Probity in practice: Understanding and managing conflicts of interest
Published on 23 April 2026
Article by Sonali Cordeiro, Senior Advisor and Michael Byrne, Principal Advisor – Probity and Assurance Office
Conflicts of interest are not rare exceptions in public sector procurement - they are an everyday reality. Whether you’re managing a tender, sitting on an evaluation panel, or overseeing a contract, the possibility that personal interests could intersect with professional duties is always present. What matters is not the mere existence of a conflict, but how it is identified, disclosed, and managed.
At its core, probity is about integrity, fairness, and transparency in decision-making. It ensures that procurement processes withstand scrutiny and that public confidence is maintained. Conflicts of interest sit at the heart of this, because even the perception of bias can undermine trust.
All public sector organisations (local and state) have an obligation to demonstrate and document good governance in order to protect the integrity and credibility of the council or State Agency and to maintain the trust and confidence of suppliers and the public.
Managing conflicts of interest should be part of all public sector organisations’ commitment to enterprise risk management.
What is a conflict of interest?
A conflict of interest arises when your public duties are influenced, or could reasonably be perceived to be influenced, by your private interests. These interests can be financial or non-financial and may involve family, friends, professional networks, or prior associations.
Importantly, conflicts are not limited to actual bias. They fall into three key categories:
- Actual conflict – where a direct conflict exists between duties as a government employee and private interests.
- Perceived conflict – where a reasonable person might think your decision is compromised or influenced by your private interests, whether or not this is in fact the case.
- Potential conflict – where a conflict could arise where your future decision making may be influenced by your private interests.
Understanding this distinction is critical. In many cases, perceived conflicts can be just as damaging as actual ones because they erode public trust.
A conflict of interest may be potential, perceived or actual and the risk of having a conflict will increase where an employee’s role includes the authority to make decisions.
Performing the reasonableness test is not always straight forward and it is possible for two people to disagree whether a conflict of interest exists. Conflict of Interest is probably the most misunderstood and obscure, unclear of all probity issues because aside from honesty, conflict of interest becomes such a personal moral issue.
Why probity matters
Councils and public sector organisations have a responsibility to demonstrate good governance. Managing conflicts of interest is central to maintaining integrity and credibility.
- Failure to appropriately manage conflicts can lead to:
- Challenges to procurement decisions
- Reputational damage
- Loss of supplier confidence
- Legal and audit risks
Conversely, strong conflict management reinforces fairness, supports defensible decision-making, and aligns with legislative obligations.
Spotting the red flags
Identifying a conflict of interest isn’t always straightforward. A helpful way to approach this is to ask yourself:
- Do I have any personal or private interests that could conflict with my role?
- Could I benefit, now or in the future, from this decision?
- How would this look to an independent observer?
- Would I be comfortable if this situation was publicly disclosed?
- Does my involvement in the decision appear fair and reasonable in all circumstances?
- What are the consequences if I ignore a conflict of interest?
Scenario 1: The familiar supplier
Jacinta has recently been appointed to business manager at Fictional Shire Council. In her role she manages several contracts including the Cleaning Contract which is due to expire.
Jacinta was unaware until she started this new position that the father of her daughter’s long-term partner Joshua owns the cleaning company currently providing the cleaning services to Fictional Shire Council.
Jacinta has been asked to go out to tender for the Cleaning Contract and is aware there have been several complaints about cleanliness across council facilities.
Jacinta is confident she can remain impartial and objective in both managing the contract and decision making regarding the future Cleaning Contract.
What do you think Jacinta should do? (Tip: Answer is at the end of this article)
Scenario 2: The industry insider
Tom is a contracts manager developing a telecommunications tender. Until two years ago he worked as a consultant locally and interstate across the telecommunications industry in a specialised area particularly relevant to this tender.
He hasn’t really stayed connected with former colleagues, but suspects given the specialized area that many of them will still be in the business. He has been asked to sit on the evaluation panel.
What do you think Tom should do? (Tip: Answer is at the end of this article)
Managing conflicts effectively
Common strategies include:
- Registering the conflict - Conflict of interest are formally declared and registered.
- Restricting involvement - Restrictions are placed on the conflicted person’s involvement in the procurement process or contract management.
- Engaging independent oversight - Where an independent third party (e.g. Probity Advisor) is used to oversee part or all of the procurement process.
- Removing the individual - Where the conflicted person chooses or is requested to be removed completely from the procurement or contract management process.
- Relinquishing the private interest - Where the person relinquishes the private interest that is creating the conflict.
- Resign - Where the person resigns from their position that is creating the conflict (usually last resort).
Final thought
Conflicts of interest are not a sign of wrongdoing – they are a sign of complexity. What is important is how the conflict is managed. The goal is not to eliminate them, but to manage them with integrity. Managing conflicts of interest is everyone’s responsibility. If you are unsure – declare it!
Scenario 1 answer:
Jacinta should declare the relationship as soon as it is identified, to ensure transparency and accountability. Management strategies may include:
- Limiting involvement – limit Jacinta’s access to tender documentation and evaluation information.
- Jacinta should be removed from the decision-making processes including extension of any existing contracts.
- Removing her from the process – Jacinta is replaced by another staff member to manage the current Cleaning Contract and not be involved in the procurement process.
- Appointing independent oversight – appoint an independent Probity Advisor to oversee tendering process and manage Jacinta’s involvement in the process.
Scenario 2 answer:
Although Tom hasn’t worked in the industry for two years and hasn’t stayed connected to former colleagues in the telecommunication industry. He may be perceived to still have friends in the business and to hold opinions as to the capability and capacity of staff and/or companies he previously worked with.
Tom should declare his prior relationships and consider restricting his role in the tender evaluation process.
If Tom’s role cannot be restricted due to the availability of other staff, consider appointing an independent Probity Advisor to oversee tendering process.
For more information on Probity and Assurance contact Martin Dunn, Manager Advisory - Consulting Services mdunn@peakservices.com.au