Conflict of Interest
Categories: Incorporation, Ethics/Morals, Trusts and Estates
A conflict of interest is a tricky ethical situation in which an individual, employee, or a corporate entity has a vested interest in something that makes their vote or input unreliable.
Example
Cosmetics tycoon and board member Mabel Doughy votes in favor of granting a multi-year contract to Sticky Lipsticks, a major lipstick manufacturing company. The problem? Her son, Hughie Doughy, is CEO of Sticky Lipsticks. Her vote lets Sticky Lipsticks gain an advantage because Mabel is a board member. Not fair, which is why Mabel needs to disclose her association with Hughie and abstain from voting on this issue.