Discussion: What is a conflict of interest, and why does it even matter?

Yes, seriously. Given that the NZ theatre community is absolutely tiny and 90% of makers are friends with each other and/or reviewers, what constitutes a clear conflict of interest? Is it purely financial? Artistic contributions? How much/little involvement does someone need to have a conflict of interest?

And what are the best ways to handle it? Recusing the reviewer? Declaring? How is this determined?