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Topic
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I have a situation where two members of the executive have an interest in an company that has been supplying goods and services to the strata. We only have four members, two representing the developer and also have a vested interest in the company supplying the goods and services. They used their position to ensure that all quotes for goods and services are only provided by their company. I believe this to be corrupt behaviour.
In other organisations where a member of the executive is tendering to supply goods and services they excuse themselves from voting on the matter. This has not occurred this situation. I have stated on many occasions that such actions and behaviour is a conflict of interest.
What options are available when such conflicts arise?
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Replies
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I think in the ACT (so perhaps in NSW) there are limits on the ability for the developer to lock the OC into service contracts during the period when the developer has control.
I would expect an EC member who could supply a commercial service to the OC to present on what he/she can offer but then absent himself from the meeting while the decision is made about whether to go with that offer or do something else. It would be minuted when that EC member was present and not present for which decisions. We have taken the same approach when it happened to be an EC member applying to make changes to their unit.
More generally, in some circumstances, handled transparently, as above, it might be quite advantageous and not inappropriate. An EC or OC member with some relevant expertise might offer their services at cost and consequently be cheaper than anyone else. The member would have an interest along with all the other owners in seeing the job done well. Still, it needs to be handled carefully and diligently.