Conflict of Interest in the Workplace: Common Examples and How to Manage Them
A conflict of interest in the workplace arises when an employee’s personal interests intersect with their professional responsibilities in a way that could influence, or reasonably be perceived as influencing, their judgement.
For many employees, conflicts of interest still feel abstract, theoretical or even harmless. Accepting a gift from a supplier, recommending a former colleague, or holding shares in a company connected to their role rarely triggers a sense of risk. These situations are often seen as personal, informal or simply part of everyday professional life.
In reality, conflicts of interest remain a poorly understood grey area within organisations. Many employees are unaware that certain situations should be disclosed at all, not because of bad intent, but because the boundaries are unclear and guidance is often insufficient. What makes this particularly critical is that unmanaged conflicts of interest are often the starting point for more serious issues in the future. Situations that could have been identified and addressed early can escalate into ethical breaches, loss of trust or regulatory non-compliance.
For compliance and HR teams, this challenge is becoming increasingly strategic. Regulatory frameworks across worldwide jurisdictions now require organisations to actively identify, document and manage conflicts of interest as part of broader ethics and governance obligations. What was once treated as a secondary issue is now a core compliance expectation, making structured conflict of interest management essential to protect decision-making, organisational integrity and employee accountability. From a regulatory perspective, conflict of interest compliance is now considered a core element of corporate governance and ethics programmes.
Learn more ➡️ Why Disclosing Conflicts of Interest Protects You and Your Organisation
What Is a Conflict of Interest in the Workplace
A conflict of interest arises when an employee’s personal interests intersect with their professional responsibilities in a way that could influence, or reasonably be perceived as influencing their judgement.
From a compliance perspective, intent is not the determining factor. A conflict of interest exists as soon as a reasonable person could question an employee’s objectivity or independence.
This approach, often referred to as the “reasonable person test”, is commonly used in the UK and Australian legal and regulatory frameworks. Rather than focusing on the employee’s intent, the test asks whether a reasonable and impartial third party could view the situation as compromising objectivity or independence. If the answer is yes, the situation should be treated as a conflict of interest and disclosed, even if no improper action has occurred.
A conflict of interest does not constitute misconduct on its own. From a compliance perspective, it is a preventive mechanism that provides visibility into situations that may require safeguards before any wrongdoing occurs.
Conflict of Interest vs Corruption
Conflicts of interest and corruption are closely linked but distinct. A conflict of interest is a situation that creates risk, while corruption involves an actual breach of ethical or legal standards.
According to the Association of Certified Fraud Examiners (ACFE), nearly half of corruption cases begin with an unmanaged conflict of interest. This is why early disclosure is critical: when conflicts are identified and addressed in a timely manner, they can often be resolved before any wrongdoing occurs.
Common Examples of Conflicts of Interest in the Workplace
Conflicts of interest can arise in any organisation, regardless of size, sector or geography. They are often rooted in everyday professional situations, which explains why they are frequently overlooked or underestimated.
These workplace conflict of interest examples illustrate how easily risk can arise in everyday professional situations.
Financial Interests
A conflict of interest may arise when an employee involved in purchasing, supplier selection or strategic decisions holds financial interests in a third party connected to their role. This includes shares, investments or other economic ties, whether held directly or through close relatives, that could influence, or appear to influence, decision-making.
Personal and Family Relationships
Personal relationships are among the most common sources of conflicts of interest. Managing, recruiting or evaluating a family member, partner, or close friend can raise concerns around fairness, impartiality and transparency, even when decisions are made in good faith.
Gifts, Hospitality and Invitations
Gifts, invitations and hospitality are not conflicts of interest in themselves, but they can create conflict situations when they influence, or are perceived as influencing, professional judgement. This risk is heightened during sensitive periods such as tenders, negotiations or audits. As a result, many organisations include gifts and hospitality within their conflict of interest framework, focusing on transparency and disclosure rather than automatic prohibition.
Learn more ➡️ Gifts and Invitations: How to Stay Compliant During the Holiday Season
Outside Employment and External Activities
Secondary employment, advisory roles or external business activities may also create conflicts of interest when they compete with the employer’s interests, rely on confidential information or compromise independence. These situations are increasingly common and require clear disclosure rules.
Political or External Commitments
Political roles, public mandates or involvement in external organisations can also create conflicts of interest when they intersect with the organisation’s activities, regulatory environment or reputation.
Why Conflicts of Interest Are Difficult to Detect
Conflicts of interest are particularly challenging to manage because they are rarely visible by default. Unlike fraud or harassment, they do not always involve a clear incident or complaint. In many cases, only the employee concerned is aware of the situation.
One of the main difficulties lies in perception. Employees often do not recognise a situation as a conflict of interest, especially when no immediate harm is apparent. Without concrete examples, clear guidance or effective internal communication to prevent such situations, they may assume disclosure is unnecessary or irrelevant.
Organisational factors also play a role. When disclosure processes rely on annual declarations, emails or informal conversations, information becomes fragmented and difficult to track. This limits visibility for compliance and HR teams and makes it harder to identify patterns, recurring risks or sensitive roles.
Finally, cultural and psychological barriers should not be underestimated. Employees may fear judgement, escalation or unintended consequences, even when acting in good faith. Without trusted, confidential and well-structured disclosure mechanisms, potential conflicts remain unreported, increasing long-term ethical and regulatory exposure.
