Template · Policies and handbooks
Conflict of interest policy
In short
A conflict of interest policy requires employees to disclose situations where personal interests could influence, or look like they influence, their work decisions: outside jobs, financial stakes in vendors, relatives in the reporting line, gifts. This template includes the policy, a disclosure form, a review process and examples specific to hiring and staffing vendors.
Conflict of Interest Policy and Disclosure template
Conflict of Interest Policy and Disclosure
Replace each [Placeholder]. Set gift limits and approval levels that match your industry. Public companies, nonprofits, healthcare organizations and government contractors may have additional disclosure rules.
1. Purpose
Employees must make decisions for [Company Name] based on what is best for the company, its customers and its people, not on personal gain or relationships. A conflict of interest exists when a personal interest could influence, or reasonably appear to influence, how you do your job. Having a conflict is not by itself a violation. Failing to disclose it, or acting on it, is.
2. Who this applies to
All employees, officers and directors, and, where their contracts say so, contractors and temporary workers. Certain roles must also complete an annual disclosure: [managers at level X and above, anyone who selects or manages vendors, recruiters and hiring managers, finance and purchasing staff].
3. Common conflicts
You must disclose the following before acting on any related decision:
- **Outside employment or business.** A second job, freelance work, board seat or business of your own that competes with us, does business with us, or uses company time, equipment or information. - **Financial interests.** You or a family member own more than [1%] of, or receive income from, a supplier, customer, staffing agency or competitor. - **Relatives and close personal relationships.** A family member or someone you are in a romantic relationship with applies for a job, works in your reporting line, or works for a vendor or customer you deal with. - **Gifts and hospitality.** Anything of value from a current or prospective vendor, customer or candidate beyond the limits in section 5. - **Corporate opportunities.** Using for yourself a business opportunity you learned about through your job. - **Hiring and referrals.** Recommending, interviewing or deciding on a candidate you know personally beyond a casual acquaintance.
"Family member" means spouse or domestic partner, parent, child, sibling, grandparent, grandchild, in-law and anyone living in your household.
4. Hiring, referrals and staffing vendors
Employees may refer friends and relatives through the [Employee Referral Program]. Anyone with a personal connection to a candidate must disclose it and may not interview, score or decide on that candidate. Employees may not supervise, approve the pay, schedule or performance review of a family member or partner. Recruiters and managers who select staffing agencies, job boards, assessment vendors or background check providers may not accept payments, referral fees or personal benefits from those vendors, and must disclose any personal or financial relationship with them.
5. Gifts and hospitality
You may accept gifts of nominal value (up to [$75] per source per year) and ordinary business meals where the business purpose is clear. You may not accept cash or cash equivalents such as gift cards of any amount, gifts during an active selection or contract negotiation with the giver, or travel and lodging paid by a vendor without written approval from [title]. Report any gift above the limit to [contact]; we may ask you to return it or share it with your team.
6. Outside employment
We respect what employees do on their own time. Outside work is allowed if it does not compete with us, does not involve company confidential information, time or equipment, and does not affect your performance or schedule. Employees in [roles] must tell [manager or HR] before starting any outside work. Nothing in this policy restricts lawful off-duty conduct that state law protects.
7. How to disclose and what happens next
Complete the disclosure form below when a potential conflict arises and at least once a year if your role requires it. Your manager and [Compliance or HR] will review it within [10 business days] and decide whether there is a conflict and how to manage it, for example by removing you from a decision, changing a reporting line, or requiring that a relationship end. You will receive the decision in writing. If circumstances change, update your disclosure.
8. Violations
Failing to disclose a conflict, giving false information, or acting on a conflict after being told not to may lead to discipline up to termination and to recovery of any improper gain. Report suspected violations to [HR], [Compliance] or the [ethics hotline]. Retaliation against anyone who reports in good faith is prohibited. Effective date: [Date].
Conflict of interest disclosure form
- Employee name
- Job title and department
- Type of disclosure
- Annual disclosureNew potential conflictChange to a previous disclosure
- I have no conflicts of interest to disclose.
- Type of conflict
- Outside employment or businessFinancial interestFamily member or relationshipGift or hospitalityHiring or referralOther
- Describe the situation, the people or companies involved, and your role in any related decisions
- Steps I propose to avoid or manage the conflict
- I confirm this disclosure is complete and accurate and I will update it if anything changes.
