9. Conflicts of Interest
Quick Read
Conflicts of interest arise when the various interests, duties or commitments that a person may have; family, friends, work, voluntary work or political interests, come into conflict (or are very likely to). These conflicts do not necessarily involve improper or corrupt behaviour, although they can lead to it.
An employee who is a director or shareholder of another organisation could compromise his or her duty to the company for example. An employee awarding a contract to a company in which he or she has a financial interest or has some other connection with, such as a relative or friend, would be another example of conflict of interest.
Key elements
- Register: Maintain an up-to-date register of conflicts of interest. Employees should declare any conflicts of interest or the likelihood of a future conflict in the register. A statement regarding declaration of conflicts of interest of directors and board members could be included in an annual statement.
- Recruitment: Screen potential board members and key employees for conflicts of interest.
- Mitigate: Require employees recuse themselves whenever there is a potential or perceived conflict of interest if it cannot be resolved.