Legal and Regulatory Expectations Across Jurisdictions
Managing conflicts of interest is a legal and regulatory requirement in many jurisdictions. Organisations are increasingly expected to provide formal mechanisms allowing employees to disclose potential conflicts in a structured and traceable way.
In the European Union, the EU Whistleblower Protection Directive requires secure internal reporting channels for integrity-related risks, including situations that may lead to corruption or misconduct. Conflicts of interest are widely recognised as early risk indicators that must be reported internally.
In France, the Sapin II law identifies conflicts of interest as key corruption risk factors. Organisations must be able to demonstrate that employees can declare potential conflicts and that these declarations are assessed and documented as part of their compliance framework.
In the United Kingdom and the United States, corporate governance and anti-corruption laws require directors and employees to disclose situations where personal interests may influence professional decisions. Regulators regularly examine conflict of interest management when assessing internal controls.
Across these frameworks, the expectation is clear: policies alone are not sufficient. Organisations must be able to show that conflicts of interest can be disclosed, reviewed and managed in practice through a dedicated reporting process.
Learn more ➡️ Develop your Whistleblowing Policy
Best Practices for Managing Conflicts of Interest
Clear conflict of interest disclosure processes are essential to ensure consistency, traceability and regulatory defensibility.
A conflict of interest policy alone is no longer sufficient without practical disclosure mechanisms and ongoing communication. Effective conflict of interest management starts with prevention. Employees cannot disclose what they do not understand, which is why regular communication and awareness campaigns are essential. Organisations should not rely solely on static policies; they should actively remind employees what a conflict of interest is, when disclosure is required, and how to proceed in practice.
Regular disclosure campaigns play a key role in this approach. They help normalise the process, refresh awareness and ensure that conflicts are identified over time, not only when an issue arises. Campaigns are particularly important for exposed populations such as senior management, procurement teams, finance, compliance and decision-makers involved in supplier selection or strategic partnerships.
Targeted prevention is equally critical. Not all roles carry the same level of risk, and organisations should be able to adapt their approach accordingly. Having dedicated channels or workflows for high-risk functions allows compliance teams to apply appropriate oversight while maintaining proportionality and confidentiality.
Finally, disclosure mechanisms must support both employees and the organisation. Clear role separation, visibility for authorised stakeholders, and the ability to highlight sensitive cases when needed all contribute to a more effective, trusted process. When prevention, communication and structure work together, conflicts of interest can be managed early, consistently and transparently.
Clear conflict of interest disclosure processes are essential to ensure consistency, traceability and regulatory defensibility.
The Role of Technology in Conflict of Interest Management
Technology plays a key role in removing many of the barriers that prevent employees from disclosing conflicts of interest. One of the most significant benefits is that it moves disclosure away from one-to-one interactions. Instead of having to speak directly to a manager, HR, or compliance contact, employees can report situations through a neutral, structured channel. This helps decomplexify the process and reduces the emotional and psychological pressure often associated with disclosure.
Digital tools also make conflict of interest reporting accessible at any time. Conflicts do not arise only during annual campaigns or formal reviews. Providing an always available disclosure channel allows employees to report situations as soon as they arise, when they are easiest to assess and manage.
Accessibility is further reinforced through multilingual capabilities. In international organisations, employees may hesitate to disclose sensitive situations if the process is not available in their working language. Multilingual platforms ensure that conflict of interest management is inclusive, consistent and aligned across regions, reducing misunderstandings and uneven application of policies.
By centralising disclosures, standardising workflows and supporting confidentiality, technology enables compliance and HR teams to move from informal, fragmented processes to a more structured and preventive approach to conflict of interest management.
How Whispli Supports Conflict of Interest Management
Whispli’s platform supports organisations by providing a dedicated Conflict of Interest disclosure module that encourages reporting while maintaining confidentiality and structure. Employees can declare conflicts at any time, during and outside one-off campaigns, through a neutral, secure channel that removes the pressure of one-to-one disclosure. This helps normalise the process and lowers the threshold for speaking up.
The platform also supports prevention through regular and targeted disclosure campaigns. Organisations can focus on exposed populations, such as senior management, procurement, or strategic roles, while maintaining a consistent approach across the wider workforce. Multilingual capabilities ensure that disclosures are accessible across regions, supporting alignment in international environments.
All declarations are centralised in Whispli’s Case Management System, allowing compliance and HR teams to review situations, communicate with employees, and document decisions in a structured, traceable way. Clear access rights enable separating sensitive cases, highlighting higher-risk situations when needed, and ensuring appropriate oversight without compromising confidentiality.
By connecting prevention, disclosure, and case management in a single environment, Whispli enables organisations to move from fragmented handling to a coherent, proactive conflict of interest management approach.
Conclusion
Conflicts of interest are inevitable in complex organisations. What makes the difference is not their absence but the ability to identify and manage them early.
By educating employees, communicating regularly and providing clear disclosure channels, organisations can prevent minor situations from escalating into serious compliance or governance issues. When supported by the right tools, conflict of interest management becomes a lever for transparency, trust and ethical decision-making rather than a reactive obligation.
