Conflicts of Interest: US

This Conflicts of Interest policy helps your organization set clear expectations for avoiding, disclosing, and addressing situations where an employee's personal interests could compromise (or appear to compromise) objective business decisions, and it supports broader compliance and ethics obligations under federal rules like the Sarbanes-Oxley Act of 2002 and, for certain federal contractors, the Federal Acquisition Regulation (FAR). A well-written policy makes it easier for employees to speak up about gifts, outside work, family relationships, and financial interests, so your team can review potential conflicts consistently and reduce the risk of favoritism, misuse of position, or ethics complaints.

The History Behind Conflicts of Interest Policies in US

Ethics & Professional Conduct policies like conflicts of interest grew up alongside modern corporate governance. Early US conflict rules came from the fiduciary duty playbook, where courts expected officers and directors to put the organization first and to disclose self-dealing. Employment policies followed the same logic once businesses got bigger, purchasing got more complex, and employees had more discretion over vendors, pricing, and hiring. Employers started writing conflicts rules in plain language because "everyone knows what's wrong" stopped working the minute gifts, side businesses, and family ties showed up in a procurement file.

Federal enforcement pushed conflicts of interest from "good idea" to "you really want this in writing." The Foreign Corrupt Practices Act of 1977 made gifts, travel, and third-party relationships a compliance problem, not just an etiquette problem, because weak internal controls can turn a questionable favor into a serious issue. After the early-2000s accounting scandals, Sarbanes-Oxley doubled down on the same theme for public companies and their contractors by protecting whistleblowers and pressuring employers to create channels for disclosure and investigation. Many organizations responded by formalizing disclosure, review, and guidelines around outside work, vendor relationships, and financial interests.

Government contracting added another set of expectations through the Federal Acquisition Regulation (FAR), which includes conflicts screening in the way many federal projects run. Contractors saw that an undisclosed relationship can trigger bid protests, disqualification, repayment demands, or a long audit trail that nobody enjoys. Private industry copied the same controls because supply chains globalized and procurement teams got leaner, which meant fewer eyes on higher-stakes decisions. A conflicts policy became the practical tool for catching problems early, before they show up as a hotline complaint, an SEC inquiry, or a contract dispute.

Which Law is the Conflicts of Interest Policy Meant to Comply With?

If you create and distribute a Conflicts of Interest Policy for your US-based employees, be sure it complies with the US's Sarbanes-Oxley Act of 2002 (SOX) and the Federal Acquisition Regulation (FAR) (if you're a federal contractor or subcontractor).

How to Write a US-Specific Conflicts of Interest Policy

• Start with "why" and introduce the concept, protecting fair and ethical decision-making by avoiding conflicts of interest.
• Define conflicts of interest as actual or perceived situations where personal interests (including family members' interests) could compromise objective business judgment.
• State the core expectation that employees must avoid conflicts between their personal interests and your organization's interests.
• Include a short, non-exhaustive set of common conflict examples (gifts, outside work that overlaps or competes, personal relationships in reporting lines, using position for outside perks, outside financial or governance interests tied to your organization's funding or partnerships).
• Require employees to disclose actual or potential conflicts in writing so your organization can evaluate and address them.
• Explain that your organization will review disclosures and either approve with conditions or require steps to resolve the conflict.

When to Include this Policy in Your Employee Handbook

The law does not require you to publish a policy or issue a specific notice. That said, you still have to comply with the requirements that apply to you as an employer. 

This is a "depends on your workplace" policy. Include it if you offer the benefit, operate in a setting where this comes up, have a state-specific rule that differs from your national approach, or you've had issues in this area before. If you already have a clear all-employee policy that covers the same ground (for example, maybe you cover everything you need to cover in your Code of Conduct policy), you may not need a separate policy here. 

Other Considerations

None.

Exceptions

None.