Employee Conflict of Interest Policy Template

Trust is foundational in every workplace — and protecting that trust starts with transparency. A conflict of interest arises when an employee’s personal interests have the potential to interfere with their responsibilities to the company. Left unaddressed, even the perception of a conflict can compromise team morale, business decisions, or company reputation.

A clear Employee Conflict of Interest Policy provides employees with the guidance they need to recognize and report potential conflicts early. It also helps organizations maintain ethical standards and uphold fair, unbiased decision-making.

What the Conflict of Interest Policy Should Include

To be clear and enforceable, your policy should outline:

• Purpose and scope: Why the policy exists and who it applies to.
• Definition of a conflict of interest: Including real, potential, and perceived conflicts.
• Examples of conflicts: Financial interests, family relationships, outside employment, gifts, and more.
• Disclosure process: How employees should report potential conflicts and who to contact.
• Review and resolution process: How the company investigates and addresses conflicts.
• Prohibited activities: Clear boundaries around gifts, side jobs, vendor relationships, etc.
• Retaliation protections: Assurance that disclosure won’t lead to punishment.
• Legal and compliance alignment: Statement of adherence to company ethics and relevant laws.
• Manager and employee responsibilities: Roles in identifying and managing risks.

Purpose of the Conflict of Interest Policy

The purpose of this policy is to:

• Ensure employees make decisions in the best interest of [Company Name], not influenced by personal gain.
• Help employees recognize situations that could create — or appear to create — conflicts.
• Establish a consistent, fair process for disclosing and addressing conflicts.
• Promote transparency, compliance, and ethical business practices at all levels of the organization.

This policy is not about punishing relationships or outside interests — it’s about protecting objectivity and trust.

Sample Employee Conflict of Interest Policy

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Effective Date: [Insert Date]
Policy Owner: People Team / Compliance / Legal
Last Reviewed: [Insert Date]

1. Policy Overview

At [Company Name], we expect all employees to act in the company’s best interest and to avoid situations where personal interests might conflict — or appear to conflict — with professional duties.

This policy outlines what a conflict of interest is, provides examples, and explains the process for disclosing and resolving potential issues. It applies to all employees, contractors, and temporary workers across all departments and locations.

2. What Is a Conflict of Interest?

A conflict of interest occurs when an individual’s personal, financial, or outside interests could interfere with their ability to act in the best interest of [Company Name]. Conflicts may be:

• Actual: A direct conflict that currently exists.
• Potential: A situation that could become a conflict in the future.
• Perceived: A situation that may appear to others as a conflict, even if none exists.

Even perceived conflicts can damage trust and should be disclosed.

3. Examples of Conflicts of Interest

The following are common examples of conflicts:

• Outside Employment: Working for a competitor, supplier, or client while employed at [Company Name].
• Personal Relationships: Supervising or influencing employment decisions involving family members, romantic partners, or close friends.
• Financial Interests: Owning a significant stake in a company that does business with [Company Name].
• Vendor Relationships: Steering contracts toward a business owned by a relative or friend without proper review.
• Gifts and Hospitality: Accepting gifts, entertainment, or favors from vendors, clients, or partners that could bias judgment.
• Use of Company Resources: Using [Company Name] property, time, or information for personal benefit or external business activities.

Not all situations are black and white — when in doubt, disclose.

4. Disclosure Process

Employees are required to disclose any actual, potential, or perceived conflicts of interest as soon as they become aware of them. To do so:

1. Complete the Conflict of Interest Disclosure Form (available on [Company intranet or HR platform]).
2. Submit the form to your manager and the People Team or Legal.
3. Participate in the review process to determine whether the conflict can be resolved or managed.

You may also reach out directly to HR or Compliance if you're unsure whether a situation requires disclosure.

5. How Conflicts Are Evaluated

Once a conflict is reported:

• HR or Legal will conduct a case-by-case review, evaluating the nature of the conflict, the employee’s role, and the potential impact.
• The review team may consult with department heads, Ethics Officers, or other relevant parties.
• Outcomes may include approval of the situation, implementation of a mitigation plan, or reassignment of responsibilities.

All decisions and mitigation steps will be documented and shared with the employee.

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6. Prohibited Activities

Certain activities are prohibited due to the high likelihood of creating bias, risk, or legal liability:

• Hiring, supervising, or evaluating a family member without prior written approval.
• Accepting bribes, kickbacks, or lavish gifts from clients, partners, or vendors.
• Participating in decisions where you have a financial or personal stake.
• Using confidential company information for personal gain.
• Engaging in outside business that directly competes with [Company Name] or uses company resources.

Failure to disclose these activities may result in disciplinary action, up to and including termination.

7. Retaliation Is Prohibited

Employees who report a conflict of interest or participate in a review process in good faith will not be subject to retaliation. If you believe you have experienced retaliation for raising a concern, contact the People Team or Legal immediately.

8. Employee and Manager Responsibilities

Employees are expected to:

• Review this policy and disclose any conflicts promptly.
• Ask for guidance if unsure whether a situation qualifies as a conflict.
• Avoid making decisions or taking actions that may be influenced by outside interests.

Managers are expected to:

• Create an environment where disclosure is safe and encouraged.
• Promptly escalate reported conflicts to HR or Legal.
• Avoid placing employees in situations that may compromise objectivity.

9. Legal and Ethical Compliance

This policy is designed to ensure compliance with:

• Internal codes of conduct and ethics policies
• Federal, state, and local laws governing conflicts of interest and business ethics
• Any industry-specific regulations that may apply to our operations

Frequently Asked Questions

1. What if I’m not sure whether something is a conflict of interest?
When in doubt — disclose. The review process is designed to help you evaluate the situation and determine next steps.

2. Will I get in trouble for disclosing a potential conflict?
No. You’re encouraged to disclose, and there’s no penalty for being proactive. You will not face retaliation for a good-faith disclosure.

3. Can I accept a small gift from a vendor or client?
Generally, modest gifts under [Insert dollar threshold, e.g., $50] are acceptable, but it’s always best to disclose. Lavish or frequent gifts should be declined.

4. What happens after I disclose a conflict?
HR or Legal will review the situation and may implement a mitigation plan (e.g., removing you from a decision-making role). You’ll be kept informed of the outcome.

5. Does this policy apply outside of work hours?
Yes — especially when your outside interests affect your role, decisions, or perception of bias at work.

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