Why Disclosing Conflicts of Interest Protects You and Your Organisation

Imagine receiving a friendly invitation from a trusted supplier to attend a major event, or being asked to review a proposal from a company where a former colleague now works. These situations are part of everyday business life, are rarely malicious, and often rooted in long-term partnerships or simple gestures of goodwill.

Yet even when intentions are harmless, they can create a perception of bias that challenges the integrity of decisions. The line between courtesy and conflict is often thinner than it seems. What feels natural to one person might appear as preferential treatment to another.

Most conflicts of interest do not stem from bad behaviour but from a lack of awareness or communication. A gift not declared, a connection not disclosed, or a role misunderstood can unintentionally put both individuals and organisations at risk. Over time, these grey areas can quietly erode the culture of integrity that compliance teams work to protect.

That is why transparency matters. Identifying and disclosing potential conflicts early allows organisations to manage them fairly and demonstrate accountability.

The Hidden Cost of Ignoring Them

Conflicts of interest do not always make headlines, but the consequences of overlooking them are far from invisible. When left unmanaged, they can quietly undermine fairness, distort judgment, and weaken the foundation of trust that holds an organisation together.

A 2023 survey by the Ethics & Compliance Initiative (ECI) found that nearly 35% of employees have observed some form of misconduct linked to a conflict of interest. Even more strikingly, half of those incidents were never reported internally, often because employees did not recognise the situation as a conflict or feared overreacting.

This silence does not make problems disappear. On the contrary, it allows them to settle into the organisation’s routines, quietly influencing decisions and shaping perceptions over time. What begins as an isolated omission can gradually erode the foundations of trust, transparency, and fairness.

Reputational and Cultural Erosion

Trust takes years to build and moments to lose. A Deloitte survey shows that 57% of consumers permanently lose confidence in a company after an ethical scandal, even when no law has been broken.

As an example, when McKinsey & Company was linked to a politically connected consultancy during a project with South Africa’s state energy firm, no corruption was proven, yet the perception of a conflict of interest triggered public outrage, executive resignations, and lasting reputational damage.

When employees suspect hidden agendas or unequal treatment, engagement drops and ethical standards weaken. Over time, this corrodes organisational culture, replacing transparency with self-protection.

Operational and Financial Impact

Unchecked conflicts can distort procurement, recruitment, and partnership decisions. A PwC study found that companies without clear conflict management policies face up to 20% higher procurement costs due to biased or opaque processes.

When Boeing hired a senior U.S. Air Force official who had overseen its contracts, the appearance of a conflict of interest alone led to a multi-billion-dollar ban from government tenders and the dismissal of top executives.

Regulatory and Compliance Risks

Across industries, regulators increasingly demand transparency. The OECD Integrity Risk Report lists conflicts of interest among the top five causes of internal investigations worldwide.

Failing to identify or document potential conflicts is no longer considered an oversight, but a compliance failure. And as global frameworks such as the EU Whistleblowing Directive evolve, organisations are expected to prove that they actively monitor and manage conflicts.

The Price of Silence

Beyond metrics and policies, the deeper cost lies in culture. When people feel unsafe to disclose or fear being misunderstood, issues stay hidden. According to ECI, over 40% of employees who notice misconduct choose not to report it, most often because they believe “nothing will change”.

This silence creates a false sense of security and the illusion that no reports mean no problems. In reality, it reflects disengagement and a loss of confidence in compliance mechanisms.

Even in well-governed organisations, conflicts of interest can slip through unnoticed, not because of bad intent, but because of routine and silence. What matters most is not whether these situations occur, but how quickly they are identified and addressed. That is where a culture of transparency makes all the difference.

From Risk to Transparency: Building a Culture of Disclosure

Managing conflicts of interest is not only about compliance, it’s about building a culture where transparency is part of daily behaviour and not a reaction to risk. Organisations that embrace disclosure as a shared responsibility move from a defensive approach to one of trust and accountability.

A 2024 Ethisphere study found that companies with strong ethical cultures outperform their peers by 10% in long-term financial results. The link between integrity and performance is clear: when people feel empowered to act ethically, they make better decisions for the business as a whole.

Creating this culture requires more than policies or annual declarations. To turn these principles into everyday practice, organisations can focus on three key enablers of disclosure culture:

1) Awareness Through Education

Employees cannot disclose what they do not recognise. Clear communication and training are essential to help teams understand what a conflict of interest looks like in practice. This means going beyond definitions to include relatable examples, practical scenarios, and guidance tailored to specific roles.

Training should not aim to create fear of doing wrong, but to build awareness of when to raise a question. The message should be simple: disclosure protects, it does not accuse.

2) Accessibility Through Simplicity

Complex forms and rigid approval chains often discourage employees from reporting. However, modern compliance tools can change that dynamic.

Digital platforms allow employees to declare, review, and update potential disclosures in just a few clicks, reducing friction and uncertainty.

Automation also plays a crucial role. Predefined approval workflows, smart notifications, and integrated dashboards help compliance teams review submissions efficiently and maintain visibility across departments.

Finally, accessibility is not only about technology but also about inclusivity. A multilingual, mobile-friendly interface allows employees across regions and roles to engage equally. When disclosure becomes part of the natural workflow rather than an administrative burden, compliance evolves from obligation to reflex.

3) Confidence Through Trust

No disclosure system works without trust. Employees need to know that the information they share will be handled without negative consequences. Ensuring transparent review procedures and providing feedback on submitted disclosures all help build credibility.

Trust transforms disclosure from a compliance obligation into a sign of integrity. When employees feel supported rather than judged, they are far more likely to act proactively.

Making Disclosure Effortless with Whispli

Whispli’s new Conflicts of Interest Disclosure module was designed to help organisations move from reactive management to proactive prevention.

It enables to:

Disclose potential conflicts quickly and easily through an intuitive, multilingual interface available on desktop and mobile. Customisable forms guide users step by step, ensuring the right information is provided without complexity or hesitation.
Ensure transparency through smart workflows. Disclosures are automatically routed to the right reviewers or approvers based on your organisation’s internal policies. Configurable rules define thresholds, escalation paths, and approval levels depending on the nature or sensitivity of each declaration.
Centralise and track all disclosures in one secure platform. Compliance teams can visualise all ongoing and historical declarations in real time, monitor approval status, and generate audit-ready reports with a single click.
Automate notifications and reminders so that follow-ups and validations occur on time, reducing manual tracking and ensuring nothing falls through the cracks.
Launch awareness and reminder campaigns directly from the platform to encourage timely disclosures and maintain engagement across teams throughout the year.
Integrate seamlessly with Whispli’s Case Management system, enabling escalation, investigation, and follow-up of disclosures within a single, secure environment.

Because Whispli integrates seamlessly with existing compliance systems, organisations can manage conflicts of interest alongside other ethical and regulatory use cases such as gifts and hospitality management, whistleblowing and incident reporting, data protection and privacy breaches, etc. all within a single, unified compliance framework.

👉 Learn more about Whispli’s Conflict of Interest Disclosure module

The Future of Ethical Governance

As regulatory expectations rise and stakeholders demand greater accountability, the ability to detect, disclose, and manage conflicts of interest has become a defining element of good governance.

Beyond compliance, it is about protecting reputation, building trust, and ensuring integrity at every level of decision-making.

Conflicts of interest will always exist, but what distinguishes resilient organisations is their capacity to recognise them early and handle them transparently. With solutions like Whispli, teams can manage disclosures efficiently, maintain traceability, and embed ethical behaviour into everyday operations, turning transparency into a lasting advantage.