134), requires evidence of a governance framework, and major international donors such as the European Union Delegation to Kenya and the United Nations Development Programme (UNDP) include the absence of a Conflict of Interest Policy as a compliance gap in their due diligence audits.
A Conflict of Interest Policy is required when a Kenyan public body, county government, or state corporation is establishing a procurement committee or tender evaluation panel. The Public Procurement and Asset Disposal Act No. 33 of 2015, enforced by the Public Procurement Regulatory Authority (PPRA), requires procurement officers and committee members to declare and manage conflicts before evaluating tenders. Failure to disclose a conflict in a public procurement process is an offence under the Act and may result in cancellation of the procurement and referral to the Ethics and Anti-Corruption Commission (EACC).
A Conflict of Interest Policy is needed when a SACCO regulated by the SACCO Societies Regulatory Authority (SASRA) or a microfinance institution supervised by the Central Bank of Kenya (CBK) wishes to demonstrate governance compliance to its regulator. SASRA's governance guidelines for deposit-taking SACCOs require board members and management to disclose conflicts and abstain from related-party decisions.
A Conflict of Interest Policy is required when any Kenyan organisation — including a chama registered under the Societies Act Cap. 108, a cooperative under the Co-operative Societies Act Cap. 490, or a private limited company under the Companies Act No. 17 of 2015 — faces a related-party transaction, such as a director wishing to sell property to the company or an officer recommending a supplier in which they hold shares.
What to Include in Your Conflict of Interest Policy (Kenya)
A Kenya Conflict of Interest Policy must include the following core provisions to be effective and consistent with the Companies Act No. 17 of 2015, the Leadership and Integrity Act No. 19 of 2012, and best-practice governance standards endorsed by the Institute of Directors Kenya (IoDK).
Scope and Covered Persons: The policy must identify the categories of persons it covers — typically board directors, senior management, procurement officers, employees with financial authority, and consultants or agents acting on the organisation's behalf. The scope must be clearly defined to avoid disputes about whether a particular individual was subject to the disclosure obligation.
Definition of Conflict of Interest: A clear definition of what constitutes a conflict of interest, including direct financial interests (shareholdings, directorships in competing entities, family business relationships), indirect interests (interests of a spouse, parent, child, or business associate), and non-financial interests (personal relationships, political affiliations, or other loyalties that could impair objective judgment). The definition should expressly include apparent conflicts — situations that could reasonably be perceived as conflicts by an informed third party — consistent with Chapter Six of the Constitution of Kenya 2010.
Disclosure Obligation and Procedure: The specific mechanism by which covered persons must disclose a conflict — typically a written declaration submitted to the Company Secretary or designated compliance officer, recorded in a Conflict of Interest Register maintained by the Business Registration Service (BRS) or internally. Section 145 of the Companies Act No. 17 of 2015 requires directors to declare interests at a board meeting. The policy should specify the timing (at the time the conflict arises, or annually via a standing declaration form).
Recusal Mechanism: Clear rules on when and how a conflicted person must recuse themselves from the discussion, vote, or decision-making process. The policy should specify that the conflicted person leaves the meeting room, that their absence is recorded in the minutes, and that the decision is made by a quorum of non-conflicted members.
Conflict of Interest Register: A requirement to maintain a written register of all disclosed conflicts, the nature of each conflict, the action taken (recusal, approval of the transaction, rejection), and the outcome. The register should be reviewed by the board audit committee annually.
Related-Party Transaction Approval: Rules for approving transactions between the organisation and a related party (director, officer, shareholder, or their associates), including the threshold above which independent board approval or shareholder approval is required. The Companies Act No. 17 of 2015 contains specific related-party transaction approval rules for public companies.
Consequences of Non-Disclosure: The disciplinary and legal consequences of failing to disclose a conflict, including removal from office, termination of employment under the Employment Act No. 11 of 2007, referral to the Ethics and Anti-Corruption Commission (EACC), or prosecution for corruption under the Anti-Corruption and Economic Crimes Act No. 3 of 2003.
Review and Amendment: A provision requiring the policy to be reviewed at least every two years and amended to reflect changes in the organisation's structure or applicable Kenyan law. The forms-legal.com Kenya Conflict of Interest Policy template covers all eight elements described above across a structured questionnaire.
Additional compliance elements for a Conflict of Interest Policy (Kenya) used in Kenya include: Under the Companies Act No. 17 of 2015, the Registrar of Companies at the Office of the Attorney General maintains the register of Kenyan companies. Section 3 of the Law of Contract Act (Cap. 23) governs contractual obligations. The Competition Authority of Kenya (CAK) enforces the Competition Act No. 12 of 2010. The Kenya Revenue Authority (KRA) administers corporate tax under the Income Tax Act (Cap. 470). The High Court of Kenya has unlimited original jurisdiction under Article 165 of the Constitution of Kenya 2010. Forms-legal.com provides this template as a starting point for Kenya-compliant documentation.
