Numerous cases of disputes arising from conflicts of interest involving employees make it essential for companies to strengthen and improve their compliance management in this area.

Conflicting interests in employment mainly refer to conflict between an employee’s personal interests and his or her job duties or position, where such conflict directly or indirectly causes harm to the company’s interests, or puts them at risk. Such conflicts can manifest in various forms.

This article provides operational recommendations for companies in managing and resolving conflicts of interest, with particular focus on conflicts of interest arising when an employee or their relatives hold shares or positions in a competitor or business partner, such as a company supplier or customer.

ESTABLISHING A SYSTEM

Building a management system is the first line of defence in effectively controlling conflicts of interest.

Companies can establish agreements related to conflicts of interest in labour contracts and other relevant agreements. Alternatively, they can formulate a separate conflict of interest system or provide a specific chapter on conflicts of interest in their rules and regulations.

However, given that a company’s chance of success in such dispute cases will pivot around the degree of clarity and detail of conflicts of interest management requirements set in advance, the authors recommend that companies provide detailed provisions in their regulations, in addition to principle-based or...

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