Policy for Conflict of Interest

What is a conflict of interest policy?

A policy for conflict of interest is an internal corporate document that establishes a clear legal framework for reporting, handling and managing conflicts of interest at the workplace. Once implemented, the policy becomes a mandatory list of guidelines that part-time, full-time and casual employees working within the organisation must follow on a daily basis.

Solid and well-written conflict of interest policy templates help to mitigate employees’ transparency issues and prevent reputation or financial risks for the company, as well as strengthen overall corporate governance within the organisation. This template is being used widely by Australian businesses, SMEs, startups, charities, and other for-profit organisations.

This document is being used in conjunction with the Employee Handbook and Company Whistleblower Policy.

Key Benefits of the Company Conflict of Interest Policy Template

By customising this policy with FasterDraft, you get the policy with the following benefits:

• a document that is available for an affordable price and saves you lots of time and costs;
• a policy that is ready for immediate implementation in your company;
• a document that fully aligns with best Australian business practices;
• a template that complies with the Fair Work Act 2009 and the Corporations Act 2001;
• a document that is created by real legal professionals and never by AI;
• a template that can be customised for businesses of various types or charities operating in Australia.

What should be included in the policy for conflict of interest?

A standard conflict of interest policy must include three core elements:

Definition of Conflict of Interest

Before outlining the measures and procedures on handling the conflict of interest, it is important to make sure that both the employer and the employee understand what a conflict of interest actually means.

Thus, the text of the policy should provide a clear definition along with the most common examples of workplace situations where conflicts may arise. There is a common misconception that a conflict of interest is only relate to money or other financial gains. The policy should emphasise that the conflict of interest does not necessarily involv direct financial benefits.

Employee Disclosure Duties

The policy must outline the list of the employee duties in relation to the policy, including the following:

• comply with all provisions of this policy;
• promptly and immediately report about any potential, actual or perceived conflicts;
• take a proactive approach by reporting the conflict of interest of other employees, etc.

Reporting and Management

Every company conflict of interest policy template must provide the detailed plan of actions the employee shall follow to report the conflict of interest, including:

• full name and job title of a person to whom the reporting should be made;
• means of communication; and
• timeline.

Apart from that, the policy shall explain what will happen after the report is made and how the process is handled in general.

Examples of Usage of Conflict of Interest Policies in Australia

A conflict of interest is not an abstract thing. Thousands of businesses operating in Australia regularly face situations when personal decisions interfere with working duties. Below are the three most typical scenarios that may arise and compromise the company’s integrity.

Hiring Relatives or Family Members

It is common for many organisations to employ family members or relatives. While there is no law that can limit hiring family members or relatives, such relationships may affect an employee’s ability to perform their job duties properly.

For example, let’s imagine a situation where David and Olivia are a married couple working within the same organisation. Olivia is a compliance manager, and David is an accountant. During a regular compliance check, Olivia discovers that David does not follow internal procedures related to onboarding new clients properly. As a compliance manager, Olivia has to report the breach, but she may feel conflicted about putting her husband’s job at risk.

A solid conflict of interest policy template Australia can address such a situation by limiting the appointment of family members or relatives in roles involving direct supervision of one another.

Using Confidential Information

In certain cases employees may use the employer’s confidential information to profit personally.

For example, Mark, who works as an accountant, has unlimited access to the company’s recent financial reports, giving him additional leverage when advising third parties either to invest in the company’s shares or not.

A comprehensive conflict of interest policy template should explicitly prohibit the employee’s trading, sharing or transferring the company’s strategic financial or accounting information to a third party for or without compensation.

Accepting the Gifts

While on duty some employees may closely interact with the employer’s customers, clients, contractors or suppliers. Sometimes third parties may provide the company’s employees with unsolicited gifts or compensation in favour of getting some decisions, guarantees or outcomes. This risk is particularly relevant for employees with decision-making roles.

For example, Victoria is in charge of the company’s tender process. After their unsuccessful bid, a supplier sends Victoria a very expensive gift on the occasion of her birthday. Although Victoria may feel no obligation to reciprocate, the situation creates a perceived conflict of interest.

To avoid situations like that, the solid sample conflict of interest policy template shall limit acceptance by the employees of any gifts from the employer’s direct contractors, clients, or customers.

How to customise a conflicts of interest policy with FasterDraft?

To get a fully customisable policy template, follow a few easy steps below:

1. Click the “Create Document” button.
2. Answer simple questions in the form.
3. Select a template’s format – conflict of interest policy template PDF or Word.
4. Make a payment.

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