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It isn't possible in a general conflict of interest policy to define all the various circumstances and relationships that would be considered "unethical." However, when writing your conflict of interest policy, you should focus on the types of activity that would reflect in a negative way on the employee's personal integrity or that would limit his or her ability to discharge job duties and responsibilities in an ethical manner.
Exactly what constitutes a conflict of interest or an unethical business practice is both a moral and a legal question. The company recognizes and respects the individual employee's right to engage in activities outside of his or her employment that are private in nature and do not in any way conflict with or reflect poorly on the company. Management reserves the right, however, to determine when an employee's activities represent a conflict with the company's interests and to take whatever action is necessary to resolve the situation—including terminating the employee.
See an Example of a Conflict of Interest Policy
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The HR Library has more helpful conflict of interest policy resources like these:
Sample Conflict of Interest Policy
Code of Conduct Policy
Fraternization Policy