Employee Conflict of Interest Template

Every workplace relies on trust between teams, managers, clients and the public. But what happens when someone’s personal interests make it hard to stay impartial? That’s where a conflict of interest policy comes in.

Download our employee conflict of interest policy template to help your staff understand when a situation needs to be flagged, and what steps to take when it does. It’s easy to tailor to your business, and gives your team the tools to act with transparency and integrity.

What is a conflict of interest at work?

A conflict of interest at work happens when someone’s personal, financial, or relational interests could affect the decisions they make at work. This doesn’t always mean something unethical is happening. In many cases, it’s simply a matter of being transparent so others can make fair assessments.

Conflicts can be:

• Actual – when a conflict clearly exists (e.g. someone stands to gain financially from a business decision).
• Perceived – when others might reasonably think a conflict exists, even if the employee disagrees.
• Potential – when a personal interest could one day lead to a conflict, even if it doesn’t right now.

In all cases, the safest approach is disclosure.

Examples of conflict of interest scenarios

Recognising a conflict isn’t always easy, especially when it involves grey areas. Here are some examples that might help.

• Recruitment: A hiring manager is involved in recruiting a close friend or family member.
• Procurement: An employee recommends a supplier they’ve previously worked for, or own shares in.
• Relationships at work: A team leader begins a romantic relationship with someone who reports directly to them.
• Side businesses: An employee runs a freelance business that competes with their employer’s services.
• Board memberships: A staff member serves on a board that could influence your organisation’s decisions.

Each of these situations could compromise judgement or at least make others think it might.

Why conflict of interest policies matter

In smaller teams, it might seem easier to handle sensitive matters with a quick conversation or handshake agreement. But as your business grows and your decisions affect more people, the need for consistency and transparency becomes far more important.

A conflict of interest policy is more than just a formality. It’s a safeguard for your culture, your brand and your decision-making processes.

Here’s why it matters:

• It builds trust: When employees know there’s a clear process for declaring conflicts and that they won’t be unfairly penalised for doing so, they’re more likely to speak up. This openness fosters a culture of integrity, accountability, and psychological safety.
• It supports fairness: Conflicts of interest can lead to perceptions of favouritism, bias or unfair advantage — even when no bad intent exists. A written policy ensures that everyone is held to the same standard, no matter their role or seniority.
• It protects your business: Unchecked conflicts can have serious consequences from damaged workplace relationships, to lost business opportunities and every legal action.
• It brings consistency: Without a written policy, managers may handle disclosures in very different ways. This can lead to confusion, resentment, or even legal exposure. A good policy gives everyone a shared understanding of what qualifies as a conflict, when and how to raise it and what happens next.

This takes pressure off individual leaders and ensures disclosures are handled consistently, fairly and efficiently.

What should be in a conflict of interest policy?

A well-written conflict of interest policyshould be clear, practical, and tailored to your organisation’s needs. The goal isn’t to overwhelm employees with legal jargon — it’s to make expectations easy to understand and act on.

Here’s what every good employee conflict of interest policyshould include:

1. Purpose

This short introduction explains why the policy exists. It should highlight the importance of ethical behaviour, maintaining public and internal trust, and ensuring fair decision-making. It should also state who the policy applies to — usually all employees, contractors and senior leaders.

2. Definitions

Clearly define what a conflict of interest is in your organisation’s context. You might include:

• Personal relationships
• Financial interests
• Outside employment
• Gifts or hospitality
• Board memberships or volunteer positions

Providing a few real-life conflict of interest policy examples helps employees identify issues early on.

3. Responsibilities

Outline who’s responsible for what. This makes expectations clear from day one and helps employees understand their obligations — whether they’re frontline staff, managers or executives.

4. Declaration Process

Explain how and when to declare a conflict. Include:

• A link to the declaration form (or where to find it)
• When employees should disclose (e.g. when hired, when the situation arises, during annual policy reviews)
• Who to report to (e.g. line manager, HR, compliance)

You may want to include a step-by-step guide for ease of use.

5. Assessment and Resolution

Once a disclosure is made, what happens next? Your policy should describe:

• Who reviews the conflict (typically HR or a designated ethics officer)
• What criteria are used to assess risk
• Possible resolutions (e.g. reassignment, additional oversight, exclusion from decision-making)

This step is key for managing conflicts proportionately and fairly.

