By Fatima Rawat, The Ethics Institute

Corruption starts long before money changes hands. By the time a bribe is paid, a contract is manipulated or public money disappears, the real damage has often already been done. It begins much earlier—in relationships that influence judgement, loyalties that compromise impartiality, and conflicts of interest that remain undisclosed.

The testimony of World Bank anti-corruption specialist Dr Albertus Schoeman highlighted weaknesses in the public service’s financial disclosure system. Officials can comply with disclosure requirements while relationships capable of influencing their judgement remain hidden. Disclosure forms ask only limited questions, oversight is fragmented, and verification mechanisms have not been applied consistently.

The Madlanga Commission is revealing something even more significant than weaknesses in disclosure. With every sitting, it exposes a truth that organisations often overlook: corruption usually starts long before money changes hands.

At its heart, the Commission is a story about conflicts of interest. It reminds organisations that conflict of interest is not simply a compliance exercise. It is an ethics risk that requires active governance.

There is often a misunderstanding about what a conflict of interest is.

This misunderstanding came into sharp focus during the testimony of Gareth Mnisi, Chief Financial Officer of the City of Tshwane. Justice Madlanga questioned why he had not disclosed his close relationship with an individual connected to a bidder appearing before the Bid Adjudication Committee that he chaired. Mnisi maintained that because he had no financial interest and received no personal benefit, there was no conflict of interest. The exchange illustrated a common misconception—that only financial interests create conflicts of interest.

The Ethics Institute’s Conflict of Interest Handbook defines a conflict of interest as a situation where an individual’s official responsibilities compete with their private interests.

Those interests include not only financial interests, but also family relationships, friendships, outside employment, political affiliations, previous professional associations and personal loyalties. Non-financial interests can influence judgement just as powerfully as financial ones.

Having a conflict of interest does not in itself make someone unethical or corrupt. For many, conflicts of interest are a normal part of organisational life. People have families, friendships, professional networks and interests outside the workplace. These relationships are normal and, in most cases, entirely legitimate.

A manager on a recruitment panel may know a shortlisted candidate. A procurement official may have a social relationship with a supplier. Neither situation is necessarily improper. What matters is that the relationship is disclosed, that appropriate safeguards are put in place, and that the individual recuses themselves where necessary. Transparency protects both the individual and the integrity of the organisation’s decisions.

From the evidence before the Commission, it seems that the relationships in question are neither normal nor legitimate. In many cases, the relationships seem to have been entered into specifically for corrupt purposes. This also affects how conflicts of interest are managed.

An ethical person who is conflicted recognises that their private interests may affect, or be perceived to affect, their judgement. They disclose the conflict, seek guidance where necessary, withdraw from decisions when appropriate, and allow independent oversight to protect both themselves and the organisation.

A corrupt person, however, intentionally conceals or exploits a conflict of interest for their own, or someone else’s gain. Transparency is replaced by concealment, and objective decision-making gives way to personal advantage. This distinction is important and often missed.

The real danger arises when organisations rely almost entirely on annual declarations of financial interests. Too often, once the forms have been completed, everyone assumes the risk has been managed. As we have seen at the Commission, financial disclosures rarely reveal friendships, reciprocal loyalties, informal influence or personal networks.

Effective conflict of interest management is about far more than collecting disclosure forms. Its purpose is not to identify dishonest people, but to ensure that honest people are not placed in situations where competing interests quietly compromise their judgement. This requires leaders who encourage disclosure, ask difficult questions and, as King V™ emphasises, recognise the governance of ethics as a leadership responsibility rather than simply a compliance function.

At its core, the Commission raises a deeper question: how were so many inappropriate relationships allowed to become normalised? That is ultimately a question of leadership and organisational culture, not merely disclosure forms.

The Commission is prompting organisations to reflect on a critical question: are we merely recording conflicts of interest, or are we actively governing them before they influence decisions? The answer to this question will say far more than the number of disclosure forms that are collected annually.

Perhaps the most important question the Commission poses to every organisation is this: If a commission were established to investigate your organisation, what story would it tell?

Would it reveal an organisation where ethics genuinely informs leadership decisions, governance processes and organisational culture, where conflicts of interest are identified and managed before they compromise decisions? Or would it find that ethics exists mainly in policies while everyday behaviour is shaped by competing loyalties, inconsistent accountability and silent compromise?

The answer to that question may reveal whether your organisation is building an ethical culture to prevent corruption, or whether today’s unmanaged conflicts of interest may become tomorrow’s scandal.

The Madlanga Commission is not only exposing acts of corruption. It is exposing the relationships, loyalties and conflicts of interest that allow corruption to take root long before the money moves. If we are serious about preventing corruption, we must act before the money moves.

Fatima Rawat is a Senior Ethics Subject Matter Expert at The Ethics Institute and an admitted attorney with more than 20 years of experience in ethics and governance. Her work focuses on ethics management and corporate governance, with particular experience in advising public sector organisations. Fatima is the co-author of the Ethics Ambassador Handbook and the Ethics Companion for Legal and Regulatory Functions.