- Employee signature
- Date
Review (HR / Compliance use)
- Reviewer name and title
- Outcome
- No conflictConflict: approved with conditionsConflict: not approved
- Conditions or required actions
- Reviewer signature
- Date communicated to employee
How to use this template
- Decide which roles complete an annual disclosure; at minimum include leaders, purchasing, finance, recruiters and anyone who selects vendors.
- Set a dollar gift limit and an approval route that fit your industry and any client or regulatory rules you work under.
- Name who reviews disclosures and how fast, and give that person a short decision guide so outcomes are consistent.
- Add the hiring rules to your interview process: recruiters ask panelists to declare personal connections before the interview.
- Run the annual disclosure in the same month each year and chase non-responses like any other compliance training.
- Store disclosures and decisions in a confidential file, and revisit approved conflicts when roles change.
What a good policy does
Most conflicts are ordinary: a supervisor's niece applies for a job, a recruiter's former colleague now sells job board advertising, an agent drives for a rideshare app on weekends. The point is not to ban these situations but to surface them so someone neutral can decide how to handle them. A policy that treats every disclosure as a confession gets no disclosures.
So the template separates having a conflict from violating the policy, offers clear examples, and gives a review process with a written outcome. It belongs alongside your code of conduct, which can state the principle in a paragraph and point here for the detail.
Conflicts in recruiting and staffing
Talent acquisition has more conflict risk than most functions, and most generic templates ignore it. The common ones:
- Interviewing people you know. A hiring manager who scores a former teammate a 5 on every competency undermines the whole structured process. Ask panelists to declare connections when the interview plan is set and swap in another interviewer.
- Referral bonuses for relatives. Decide in advance whether referring a family member earns a bonus; many companies allow the referral but not the bonus when the referrer is in the reporting line. Spell it out in the employee referral policy.
- Agency relationships. A recruiting manager who steers requisitions to an agency run by a friend, or accepts event tickets during a vendor review, creates both cost and legal risk.
- Family in the reporting line. In a contact center, a team lead approving a sibling's overtime or schedule swaps is a conflict even if every decision is fair.
For a 600-person operation hiring 400 people a year, a simple rule that every interviewer confirms "no personal connection" in the scorecard catches most of this with almost no extra work.
Outside employment and the law
Second jobs are common among hourly staff, and an outside employment policy should stay narrow: competition, confidential information, company time and equipment, and scheduling. Several states, including California, Colorado and New York, protect lawful off-duty activities to varying degrees, so blanket moonlighting bans are risky. California also voids most non-compete agreements, which limits how far you can restrict outside work there; see our non-compete agreement notes.
Some organizations have extra duties. Nonprofits filing IRS Form 990 report whether they have a written conflict of interest policy and how they monitor it. Public companies must disclose whether they have adopted a code of ethics for senior financial officers under Sarbanes-Oxley. Government contractors and healthcare organizations often have their own rules. Requirements vary by state and country.
Common mistakes
- Collecting annual disclosures and never reading them.
- No review outcome given to the employee, so they do not know whether they are cleared.
- A gift rule with no dollar amount, leaving every case to judgment.
- Banning all relatives from working at the company, which shrinks your referral pool in small towns and is unnecessary if reporting lines are managed.
- Letting a manager who disclosed a relationship still sit on the hiring panel.
Frequently asked questions
What is a conflict of interest disclosure form?
A form employees use to report a situation where a personal interest could influence their work, such as an outside business, a financial stake in a vendor, or a relative in their reporting line. It records the facts, proposed safeguards and the reviewer's decision.
What are examples of conflicts of interest at work?
Owning part of a supplier, interviewing a friend or relative, supervising a family member, accepting expensive gifts from a vendor during a contract review, running a side business that competes with the employer, or using company information for a personal deal.
Can an employer prohibit outside employment?
Employers can usually restrict outside work that competes, uses confidential information or company resources, or affects job performance. Blanket bans are riskier, especially in states that protect lawful off-duty activities, and are hard to justify for hourly roles.
How often should employees complete a conflict of interest disclosure?
Whenever a potential conflict arises, plus an annual disclosure for roles with higher risk, such as leaders, purchasing, finance and recruiting. Some regulated organizations require annual disclosure from everyone.
Is it a conflict of interest to hire a relative?
Hiring a relative is not automatically a conflict, but the related employee should disclose the relationship, stay out of the hiring decision, and not supervise or approve pay or schedules for the relative after hire.