A company set up by the chair of the Equality and Human Rights Commission gave paid advice to Channel 4 over the Big Brother race row last year.
Trevor Phillips, who is paid £110,000 as head of the EHRC, led a piece of work into editorial content and audience research following the controversial show.
The chief executive of Channel 4 had announced that Mr Phillips had been commissioned to produce a report, but it was not revealed that the work would be through his consultancy firm or that he would be paid for it.
A contestant in the 2007 celebrity version of the programme was subjected to racial abuse by other housemates, causing an international scandal.
He was paid through the Equate Organisation, which he co-founded and owns 70% of.
So far Channel 4 has been the company’s only client. Mr Phillips has previously had success as a TV producer and presenter.
The EHRC claimed there was no conflict of interest.
“It would have been inappropriate to undertake that work as Chair of the Equality and Human Rights Commission as it would involve giving advice to a broadcaster on editorial matters, something the Commission is not empowered to do,” the commission said in a statement.
“To show complete visibility, Trevor did the Channel 4 work via Equate, a company he has set up to ensure a clear and public division between his role as Chair of the Commission and his other interests, including some of his contributions to charities.”
Others claim that is it unethical for him to act as a consultant and the head of a statutory body side by side.
Norman Baker, Liberal Democrat MP for Lewes, told PA:
“I think unfortunately he has created what appears to be a conflict of interest, and I think it would be much cleaner for the Commission if such outside interests did not exist.
“It’s the sort of thing you do when you’ve left your job, not when you’re still in it.”
The EHRC is designed to promote a fair, equal and diverse society and tackling illegal discrimination.
It began work last year, and brought together the three existing UK equality commissions – the Commission for Racial Equality, the Equal Opportunities Commission and the Disability Rights Commission.
The EHRC incorporated three new human rights strands – age, sexual orientation and religion and belief.