6. Recordkeeping

Transparency is essential. Your policy should outline:

• How disclosures are documented and stored
• Who has access to the information
• How long records are kept

This protects both the employee and the organisation in case of audits or future questions.

7. Breach Procedures

Even with a great policy in place, issues can arise. Outline what happens if:

• Someone fails to disclose a conflict
• A conflict is mishandled or covered up
• The conflict leads to poor or unethical decision-making

Include potential consequences, who leads investigations and what rights employees have (e.g. the ability to appeal decisions, if appropriate).

Roles and responsibilities

Clarity around who does what is crucial to avoid confusion or inconsistencies. Here’s how responsibilities typically break down in larger organisations:

• Employees are expected to actively identify and report potential, perceived, or actual conflicts as soon as they arise. They should also cooperate fully in the resolution process.
• Managers or team leaders are responsible for responding to declarations appropriately. That means treating the disclosure confidentially, consulting HR or legal if needed, and taking steps to resolve any issues — such as adjusting work assignments.
• HR or compliance officers oversee the entire process. They ensure the policy is followed, assess risks objectively, maintain accurate records and advise on suitable resolutions.

By clearly outlining these roles in your conflict of interest policy, you create a process that’s both fair and functional. It also avoids placing too much pressure on one part of the organisation.

Enforcement and consequences

Even if most employees act in good faith, it’s important to outline what happens when things go wrong. This doesn’t just protect your business — it also ensures fairness.

Your policy should explain:

• What kinds of consequences may apply depending on the severity of the breach — ranging from informal conversations and additional training, to reassignment or formal disciplinary action.
• Who makes decisions in conflict investigations — typically a senior HR representative or a cross-functional panel.
• Whether there is an appeal or review processes, so employees know they have a voice if they disagree with an outcome.

This section helps demonstrate that you treat all employees consistently and fairly — whether they’re junior staff or senior leadership.

Download your free conflict of interest policy template

What’s included in the template

Use this free template so your employees can declare real, perceived or potential conflicts of interest in undertaking duties on behalf of your business.

Times at which this document may be of use include:

• Any employee who has identified a conflict between their private interests and public duties.
• Any employee engaged in a consensual personal relationship where a direct hierarchical relationship is in place.
• Any employees involved in a project (e.g. procurement and tendering etc.) considered to be high risk (e.g. based on the nature or value of the project).
• Any employees on a recruitment panel.
• Any workplace participant (e.g. employees, contractors/consultants) assessed by your business as warranting a declaration on the basis of potential, perceived or actual conflict of interest risk.

How to use it with your team

This template is a guide to write a Conflict of Interest Policy for your business. This policy can be uploaded into Employment Hero for your employees to acknowledge and reference. Alternatively, you could distribute the policy via email. Look out for the highlighted yellow text that will need to be replaced with your business details.

FAQs

What’s the difference between a policy and a declaration?

A conflict of interest policy is the written framework that lays out your business’s rules, expectations and procedures when identifying and managing conflicts. It explains what counts as a conflict, how to disclose one and what steps your business needs to take. A conflict of declaration, however, is an actual form or statement that an employee may fill out to report a real, perceived or potential conflict.

Can this be used in the UK?

Yes. A conflict of interest policy template, like this one, can be used in the UK and is suitable for UK businesses. It aligns with standard HR and legal expectations across sectors and can be customised to meet your needs.

How often should the policy be reviewed?

Your conflict of interest policy should be reviewed at least once every 12 months, as a general rule. But you should also consider reviewing it after any major organisational change happens, if a serious conflict arises or when relevant law or regulations are updated.

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Expert HR Advisory from Employment Hero

Ensuring your policies are up to date can be challenging, especially if you’re a small business owner or a solo HR professional with a lot of other tasks on your plate. Keeping up to date with the latest compliance changes can also take precious time out of your already busy day.

Which is why UK businesses turn to Employment Hero’s HR Advisory service. Access expert employment advice and representation, from compliance checks to workplace consulting, representation in claims and more; we’ve got you covered. Get in touch with our experts today.