Consider the following scenarios:

Scenario 1: A new potential client calls to ask you to come in for an interview for a significant project. You are currently providing similar services to another company that is their direct competition. You believe that the new potential client does not know about this, and you suspect that if they knew, they might not hire you. You tell yourself:

“Since our work is confidential, it is unlikely that either side will ever know. Besides, working for competing companies is standard practice in the market today.”

Should you go to the interview?

Scenario 2: You work for a small company and are responsible for procuring construction services. You recently received bids from several contractors and are reviewing their numbers. Among the bidders is a company whose president is a professional acquaintance, and his bid is slightly above the lowest bidder. You had been hoping to build a relationship with this person because you feel that it would be good for your career, and you have even been considering approaching this person about a job. You tell yourself:

“I know that they will do good work. Plus, their bid wasn’t that much higher anyway.”

No one will question your decision. Who should you hire?

Scenario 3: You specialize in working on large corporate headquarters projects, and you recently received a request for proposal from a major company who manufactures a product that you believe is detrimental to the public’s health. This project is right up your alley, though, and would supply enough fees to meet your revenue targets, and perhaps even allow you to add new staff. You have been teaching your children about the dangers of this company’s product, but this is an enormous opportunity. You tell yourself:

“Who am I to judge what my clients do? I need this project, and, besides, if I don’t take this job, someone else will.”

Do you answer the proposal?

You may have found some of these scenarios to be familiar, or perhaps you have struggled with similar dilemmas. Chances are, though, that you have been exposed to the common factor that all these scenarios share: They pose conflicts of interest. The first is a professional conflict, the second is a personal conflict, and the third is a moral conflict.

A conflict of interest can be defined as the following:

A situation in which someone in a position of trust has competing professional or personal interests. Such competing interests can make it difficult to fulfill his or her duties impartially.

In this post-Enron, Sarbanes-Oxley era, most companies have implemented codes of ethics that address such conflicts of interest and spell out appropriate responses to specific conflicts, along with repercussions for failure to comply—ranging from reprimand to termination and criminal investigation. This has raised the awareness of these issues and has increased due diligence to make sure that such conflicts are avoided.

I’ve looked at several “conflict of interest” policies in preparation for these remarks and have found that many of the conflicts of interest discussed are obviously immoral, unethical, or illegal. Does a politician really need to be told that it’s wrong to receive personal gifts from lobbyists? Does a lawyer really need to be told that it’s wrong to represent a party with interests adverse to those of a current client? Does a businessperson really need to be told that it’s wrong to share company secrets for personal gain or to hire an unqualified friend or family member? Other examples, though, like the ones I gave at the beginning, may not have such obvious answers. So what do we do when such unclear conflicts arise?

The typical responses to conflicts of interest usually involve one of the following three actions:

1. Removal

2. Recusal

3. Disclosure

You can simply remove the conflict by setting up a mechanism in which the conflict no longer exists, you can excuse yourself from participating in the conflict, or you can openly disclose the conflict and let the involved parties decide how to proceed. All these actions have one crucial element in common: They all begin with the recognition that a conflict exists and that it must be addressed honestly and openly. They also begin with the desire to be honest and to tell the truth about the conflict of interest.

But why do we need to be told to be honest? Why is honesty often so difficult? In the preceding examples, honesty seems to be at odds with financial success. If the first person discloses that he is working for the competitor, he may not win the job. If the second person gives the job to the low bidder (or excuses himself or herself from the decision), he or she may miss the opportunity to advance his or her career. If the third person turns down the job for moral reasons, he or she may have to reduce staff or miss making the revenue target. Honesty seems to be at war with winning and success. It’s like the cartoon image of the man with an angel on one shoulder and a devil on the other, each whispering in his ear. In this cartoon, the man ultimately kicks the angel to the curb because the other voice offers more tangible reward and satisfaction.

Is this a real model, though? Are honesty and success actually at odds? Consider any people whom you respect and trust, whether in your personal or business life. Undoubtedly, the significant characteristic of these people is honesty. You trust and respect them because you know that you can rely on them to tell you the truth. We have all read of “flashes-in-the-pan”—those who made quick fortunes but were soon discovered to have cut corners, made back-room deals, or to have cheated outright. These people quickly fade because their credibility is undermined by their unscrupulous actions. People who consistently and clearly tell the truth, however, build trust, which results in a good reputation, which begets new and repeat clients, which increases business, which accumulates success and wealth.

Spiritual teachings recognize this mechanism: that honesty ultimately leads to success. The Book of Proverbs, the collection of wisdom teachings about living a good life, states:

Truthful lips endure forever, but a lying tongue lasts only a moment...The hand of the diligent will rule, but deceit will melt.

A lie may bring short-term results, but it is only through the commitment to truth that long-term success is built. This spiritual teaching directly links honesty to success and provides the simple answer to conflicts of interest: Tell the truth. It may mean turning away the immediate financial reward, but it will keep you out of trouble, and, practiced with diligence, honest disclosure will actually lead to future prosperity.

The question remains: Why be tempted to engage in conflicts of interest? Why not simply tell the truth? As the scenarios at the beginning pointed out, the truth may not always be readily apparent. We can all too easily play mind games; convince ourselves that there is no conflict, that it’s okay to follow a path that we suspect may not be honest. “Everyone else does it,” we may think, or maybe we’ll convince ourselves that it’s not really all that bad. The conflict of interest is essentially between honesty and deceit. Here, we find that the commitment to truth must start with the courage to deeply examine our motives and ask ourselves if we are being, first and foremost, honest to ourselves. This requires the strength to look squarely at the answer, face our own inclination to deny or distort our intentions, and the confidence to know that honesty is indeed the best policy.

Confucius, in his usual pithy, wise, and brief manner, sharply sums up this subject by noting:

The object of the superior person is truth.