Rebecca Twemlow, who is a Business South board member, was shocked by the way council chief executive Sandy Graham chose to highlight potential conflicts of interest, describing her approach as "intimidating".
Ms Graham said she had been professional and appropriate.
Election nominations have yet to open, but in January it was announced Mrs Twemlow would be running for council on the Future Dunedin ticket led by businessman Andrew Simms.
Ms Graham flagged a potential issue with Business South chief executive Mike Collins last month, although both chief executives said their discussion was not about whether it was appropriate for any individual to stand as a candidate.
"The discussion’s focus was on how to manage any actual or perceived conflicts of interest arising from the overlap between council responsibilities and those of Business South as an advocacy group," they said in a joint statement.
The matter was also discussed at Business South board level and Mr Collins said Ms Graham was then told the board "could not foresee any conflicts at this time and the two organisations would continue to work together as they always had".
"The board further advised that any further conflicts in the future would be managed."
Mrs Twemlow was perplexed.
"I can easily manage conflicts of interest," she said.
"I’m not a 20-year-old just out of university with no experience in governance."
She wondered if Ms Graham intended to approach various other organisations with connections to council candidates to warn them about potential conflicts of interest.
"I don’t believe that’s the case, and I do believe that this is personal," she said.
"If I wasn’t running for the ticket with Andrew, would we be talking about this?"
The chief executive had been "known to make very disparaging remarks about me", Mrs Twemlow said.
A council spokesman said conflicts of interest had come up ahead of previous elections and "it is not unusual for matters of this nature — involving a potential overlap of responsibilities between two bodies — to be discussed in advance".
The same issues would be considered "whenever a potential conflict of interest is identified".
Ms Graham had no response regarding alleged disparaging comments.
Both Ms Graham and Mr Collins rejected any suggestion any aspect of "the actions taken" by them were inappropriate.
"Ms Graham also stands by her work to encourage candidates to stand for local body elections, as is required in her role as chief executive, and rejects any accusation to the contrary."
There are differing accounts of the discussion between Ms Graham and Mr Collins and how its implications were interpreted.
Ms Graham said she "informally raised the issue of what impact there would be, if any, should a Business South board member be elected as a councillor in this year’s local body elections".
The discussion was about how to manage a situation, "should it arise", a council spokesman said.
It was prompted by "high-profile campaign publicity which attracted media coverage".
Ms Graham said council staff had previously provided advice on such matters and, "given the possible candidacy announced recently, it is entirely appropriate to have an early discussion this time".
However, Business South chairwoman Dominique Dowding said in an email she was advised of a discussion between Ms Graham and Mr Collins and she understood from this the council had "concerns about dealing with Business South when one of our board members is running for council".
"Our CEO immediately informed me, and I directly discussed this potential conflict with [Mrs Twemlow]," she told the ODT.
She believed the discussion between the two chief executives included the council expressing "concerns about the potential conflict of one of our directors running for council when we were an advocacy organisation".
Mrs Twemlow inferred Ms Graham had "voiced her concerns about my running for council and that the council will no longer be able to work with [Business South]".
The two chief executives did not endorse this characterisation.
Mr Simms said the whole incident was regrettable.
"Whether it was intentional or not, this matter has had the effect of intimidating a new candidate who has put herself forward for election," he said.
Cr Sophie Barker said it was important for council candidates to be involved in their community.
"There are many current councillors who are also board members and involved in outside organisations," she said.
Cr Barker noted council chief executives had legislated responsibilities about "facilitating and fostering representative and substantial elector participation in elections".
"In my view, that’s a vital role and CEOs should be above any judgement on perceived conflicts of interest.
"Their role is to advise and support — we need good people to stand for council."
