If a related party deal becomes public, is your approval trail strong

Related party transactions are common and they are not automatically wrong.
The risk is not the transaction itself but how it looks when questioned.

If a related party deal becomes public, the organisation will be judged on three things:
1. Integrity.
2. Process.
3. Evidence.

Here is the approval trail that protects boards and owners:

Step 1. Identify early

The organisation must know who and what counts as a related party.
People change role, structures evolve and family connections do exist.
For this, the register must stay current.

Good practice
A maintained related party register, reviewed periodically, owned clearly.

Step 2. Document the rationale

The board must be able to show why this deal is in the organisation’s interest, including market terms, alternatives considered and risks evaluated.

Good practice
A board paper that is decision ready, stating the rationale, terms, benchmarking, and risk notes.

Step 3. Handle conflicts cleanly

The record must show who declared a conflict, who recused themselves and who voted.
Silence indicates and creates suspicion.

Good practice
Signed declarations, clear recusal language and clear minutes.

Step 4. Approve through the right path

Approvals must follow the governance route including committee review if required, board approval when needed and disclosure too.

Good practice
A clear workflow that is followed consistently and that does not need to be reinvented each time.

Step 5. Disclose with confidence

Disclosure is not only a filing exercise, it is a trust exercise. It must be designed to be complete and consistent.

Good practice
A disclosure checklist, fully reviewed and signed off.

AHM can support
Our Related Party Transactions Control Pack installs the register, workflow, templates, and training that keeps sensitive deals clean and defensible.