Conflicts of Interest – Implement these policies to protect the Company

There are many ways in which conflicts of interest can arise in business and commercial transactions. Companies need to be aware and protect themselves by implementing well thought out policies. Often this will include asking for annual declarations from their employees, especially senior executives about their interests in other companies, associates as well as family members. Being connected to Politically Exposed Persons could also impact the company and sometimes questions could be raised simply by association even though no actual business dealings or transactions have taken place.

Very often, a simple ACRA Bizfile check could provide information on potential business partners like vendors or customers and who is really the controlling beneficiary of these partners. Not many companies take the time to conduct a thorough due diligence with their business partners. However, seemingly unrelated companies could have potentially 2 to 3 degrees of separation to someone on the inside. Transactions with these companies could result in a non arms-length relationship of transactions with a related party that could cost the Company in terms of diverted or lost profits and potentially other legal or reputational risks.