A person who faces a conflict of interest may not be able to avoid the conflict. In such an instance, the person may be required to take certain steps by law or may need to follow certain practices in order to avoid any appearance of impropriety. The following are some of the means by which conflicts of interest may be handled, either by law or as good professional practice:
- Duty of Loyalty: In partnership law, for example, a partner is bound by a duty of loyalty, which forbids the partner from personally engaging in a business transaction to the detriment of the partnership.
- Fairness: Some laws, such as those governing conflicts of interest within corporations, require that transactions involving such conflicts are fair.
- Full Disclosure: Many professionals, such as lawyers and government officials, are required by law to give full, written disclosure of any conflicts of interest.
- Recusal: Decision-makers, such as judges or members of government agencies, may choose to recuse themselves in situations where the subject of a decision involves a conflict of interest.
- Third-Party Evaluations: In some situations, such as where majority shareholders in a corporation decide to buy out minority shareholders, a neutral third party may be used to determine a fair market price for the minority shares.