20 Examples of Conflict of Interest in the Workplace - Indeed

A conflict of interest is when you have a certain personal interest that may interfere with the interests you must have as someone connected to ... 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CareerDevelopment20ExamplesofConflictofInterestintheWorkplaceApril1,2021ShareFacebookEmailLinkedInTwitterManycompaniesactivelyseektoeliminateconflictofinterestintheworkplacetoensurethebusinessremainssuccessfulanddoesn'tsubjectitselftoemployeeissues.Conflictsofinterestcanhaveaprofoundeffectonhowanemployeeperformsatwork,includinghowtheymakedecisions,andcan—bothdirectlyandindirectly—impactthebusinessanditssuccess.Whilenotallconflictsofinterestareapparent,it'simportanttounderstandwhattheyare,soyoucanavoidenteringasituationthatcouldcreateanissueandgetyouintotroublewithyouremployer.Inthisarticle,weexplainwhataconflictofinterestis,providealistofexamplesofconflictofinterestandsharestrategiesyoucanusetopreventconflictsofinterestatwork.Whatisaconflictofinterest?Aconflictofinterestiswhenyouhaveacertainpersonalinterestthatmayinterferewiththeinterestsyoumusthaveassomeoneconnectedtoanotherpersonorentity,likeyouremployer.Aconflictofinterestcancauseonepartytoquestionwhatanotherparty'sintentionsare.Itcanalsocalltoquestionyourabilitytoremainunbiasedinyourthoughts,ideasanddecisions.Intheworkplace,youcouldhaveaconflictofinterestthatcausesyouremployertoquestionyourintentionsandpossiblytakeadditionalstepstoaddressacurrentorpotentialissue.Sometypesofconflictsofinterestinclude:NepotismNepotismiswhensomeonehires,promotesorotherwiseprovidesspecialtreatmentintheworkplacetoafamilymemberorclosefriend.Nepotismisaconflictofinterestbecausethefamilymemberorfriendmayreceivejobperkstheydon'tnecessarilyqualifyfor.Topreventthisfromoccurring,employeesandmanagerscandisclosetherelationshipandchoosenottobeapartofhiringorpromotingforthatindividualorrole.Self-dealingSelf-dealingishappeningwhenanindividualinafinancialroleatanorganizationusestheirknowledgeofcompanyfinancesortheiraccesstofundstobenefitthemselvesovertheobjectivesofthebusiness.Toavoidthisconflictofinterest,individualscanchoosetoremainneutralandacthowtheywouldwithouttheknowledgetheypossess.GiftissuanceGiftissuanceisanotherconflictofinterestthatoccurswhensomeoneatacompanyacceptsgiftsfromaclient,vendororanotherpersontheyhaveabusinessrelationshipwith.Whileitmaybeaninnocentexchange,manycompaniesestablishpoliciesthatprohibitthissothereremainsnoquestionofhowprofessionaltherelationshipis.Avendororsupplierwhooffersagiftwillonlyturnintoaconflictofinterestiftheemployeeacceptsit,soit'sbesttothankthevendor,butturndownthegift.InsidertradingInsidertradingiswhenanindividualhasaccesstoconfidentialinformationandusesthatknowledgetofurtherthemselvesorotherstheyknow.Thisisacommonconflictofinterestinthefinancialindustry.Anindividualcanavoidinsidertradingbycontinuingtoactethicallyandwithoutbiasorremovingthemselvesfromtheroleiftheyfeeltoostrongofatemptationtoactoutoforder.Related:WhatIsVendorManagement?UnderstandingconflictofinterestWhenemployeesgotoworkforanorganization,thestakeholders,managersandmembersoftheexecutiveteamexpectacertainlevelofcommitmenttoremainingemployedatthecompanyandactinginthebestinterestofthebusiness.Manytimes,thehumanresourcesdepartmentrequiresthatanemployeesignanagreementthatstatestheyunderstandwhataconflictofinterestisandagreetoavoid,oratleastdisclose,situationsthatcanbeconsideredaconflict.Youmayevenfindanentiresectionofyouremployeehandbookdedicatedtodescribingconflictsofinterestandwhattodoifyouareinapotentialsituationthatsomeonecouldconstrueasaconflict.Anyoneatanorganizationmaydevelopaconflictofinterest,whetherthey'reentry-leveloramemberoftheexecutiveteam.Especiallyforboardmembers,whohavecertaindutiestotheorganization,it'simportantthattheyactinthebestinterestofthebusinessovertheirownpersonalgainsandspecialinterests.Iftheydon't,itcouldcauseharmtotheorganizationtheyareassociatedwith.Ifanemployerdeterminesthatthereisaconflictofinterest,anemployeemayexperiencedifferentoutcomes,frombeingaskedtoremovetheconflicttocompletejobloss,dependingonhowtheemployeehashandledtheconflictandthepotentialramificationsofhavingthatconflictinthefirstplace.Manyorganizationsalsohavenon-competeagreementstopreventemployeesfromhavingaconflictofinterestaftertheiremploymenthasended.Althoughit'scommontospeakaboutconflictsofinterestinabusinesssetting,thereareotherindustrieswhereitappliestoo,suchaslegalandfinancial.Related:GuideToImprovingTeamCommunicationintheWorkplace20conflictofinterestexamplesEventhoughconflictsofinterestcanoccurinanyworkplace,thereareoftenotherconsiderationsthatanindividualcanmaketopreventthemfromengaginginaconflict.Considertheseexamplesofconflictsofinterestsoyouareawareofwhatanemployermayconsideraconflictintheworkplace:Anexecutiveatthecompanywhoholdsseveralsharesofcompanystocksellstheirholdingsafterbecomingawarethatthebusinesswilltakecertainactionsthatcanlowerthepriceofstockinthenearfuture.Amanagerhirestheirnephewinasupervisoryroleeventhoughtheirfamilymemberdoesnothaveanyexperienceandothercandidatesarebettersuitedfortheposition.Anemployeeacceptsavacationpackageasagiftfromavendor,thenpurchasesmorethanwhatthebusinessneedsfromthevendorasathankyou.Ahumanresourcesprofessionalchoosingnottoinvestigateaclaimofinappropriatebehaviorbecausethepersonthecomplaintisagainstisapersonalfriendoftheirs.Anemployeeworksforamarketingagency,butusestheirworkaccountoncertaintoolsandprogramstomanagetheirownlistofclientsfortheirpersonalbusiness.Afinancialadvisorguidestheirclienttopurchasecertainstocks,bondsorotherassetsthathaveahighercommissionrate,butmaynotbethebestdecisionfortheclient,sotheycanbenefitfrommorepay.Anemployeewhoisworkingforonecompanywhiletalkingtoavendoraboutcomingtoworkfortheircompanyatafuturedate.Apersonbuyscompanystockbasedoninsiderinformationthey'vereceived.Anindividualsignsanon-competeagreementbeforestartingtheirjobatacompany.Theylaterendtheiremploymentwiththecompany,butgoontoworkforacompetitorandshareproprietaryinformationwiththenewemployer.Anaccountantforanorganizationwhousesthecompany'sfundstogivethemselvesapersonalloan.Ajudgewhohasapersonalrelationshipwithoneofthepartiesappearingbeforethemincourtthatchoosestopresideoverthecaseanyway.Asalesrepresentativeforacompanycreatestheirownpersonalwebsiteandsellstheiremployer'sproductswithoutdisclosingtherelationshiptheyhavewiththecompanyorgettingpermissionfrommanagement.Amanagerwhoentersintoaromanticrelationshipwithadirectreport.Thiscanbeaconflictofinterestbecausethemanagerisassumedtohaveabiastowardtheirsignificantotherandmayevenshareinsiderknowledgewiththemthattheyshouldkeepconfidential.Anemployeehasasecondjobatanorganizationthatdevelopsaproductoroffersaservicethatisindirectcompetitionwiththeirotheremployer.Anexecutivechoosesavendortohaveabusinessrelationshipwiththecompany,yettheyownstockinthevendor'sbusiness.Althoughtheintroductionofthevendorandtheirservicescanbebeneficialtotheorganization,theexecutivehasaspecialinterestintherelationship.Agraphicdesignerprovidespaidservicestotheiremployer'sclientafterworkinghours.Aboardmemberwhoprofitedfromservingontheboard.Anattorneywhoseekstorepresentboththeindividualsduringdivorceproceedings.Amanageradvocatesfortheirbestfriend'sdaughtertoreceiveapromotionoverotheremployeesintheofficewhoarebetterqualified.Anemployeewhohasacompetingsidebusinesswheretheindividualandthebusinessarepitchingthesameclientsandcustomers.StrategiesforpreventingaconflictofinterestatworkBecauseidentifyingaconflictofinterestisn'talwayseasy,youcouldengageinaconflictwithoutrealizingit.It'simportanttounderstandwhataconflictisandworkonavoidingthem.Topreventconflictofinterestatwork,considerthesetipsandstrategies:ReviewtheemployeehandbookManytimes,anorganizationdedicatesasectionoftheemployeehandbooktodescribingwhataconflictofinterestisfortheorganization,howyoucanavoidthemandwhattheconsequencesareifyouknowinglyengageinaconflict.Youmayalsofindthisinformationinacompany'scodeofconductoranon-disclosureagreement.Ifyouwanttoperformanactionintheworkplaceormakeadecisionandyou'reunsureifyouremployerwillconsideritaconflict,consideraskingyourhumanresourcesrepresentativeormanagerfirst.Related:30BestPiecesofCareerAdviceNoOneEverToldYouAttendbusinessethicstrainingIfyourcompanyoffersatrainingonbusinessethics,considersigningup.Thistrainingcanprovideevenmoreknowledgeaboutconflictsofinterestintheworkplace.Youmayhearaboutmorescenariosthatcanhelpguideyouinfuturesituations,helpingyouunderstandwhatconstitutesaconflictofinterestand,moreimportantly,whatyoucandoaboutyoursituationifyouconflictwithinterest.Related:FAQ:BusinessEthics(WithExamples)ReportconflictsofinterestIfyouknowthatacoworkerormanagerisengaginginaconflictofinterest,considertakingtheappropriatestepsasoutlinedinyouremployeehandbook.Thismayincludeapproachingtheindividualanddiscouragingthebehaviorormakingthemawarethattheiractionsareaconflictofinterest.Otherwise,mostorganizationsaskthatyouinformhumanresourcesofanyquestionableactivitiessotheycaninvestigate.Bytakingthisaction,you'recomplyingwiththecompany'scodeofconductandpossiblypreventingfutureconflictsintheworkplace.DiscloseOneofthebestwaystopreventconflictsofinterestisbydisclosingyourrelationshipsandpotentialconflictswithmanagementorhumanresources.Theyshouldbeabletoguideyouinwhatyoucandoorshouldbedoingtopreventconflictsfromoccurring.ReadMoreStockouts:Causes,EffectsandHowToAvoidThemTeamCapacityPlanning:WhatItIs,WhyIt'sImportantandStrategies122QuotestoMotivateYouThroughoutYourWorkdayRelatedViewMore arrowrightHowtoCreatethePerfectElevatorPitch-PlusExamples[Video+Transcript]Inthiscareeradvicevideo,learnhowtocreateanelevatorpitchforanetworkingeventorinterviewthattellsacompellingstoryaboutwhoyouareandwhereyouaregoinginyourcareerinundertwominutes.Myers-BriggsJobs:PersonalityTestToFindYourIdealCareer[Video+Transcript]Inthiscareeradvicevideo,learnindicatorsthatcanhelpyouidentifyyourMyers-Briggspersonalitytypeandjobsthatcouldbeagoodfitforyou.