Conflict of interest
Identification of situations where an employee could personally benefit from business decisions — purchases, contracting, alliances.
Linguistic warning signals
- references to personal relationships with suppliers or clients
- discussions about undisclosed equity stakes
- coordination of contracts with family or partners
- concealment of interest relationships in approvals
Why it matters
Conflict of interest differs from the other conducts in this catalog because it almost never starts as a crime — it starts as an omission. The employee doesn't disclose the relationship because they think "it's not a big deal," and that omission is exactly what turns a normal business decision into a corporate governance problem. The risk grows with time: the later it's discovered, the harder it is to tell whether there was intent to conceal or simple negligence, and both erode the trust of the board and investors.
Relevant regulatory framework
- Chile — Law 20.393, CMF NCG 461
- Brazil — Lei 12.846/2013, Code of Ethics
- Global — FCPA, OECD Guidelines
Recommended action
- 1Require disclosure of interest relationships before approving any relevant contract or purchase.
- 2Periodically cross-check the supplier and customer base against the register of relationships disclosed by employees.
- 3Escalate to compliance any sign of an undisclosed relationship identified in internal communications.
- 4Document the decision to proceed (or not) with an already-identified interest relationship.
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