Conflict of interest examples: 20 workplace situations

A conflict of interest is a private interest that could influence, or could look as if it influences, how you do your job. Having one is not misconduct. Hiding it is the problem.

The 2024 ACFE Report to the Nations studied 1,921 occupational fraud cases and found that 48% involved some form of corruption, a category that includes conflicts of interest. That is a corruption figure, not a conflict-of-interest rate, but it shows what is at stake when a private interest goes unspoken.

Below are 20 situations in 4 sets of 5: money, family, outside work, and gifts and boards. Each one says why it counts and what to disclose. None is a ruling. Your employer's policy decides, so each ends with the same advice: check your policy and ask.

The test, in three lines

1. Ask: could a reasonable person think this affects your judgement?
2. If yes, tell someone before you act, not after.
3. Let your manager or compliance team decide, and step back from the decision until they have.

The US federal rules use the same idea. 5 CFR 2635.502 asks whether, in cases such as a household member's financial interest or a covered relationship, a reasonable person with knowledge of the relevant facts would question the employee's impartiality, and 5 CFR 2635.402 covers financial interests that would be affected by a matter the employee works on. Those rules bind US federal executive-branch employees only. For everyone else, the employer's policy is the standard.

Round 1: money and investments

Set 1: five money situations

1. You own shares in a supplier that bids for your team's contract. Your gain or loss could depend on the decision. Disclose the holding to your manager or compliance team and step back from the choice.
2. A business you part-own submits a bid. Even a small stake counts, because the money still reaches you. Disclose the stake in writing before the bid is opened, and keep out of the evaluation.
3. You take a second job with a competitor. You may hold information that helps them, or feel pulled between two employers. Tell your manager before you accept, and ask whether the policy allows it.
4. A vendor offers you a loan or a favourable deal. A debt to a supplier can colour how you treat them. Decline, or disclose it and let compliance decide.
5. You advise a company you have invested in. You could steer advice towards your own return. Disclose the investment to the person who asked for the advice.

Our pick: the supplier you part-own. It is the case people most often assume is fine, because "it is only a small share".

Round 2: family and relationships

Set 2: five relationship situations

1. You are asked to hire your cousin. Your judgement of the candidate may be biased, and others may think it is. Disclose the relationship and let someone else run the process.
2. You become the manager of your partner. You would set their pay, reviews and workload. Tell HR as soon as it happens, and ask about a change of reporting line.
3. You could award a contract to a friend's firm. The friendship may tilt the decision, or look as if it did. Disclose it and hand the decision to someone else.
4. Your spouse works for a client you manage. Each of you may learn things about the other's employer. Disclose it to your manager so that the account can be handled with that in mind.
5. A close friend applies for a role and you sit on the interview panel. It happens in every workplace. Tell the panel chair before the interviews, and step off the panel for that candidate.

Our pick: the friend on the panel. It happens in every workplace, it takes ten seconds to say, and it protects both of you.

Round 3: outside work and roles

Set 3: five outside-work situations

1. You freelance for a client's rival. Each side could reasonably doubt your loyalty. Disclose it to your manager and check the policy on outside work.
2. You run a side business during working hours. Your time and attention belong to your employer then. Disclose the business and agree what is allowed, and when.
3. You are invited to speak at a conference and offered a fee. The organiser may be a supplier or a customer. Tell your manager before you accept, and ask whether the fee is yours to keep.
4. You are asked to join another organisation's board. Its interests may overlap with your employer's. Disclose it to your manager and recuse yourself from any matter involving that organisation.
5. You use confidential information for a personal project. Information you hold because of your job is not yours to use elsewhere. Do not use it, and if you already have, tell your manager.

Our pick: the side business on work time. It starts small, with one email or one call, and it is the one most people can see themselves doing.

