Conflicts of Professional Interest

Monday, April 10, 2017 | Posted by: Alpha Kappa Psi



Conflicts of interest often appear in business relationships; some are easy to recognize and some are not. In this blog post, we’ll help you understand what exactly makes something a conflict of interest, and share tips for what you can do when you recognize one.



Any time someone in a position of trust and power at an organization has another outside motivation that could possibly corrupt their reasoning and actions, that’s a conflict of interest. For many high-functioning professionals, conflicts of interest can be impossible to avoid. For example, if you work for a company and have been trusted with choosing a charitable organization to donate to, and you serve on the board of one or more worthy organizations, what comes next?

Now, it may be the case that you think this conflict is okay. If the company decides to donate or volunteer for a charity only because someone at a high level is on the board, is that a terrible outcome? Not exactly—but did you consider other charities and organizations, or just let one person make the decision?

Action is Irrelevant
The situation outlined above definitely constitutes a conflict of interest, and even if you choose to donate to an organization you aren’t involved in, the conflict still exists. A conflict of interest doesn’t have to have improper outcomes for it to be a serious ethical or professional issue. Who knows what rumors will spread inside and outside the company about why the beneficiary was chosen? Your own attitudes about the donation might even be affected if you feel it should have gone elsewhere. This is just one example of how a conflict of interest can disturb both a workplace and an individual’s personal reputation, even if the outcomes aren’t bad.


Common Conflicts

Here are some:


Self-dealing: if someone owns or is a controlling/ trusted party in two businesses and has them do business with each other.


Outside employment: when someone has two jobs that directly conflict.


Family interests: these conflicts, also called nepotism, arise when a family member is hired or contracted as a vendor by a business owner or decision maker, even if they think otherwise.


Gifts: when friends who do business with the owner or decision-maker give them gifts, it creates a conflict of interest, even if they think otherwise.


Pump and Dump: when a stockbroker spreads rumors to inflate the price of a stock or security before selling, then uses rumors again to drive the price down.


What to Do

Firstly, every company needs to establish a written code of ethics. All employees should be required to sign a statement that they read and understood this ethical code. In this document, it should be clearly outlined what your company considers a conflict of interest, and how employees go about disclosing one if they find themselves needing to do so. It may even be a good idea to keep documentation of everyone’s outside affiliations with other businesses and organizations.


If you know someone at your company is not reporting a conflict of interest, there is always someone who can help restore equity. Go to a trusted supervisor or decision-maker with your concerns, or even the individual themselves if you think they are simply unaware of the ethical implications of their choices.


No company wants to discourage its employees from outside interests and engagements, but when they could influence the decision-making at the company, it’s time to hit the brakes. Keep your eye out for conflicts of interest, and remember they can be damaging even if they don’t lead to bad outcomes.



Have you ever faced a conflict of interest? How did you handle the situation? Let us know in the comments!

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