A conflict of interest is a situation in which a person is in a position to derive personal benefit from actions or decisions made in their official capacity. It is when private interests clash with professional duties. The person may not act wrongly, but the potential for bias exists.

Conflicts of interest are common in business, politics, medicine, and law. A board member who owns stock in a company the board is considering acquiring has a conflict. A doctor who receives payments from a drug company has a conflict. A politician voting on legislation that affects their family business has a conflict. The problem is not the conflict itself. It is failing to disclose it or manage it. Most organizations have policies requiring disclosure and recusal. The person steps aside from the decision. Transparency protects everyone. It protects the organization from bad decisions and the individual from accusations of impropriety. Even the appearance of a conflict can be damaging. Trust, once lost, is hard to rebuild.

Common examples

• Financial stakes in a decision
• Family or personal relationships
• Gifts or favors from interested parties
• Outside employment or consulting
• Board seats at competing companies