Conflicts of interest have far-reaching consequences for any organization. Left undisclosed, they can erode value and damage credibility for years. A 2024 U.S. government audit found that conflicts in mutual fund compensation led to lower long-term returns, draining billions from retirement accounts.
The risk is not limited to markets. In 2025, Atlanta’s Chief Administrative Officer was accused of profiting from a company selling surveillance tools to the police. The subsequent ethics probe triggered public backlash and forced city leadership to fight to restore legitimacy.
As a result, boards that fail to obtain timely disclosures risk undermining governance itself and losing public trust.
This article explains what a disclosure conflict of interest is, why it matters, and how boards can manage it effectively. You’ll also find a practical template to keep disclosures consistent, transparent, and audit-ready.
What is a conflict of interest disclosure?
A conflict of interest disclosure is a formal statement provided when a board member, official, or key employee has personal, professional, or financial interests that may—or may appear to—impair their judgment. Its purpose is to ensure decisions benefit the organization rather than individual interests.
Most organizations require an annual conflict of interest disclosure, typically reviewed at the first board meeting of the year. A yearly cycle alone isn’t sufficient, however. New directors should disclose their information upon joining. Boards should require updated forms before major transactions, and policies should mandate immediate notification if a conflict arises mid-cycle.
Who needs to disclose?
Board members are expected to complete a conflict of interest disclosure statement, but the same expectation extends to senior officers with contracting authority and other staff in sensitive roles.
Nonprofit boards also rely on a conflict of interest disclosure form for board members, often included in both onboarding and annual governance reviews.
Below is a non-exhaustive list of corporate roles that should report conflicts:
- Directors and trustees. Disclose any personal or financial interests that could influence board decisions.
- Board chair and vice chair. Transparency is essential given their role in setting agendas and guiding discussions.
- Committee chairs and members. Especially on audit, compensation, or governance committees, where oversight could be compromised.
- CEO. Discloses to avoid overlap between personal interests and corporate strategy.
- CFO. Reports ties to vendors, lenders, or investments that affect financial integrity.
- Senior officers (COO, CIO, etc.). Declare interests that could bias operational or strategic decisions.
- Key employees with authority. Staff in procurement, funding, or compliance roles should disclose relevant ties.
Why conflict of interest disclosure management matters
One overlooked conflict can trigger lawsuits, regulatory fines, or reputational harm that takes years to repair. For example, in 2024, San Francisco’s city auditor flagged serious gaps in conflict tracking, issuing 14 recommendations to tighten oversight. The message to boards is clear: if internal disclosure systems fail, external scrutiny will follow.
Strong conflict of interest disclosure management also protects board independence. Directors owe a fiduciary duty—acting in the organization’s best interest even when personal interests tempt otherwise.
As governance experts put it, the duty of loyalty is simple: avoid conflicts where possible and disclose them when they arise. A clear conflict of interest disclosure policy signals that the board takes this duty seriously.
- Additional read: Explore more board member responsibilities.
Sector-specific pressures amplify the need for rigor. Federal PHS regulations require disclosure of any financial conflict of interest before research funding is approved.
Nonprofits face similar expectations: the 2024 Guide to Not-for-Profit Governance urges every board to use a formal conflict of interest disclosure form for nonprofits—not only because auditors require it, but to assure donors that funds are used responsibly.
What types of conflicts should be disclosed?
Conflicts take different forms, but the principle is consistent: any relationship, responsibility, or interest that could bias a decision must be declared.
A well-structured disclosure form should identify both actual and potential conflicts that could affect a director’s decisions.
Boards should address at least the following categories:
- Financial interests in vendors or partners. Ownership of shares or stakes in companies that do business with the organization—even if small—should be reported to avoid questions of bias.
- Family relationships with employees or contractors. Relatives in roles that you oversee, or connected to vendors, can raise fairness concerns and must be disclosed.
- Outside activities and commitments. Consulting, employment, speaking engagements, or leadership positions in other entities may compete for time or create conflicting obligations.
- Board roles in other organizations. Serving on another board—particularly for nonprofits or firms applying for contracts or funding from your organization—can present overlapping interests.
