In this article, we’ll explain what a workplace conflict of interest is and how to recognize if such a thing occurs in your company.

How to handle conflict of interest in the workplace in a company might be tricky if your employees don’t know what a conflict of interest is; The first step and most important is prevention and information.

Your employees should have some guidelines that define what is considered a conflict of interest and what they should report to their manager or the human resource department.

Conflicts of interest can appear in any workplace, and if not treated correctly, they can affect the performance of your employees and your business. Some of them can even have legal repercussions for the parties involved.

The main topics of this article:

What is a workplace conflict of interest?

A workplace conflict of interest can be defined as when a person becomes unreliable because of a clash between professional duties or responsibilities and personal interests.

A conflict of interest jeopardizes an employee’s capacity to make objective decisions, judgments, or other actions that benefit the company they work for or their clients.

A workplace conflict of interest may be caused by external factors related to friendships, family, wealth, or other self-serving interests.

The conflict jeopardizes their capacity to make objective decisions, judgments, or actions that benefit their clients or employers.

Conflicts of interest are frequently caused by family, friendships, wealth, and self-serving interests.

Workplace conflict of interest: most common examples

We’ve prepared some examples of situations in which workplace conflict of interest can occur. Here are some of the cases you should be aware of:

Nepotism happens when someone who has a role of authority uses their position to benefit family members or friends. It usually occurs in the form of unjustified hirings, promotions, or favorable treatment. Coworkers and bosses may also be put in an unpleasant position since they may be hesitant to appraise the friend or family member honestly.

Romantic relationships between managers and subordinates may also be seen as nepotism. A workplace conflict of interest may occur when a person in a position of authority is dating a direct subordinate.

Another example is when an employee has a relationship with a firm client. The nature of the relationship may be pure friendship or romantic. It doesn’t really matter. Still, that client may be given some bargains that other business partners would not receive, which is contrary to the employer’s interest.

Competing with their employer
It’s considered a conflict of interest for an employee to create a firm or company that provides the same products or services as their employer. An employee can’t have his integrity un-shattered if he has a side business that directly competes with the products that his employer offers. To avoid this problem, many firms require employees to sign NDAs and NCAs.

Another example of a conflict of interest is when an employee consults or provides help or services to a competitor. They are not only damaging their employer by assisting another business, but they are also being paid for it.

Self-dealing is a type of workplace conflict of interest that occurs when someone designated to act on someone’s behalf acts in a way that benefits themselves monetarily above the interests of their client. Some examples of self-dealing are:

  • taking advantage of corporate opportunities;
  • advising a client to buy more products in order to meet your targets or to earn a more significant commission;
  • taking corporate funds as a personal loan;
  • insider trading, or buying stocks using inside knowledge;

Other conflict of interest at work examples

What is workplace conflict of interest (2)

Above, we’ve defined some of the most common workplace conflict of interest examples. Here are some more examples of conflicts of interest that might occur in the workplace:

  • Not revealing your relationship with a job prospect whom your company is considering recruiting;
  • Offering compensated services to a firm client in your off time;
  • Part-time employment with a business that provides competition to your full-time employer;
  • Not investigating the misbehavior of a subordinate or coworker because you have a friendly relationship with them;
  • Sharing confidential information;
  • Accepting money or goods in exchange for private information about the company your work for;
  • Having a stake in a company that offers products or services to your employer;
  • Accepting favors or gifts from a client above the amount stipulated by your employer;
  • Reporting to a manager who happens to be a friend or a family member;
  • Sharing information about your employer during an interview;
  • Using confidential information about your employer for personal gain;
  • Taking advantage of a business opportunity that your employer may have pursued;

How to avoid conflict of interest in the workplace?

It’s not possible to prevent all conflicts of interest in a business. However, the best way to discourage conflicts of interest is to make sure your employees are informed about what is considered a conflict of interest.

Sometimes, employees need clarification about what is a conflict of interest and what is not.

Your organization should include a code of conduct or conflict of interest policy in the employee handbook that tackles ethical problems that an employee may encounter. It can, for example, cover how workers should respond to bribery, data protection, sensitive information, and social media concerns.


Even if an employee is aware of a conflict of interest, they must be encouraged to report it to your organization. Creating formal reporting procedures provides employees with an open channel of contact via which they may express questions.

Employees do not always perceive workplace conflicts of interest. It is your responsibility to assist them in identifying ethical difficulties and making judgments.

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