What is meant by "conflicts of interest" in business ethics?

Conflicts of interest in business ethics refer to situations where an individual's personal interests interfere with their obligations to their organization. This interference can create a scenario where personal gain may compromise the integrity of decisions made in a professional context, making it difficult for individuals to act in the best interests of their employer or other stakeholders.

For instance, if an employee stands to gain financially from a decision they make at work—such as favoring a vendor in exchange for kickbacks—there is a clear conflict between their duties to act in the best interests of the company and their own personal financial interests. It's this tension that defines a conflict of interest, emphasizing the need for transparency and ethical standards to manage such situations properly.

In contrast, situations in which personal interests align with company goals do not constitute conflicts of interest, as there is no interference between the two. Additionally, achieving company goals regardless of personal interests in itself does not address the ethical considerations surrounding the balance of obligations and personal benefit. Full transparency can help to mitigate conflicts, but it does not eliminate them when personal interests pose a challenge to responsible decision-making.