Actually, it's a combination of the two.
Often, under the Conflict of Interest Act, a public office holder, principal or otherwise, will declare to us on their own initiative the presence of one or more persons they consider to be people that they should not interact with in the course of their duties, given the closeness of their relationship. So transparency is important, because then you create filters under the act.
For instance, it is stated that Mr. X is a friend of Mr. Fergus. That way, everyone knows. Moreover, Mr. Fergus asks his office to ensure that he is never called upon to handle a file concerning Mr. X. This is transparent.
In any event, even if Mr. Fergus has a similar relationship with Mr. Y and does not declare it, he is also required to stay away from files that concern him. He knows that. If someone ever makes a complaint, I will have to check whether he has the same kind of relationship with Mr. Y without declaring it.
So both elements should be considered.