Question

Conflicts of interest arise when employees have a private interest in the outcome of a task in which they are engaged in that is possibly antagonistic to the firm's interests and substantial enough that it might affect the employee's independent judgment on the firm's behalf.

Answer 1

Answer:

True

Explanation:

Conflict of interests refers to the conflict between organizational interests and personal interests of an individual.

For example, a director has the authority to sanction a project investment with another company. The director knows that such a project if entered into, is not beneficial for the company but since the directors own relative is a director of the other company, such an alliance would personally benefit him.

In such a case, the director is experiencing conflict of interest and during the meeting of the board, he must disclose his personal interest in such a project.

A conflict of interest impairs an individuals judgement and objectivity.