- Intellectual property rights. Ownership of patents, licenses, or proprietary technology that could benefit from board decisions should be declared to prevent conflicts in innovation or procurement discussions.
Many boards fold these categories into their Directors & Officers (D&O) Questionnaire, giving administrators a single record of disclosures. This integration helps boards avoid duplication, simplifies reporting, and maintains an audit-ready overview of potential risks.
What should be included in a conflict disclosure form?
A disclosure form protects the board only if it captures the right information. Effective conflict of interest disclosure forms include:
- Financial interests in vendors. Declare any ownership in companies that contract with or supply the organization. It should specify the entity name, ownership percentage, and nature of the relationship (current, prospective, competitor).
- Family relationships. Disclose any family member employed by or connected to the organization or its partners, with role and reporting-line clarity.
- Outside business roles. List other board seats, consulting roles, advisory posts, or employment that could overlap.
- Gift policies. Report gifts, hospitality, or sponsored travel from potential vendors or partners, noting value, date, and source.
- “No conflict to declare” checkbox. Confirm explicitly when no conflicts exist to avoid ambiguity.
- Signature and certification. Sign to verify accuracy and acknowledge the duty to update if circumstances change.
Best practices for managing the disclosure process
To manage the disclosure of conflicts of interest effectively, boards should follow several core practices:
- Collect disclosures at the right times
Most boards require annual submissions, but timing should also cover onboarding, major transactions (e.g., M&A or funding rounds), and emerging conflicts during the year. Universities and similar institutions often align disclosure cycles with academic or fiscal calendars to match operational realities. - Store and track records securely
Paper forms and spreadsheets are prone to loss and error. A digital governance platform like Ideals Board provides secure storage, version control, and audit-ready reporting, ensuring disclosure requirements are met consistently. - Act on disclosed information
Conflicts should be noted in the minutes, recusals documented, and sensitive cases referred to a compliance function or committee to prevent any appearance of bias in decisions. - Differentiate between “no conflict” and “conflict exists”
Always include a “no conflict” checkbox to confirm that each director has considered the question. When a conflict is disclosed, the board should evaluate its nature and potential impact, then determine the appropriate action (e.g., recusal, information barriers, or disclosure to stakeholders). - Provide training and awareness
Ensure directors receive regular training so policies are fully understood and applied. Use real case studies from corporations, nonprofits, and public institutions to illustrate how outside activities, secondary income, or overlapping commitments can compromise independence and ethical conduct.
Related resources:
- conflict of interest disclosure template (download)
- board meeting agenda template for consistent governance cycles
- Guidance on writing the board meeting agenda to align disclosures with decision points
Download a ready-to-use conflict disclosure template
A reliable disclosure form reduces the risk of incomplete reporting, minimizes perceptions of bias, and creates a record that stands up to review or approval. Standardization ensures every director has the same understanding of what must be reported.
Managing disclosures is easier when the right tools are in place. To support your board, we’ve created a conflict of interest disclosure template that’s practical, compliant, and ready to use.
What’s included
Inside the ZIP file, you’ll find:
- An editable Word document (.docx) for tailoring disclosures to your policies.
- An example-filled version to illustrate how a disclosure should look in practice.
- A shareable PDF for directors and officers, ensuring clarity and consistency across the board.
Next step
Download the template directly from this page and use it alongside other governance resources—such as guidance on the writing board meeting agenda—to keep policies consistent and easy to follow.
For corporate, nonprofit, and higher-education boards, it’s a practical tool that supports consistent disclosure planning and better board performance.
- Additional resource: board meeting agenda template for easy meeting setup.
When combined with Ideals Board, you also gain the ability to manage disclosures digitally.
Conclusion
Conflicts of interest are inevitable, but unmanaged conflicts expose boards to legal and reputational risk. Transparent conflict of interest disclosure practices are the strongest protection, helping directors demonstrate independence and safeguard organizational integrity.
With Ideals Board, you can automate disclosures, centralize governance tasks, and maintain audit-ready records that give directors confidence in every decision.
- Contact a sales representative today to see how your board can manage conflicts efficiently and transparently.