Page 22 - AYO Governance Manual Draft

RELATED PARTIES TRANSACTIONS POLICY

Purpose

Related party transactions are transactions between entities or individuals who also hold governance
or management roles or are related to the same. As related party transactions have a possible
element of bias involved it is important that there are adequate procedures and policies in place to
ensure those involved in this process are not unduly influenced.

From a transparency perspective it is also important that any related party relationships and
transactions are disclosed to avoid public claims of hidden advantage or bias. There is also a reporting
requirement under accounting standards to ensure all related party transactions are disclosed in the
financial statements. This policy ensures that any Executive Committee members that have the
relationship do not have the overriding decision-making power.

Policy
A Related Parties Register will be kept by the AYO Secretary. The register will capture any interests EC
members have. This register will be updated regularly.

Before approving any application for a related party contract or service which has not yet been
entered into, the EC must be satisfied that there is no risk that the EC member who has an interest in
providing the contract or service has, or may have, received preferential treatment.

The EC minutes must record that the EC member who is interested in the contract or provision of
services, declared that interest and excluded themselves from meetings of the EC when the matter
was being considered.

In order to determine whether there is a risk of preferential treatment, the EC will consider…

 whether reasonable steps have been taken to ensure that all potentially interested
parties had an opportunity to tender for the contract;

 whether the Executive Committee has considered and evaluated each of the tenders or
quotes, and can justify the preferred choice on the basis of cost, performance, or quality
of service.