Ethics in the grey zone: governing conflicts of interest with courage

IN GOVERNANCE, few terms provoke as much unease as “conflict of interest".

- NQOBANI MZIZI

It conjures images of overt corruption, self-dealing and backroom deals. Yet in many boardrooms, the more dangerous form is covert and subtle. It emerges not through criminality but convenience, not through lawbreaking but ethical lapses that thrive in silence and passivity. These are the conflicts that live in the grey zone.

We often associate conflicts of interest with clear-cut wrongdoing: a director awarding a tender to their own company, a regulator sitting on a board they're meant to oversee. But many conflicts are more nuanced.

They live in assumptions we don't question, relationships we don't declare, and benefits we don't probe. Often, they hide in plain sight: in annual declaration forms submitted as routine or meeting registers listing interests without discussion or followup.

These processes, meant to enable transparency, become hollow rituals without meaningful engagement and ethical reflection.

Grey-zone conflicts are not always compliance failures; they are ethical blind spots where governance falters under silence, ambiguity, or convenience. They are technically compliant but ethically compromised.

They flourish where disclosure is absent, recusal is performative, and boards look the other way, not because they condone wrongdoing, but because they've normalised ambiguity. It is here, in the comfort of procedure without principle, that governance erodes.

King IV recognises this risk. South African law requires declaration of personal financial interests and sets fiduciary duties, but King IV Principles 1 and 5 go further, calling for ethical and effective leadership beyond legal minimalism.

A director may comply with the law but betray governance’ spirit by failing to disclose a relationship or by participating in decisions blurred by personal gain.