Two UK examples show the same idea in law and in the public sector, and neither is a rule for private-sector employees in general. The Civil Service Code says civil servants must not misuse their official position, for example by using information acquired in their duties to further their private interests or those of others. And section 175 of the Companies Act 2006 says a company director must avoid a situation in which they have, or can have, an interest that conflicts, or possibly may conflict, with the company's interests, unless the directors have authorised it.

Round 4: gifts, hospitality and board seats

Set 4: five gift and board situations

1. A vendor sends a holiday hamper. A thank-you can become an expectation. Disclose it, and ask whether to return it, share it with the team or keep it.
2. A bidder offers you tickets during a tender. The timing is the problem. Decline, or disclose the offer and let compliance decide before the tender ends.
3. A supplier gives a gift to a decision maker. It can look like an attempt to buy a decision. Record it, and take the decision maker out of that supplier's decisions if the gift is large.
4. You sit on a charity board that buys from one of your suppliers. Two loyalties meet in one decision. Declare the link at the board and leave the room when it votes.
5. A speaker's honorarium arrives from a company you buy from. Payment from a supplier is a gift in practice. Disclose it before you accept.

Our pick: tickets from a bidder during a tender. It looks harmless, and it is the situation where a perceived conflict does the most damage.

On gifts, the federal rule, 5 CFR 2635.202, says that, except as provided in that subpart, an employee may not accept a gift from a prohibited source or a gift given because of their official position. It is for US federal employees. Private employers set their own limits, so look for a gifts and hospitality policy before you accept.

How to disclose and manage a conflict

1. Say it early and in writing. An email to your manager or compliance team is a record.
2. Describe the interest, not just the fact. "My brother owns the firm" is better than "I know them".
3. Step back from the decision. Do not vote, review or advise on it until the outcome is recorded.
4. Let your manager or compliance team record the outcome. The decision is theirs, not yours.
5. Review it when things change. A new role, a new bid or a new share can make an old arrangement a conflict.

Remember the ACFE figure: 48% of the 1,921 cases it studied involved corruption. A conflict that is declared early is far easier to manage than one that is found later. For more on making it safe to speak up, see our guide to the anonymous survey and our post on the compliance trap.

Ways to host this as a team session

A policy that is read once is forgotten. A short live session gets people to say what they would do.

• Pick Answer: put one situation on screen and ask "Is this a conflict? Yes, no, or disclose and ask." Show the split, then discuss the examples where people disagreed.
• Word Cloud: ask "What would make you hesitate to disclose?" The biggest words are the barriers to fix.
• Rating Scale: ask "How clear is our conflict of interest policy?" before and after the session.
• Open Ended, anonymous: ask for a scenario your team has faced, and discuss it without names.
• Q&A, anonymous: open it for the questions people will not ask aloud. Our tips for a successful Q&A session help you run it well.

Use the 20 situations above as your questions. If you want slides ready to adapt, the Conflicts of interest course template is built for this.

Frequently asked questions

What is a conflict of interest?

A private interest that could influence, or appear to influence, your work decisions. It can be money, family, another job or a gift.

What are examples of conflicts of interest at work?

Owning part of a supplier, hiring a relative, taking gifts from a bidder, or running a side business for a competitor. The 20 situations above give more.

Is a conflict of interest illegal?

Not by itself. For most employees it is a matter of employer policy, and the harm comes from not disclosing it, though some roles carry legal duties, such as company directors in the UK under section 175 of the Companies Act 2006. US federal employees face specific rules, including a criminal statute, 18 U.S.C. 208, which 5 CFR 2635.402 describes.

How do you disclose a conflict of interest?

Tell your manager or compliance team in writing as soon as you spot it, and step back from the decision. Describe the interest, not just the fact.

What is the difference between an actual and a perceived conflict?

An actual conflict affects your judgement; a perceived one only looks as if it could. Both are worth disclosing.

Where to start

Pick one set of five and use it at your next team meeting. If you only have time for one, start with the friend on the interview panel.

This post is general information, not legal advice. For a decision about your own workplace, speak to a qualified employment lawyer or the regulator.