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year = {2026},
howpublished = {\url{https://forms-legal.com/kenya/business/corporate/conflict-of-interest-policy-kenya}},
note = {Free legal document template}
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Frequently Asked Questions
A standalone written Conflict of Interest Policy is not expressly mandated by a single Kenyan statute, but the underlying obligations it implements are mandatory for directors of Kenyan companies. Section 144 of the Companies Act No. 17 of 2015 imposes a statutory duty on every company director to avoid situations involving a conflict of interest. Section 145 requires directors to declare interests in proposed transactions to the board of directors. These obligations exist whether or not the company has adopted a formal written policy, but a written policy provides the mechanism — the disclosure form, the register, the recusal procedure — through which compliance is demonstrated. For public officers, the Leadership and Integrity Act No. 19 of 2012 and the Public Officer Ethics Act No. 4 of 2003 impose express conflict-of-interest declaration requirements enforceable by the Ethics and Anti-Corruption Commission (EACC). For NGOs, the NGO Co-ordination Board and most international donors require a written Conflict of Interest Policy as a governance prerequisite. In practice, Kenyan company law advisors and the Institute of Directors Kenya (IoDK) recommend that all companies above a minimum governance threshold adopt a written policy.
Under Section 145 of the Companies Act No. 17 of 2015, a director of a Kenyan company must declare to the other directors the nature and extent of any direct or indirect interest in a proposed transaction or arrangement with the company. The declaration must be made before the company enters into the transaction. Section 144 of the same Act imposes a broader duty to avoid situations where the director has a direct or indirect interest that conflicts or possibly conflicts with the interests of the company. The declaration must be made at a board meeting or by written notice to all other directors. The interest is recorded in the company's statutory books maintained by the Company Secretary and filed with the Business Registration Service (BRS) through the eCitizen portal where required. A director who fails to make the required declaration commits an offence under the Companies Act No. 17 of 2015 and is liable to a fine. The transaction itself may be voidable at the company's option if the undisclosed conflict materially affected the decision.
The Public Procurement and Asset Disposal Act No. 33 of 2015 (PPDA Act), enforced by the Public Procurement Regulatory Authority (PPRA), contains specific conflict of interest provisions applicable to all public sector procurement in Kenya. Section 45 of the PPDA Act requires every member of a procurement committee or tender evaluation committee to declare any personal, professional, or financial interest in any tender under evaluation. A member with a declared conflict must withdraw from the evaluation process and must not attempt to influence other committee members. Failure to declare a conflict is a procurement offence under the PPDA Act, with penalties including imprisonment of up to 10 years and a fine of up to KES 5 million. The Ethics and Anti-Corruption Commission (EACC) and the Directorate of Public Prosecutions (DPP) may investigate and prosecute public officers who fail to disclose conflicts in procurement processes. The Public Officer Ethics Act No. 4 of 2003 also requires public officers to file annual financial declarations with the relevant designated ethics officer, which forms the baseline for identifying potential conflicts in procurement decisions.
Yes. Non-governmental organisations registered under the NGO Co-ordination Act (Cap. 134) with the NGO Co-ordination Board, or under the Societies Act (Cap. 108) with the Registrar of Societies, are expected to maintain a Conflict of Interest Policy as part of their governance framework. The NGO Co-ordination Board requires registered NGOs to submit governance documents including constitutions, board composition, and financial management policies. International donors operating in Kenya — including USAID, DFID/FCDO, the European Union Delegation, and United Nations agencies — require Kenyan recipient organisations to certify that a written Conflict of Interest Policy is in place and is enforced as a condition of grant funding. The Kenya Revenue Authority (KRA) also expects tax-exempt organisations to demonstrate governance integrity through policies such as conflict of interest frameworks, consistent with conditions for income tax exemptions under Section 13 of the Income Tax Act (Cap. 470). Kenyan NGOs are advised by the Law Society of Kenya (LSK) to have their governance documents reviewed by an Advocate of the High Court of Kenya before submission to donors or regulatory bodies.
A director who breaches the conflict of interest obligations under the Companies Act No. 17 of 2015 faces both civil and criminal consequences in Kenya. Under Section 145(4) of the Companies Act, failure to make the required declaration of interest is a criminal offence punishable by a fine. The conflicted transaction may be voidable — the company may set it aside and recover any gain made by the director. The company may also bring a civil action against the director for account of profits, requiring the director to disgorge any financial benefit obtained from the undisclosed conflict. The High Court of Kenya (Commercial Division) has jurisdiction over company law disputes, and the Court of Appeal reviews High Court decisions. For public officers, the Ethics and Anti-Corruption Commission (EACC) may investigate and refer cases to the Directorate of Public Prosecutions (DPP) for prosecution under the Anti-Corruption and Economic Crimes Act No. 3 of 2003, which carries penalties of imprisonment up to 10 years for convictions involving abuse of office and conflict of interest. Directors may also face disqualification from acting as a company director under Section 155 of the Companies Act No. 17 of 2015.
Under the Companies Act No. 17 of 2015, whether a conflicted director may vote at a board meeting depends on the company's Articles of Association and the nature of the conflict. Section 145 requires the director to declare the interest, but does not automatically prohibit voting — the prohibition or permission to vote is governed by the company's Articles of Association. A company's Articles may provide that a conflicted director may not vote and may not be counted in the quorum for the relevant resolution, which is the standard recommended by the Institute of Directors Kenya (IoDK). Where the Articles are silent, the board may by resolution authorise the conflicted director to remain or to vote. For public bodies, the rules are stricter: the Leadership and Integrity Act No. 19 of 2012 and the PPDA Act both require the conflicted officer or committee member to withdraw entirely from the decision-making process — there is no power to authorise participation. A well-drafted Conflict of Interest Policy addresses this by specifying precisely when the conflicted individual must leave the meeting room, that their absence is recorded in the board minutes, and that the quorum is recalculated without them.
This template is provided for informational purposes only and does not constitute legal advice. Laws vary by jurisdiction and change over time. Consult a qualified attorney for advice specific to your situation.Full disclaimer
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