Conflict of Interest
What you should know
Conflicts of interest distort decision-making and compromise governance. When personal, financial, or external interests influence corporate decisions, the consequences can be legal, financial, and reputational — often simultaneously.
Why It Matters
Undisclosed conflicts have triggered billion-dollar penalties and executive convictions:
A large US retail bank – $3B (2020) for sales practices driven by misaligned incentives.
An investment bank – $2.9B (2020) over the 1MDB scandal involving conflicted executives.
A major electronics conglomerate – CEO Jay Y. Lee convicted (2017) for bribery linked to corporate control.
Conflicts not only violate ethics — they erode stakeholder trust and destabilize long-term value.
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Your Leadership Checklist
Require annual disclosure of interests across leadership and critical functions.
Establish recusal procedures for conflicted parties in decision-making.
Integrate third-party vetting into procurement and hiring.
Conduct regular conflict-of-interest audits and scenario-based staff training.
Core Requirements
Across jurisdictions, Conflict of interest regulations converge around three pillars:
Self-dealing:
Awarding contracts to personal connections.
Outside roles:
Undisclosed board seats or consulting.
Gifts & benefits:
Receiving incentives that sway judgment.
Nepotism:
Promoting family without merit.
Dual loyalties:
Serving competitors or conflicted entities.
Strategic Implications
Cross-border enforcement is rising (e.g. Petrobras investors pursued under U.S. SEC rules).
Want the full picture?
Download our executive guide with legal frameworks, global enforcement cases, and 2024 updates.
