Conflict resolution

In most circumstances it is in the interests of both the employer and its pension scheme that different interests are represented on the board of trustees. Where there might be conflicts, the duties and powers of the parties must be examined to ascertain whether there is actually a conflict.

A rigid regime to avoid conflicts can be counter-productive and impose unreasonable restrictions on the conduct of both the employer’s and the scheme’s activities; but where conflicts are real and serious, the resignation of one or more or all of the conflicted parties might be necessary.

‘Conflict of interest’ does not imply actual conflict between the parties, but when the directors of the employer, and even more so its shareholders, are trustees, they have legal conflicts of interest: they have duties to both parties whose interest can become opposed with differences that must be resolved. There can also be conflicts if trustees are also members of the scheme.

There are two main elements