AvoIDInG or MAnAGInG ConflICts oF IntErEst
Conflict of interest is a situation that arises when a person has competing interests or loyalties that interfere with their ability to perform their duties impartially or objectively.
Conflicts of interest can occur in a wide range of settings, including business, government, academia, and non-profit organizations. In this article, we will explore the concept of conflict of interest, its types, causes, and consequences, as well as some strategies for managing it.
For example, if a supervisor favors an employee who is a relative or friend over other employees who are more qualified for a job, this constitutes a personal conflict of interest. Organisational Conflict of Interest occurs when a person or organisation’s activities or interests conflict with their professional obligations.
For example, if a consultant provides advice to a client while also working for a competitor of that client, this constitutes an organizational conflict of interest.
Everyone in the industry are aware of the fact but decided to be silent of this conflict.
Power imbalances, such as those between supervisors and subordinates or between clients and consultants, can create conflicts of interest when they influence decision-making in favor of the more powerful party.
Conflicts of interest can have various consequences, such as loss of trust, legal and ethical violations as well as financial loss.
When conflicts of interest are discovered, they can erode trust and credibility in an individual or organization.
This can damage their reputation and make it difficult to regain the trust of stakeholders.
The best is to avoid the potential conflict of interest, in the best interest of the individual as well as the organization.
If it is not possible to avoid, the next would be managing the same.
If possible, avoiding conflicts of interest is an important step in maintaining ethical standards and preserving trust in various professional and personal settings.
Identify potential conflicts of interest is key to manage the same. Take the time to consider your relationships, obligations, and financial interests, and identify any situations that could create a conflict of interest.
If you become aware of a conflict of interest, it is important to disclose the situation to the appropriate parties.
This will help to increase transparency and reduce the risk of unethical behavior. Whenever possible, try to avoid situations that could create conflicts of interest. For example, if you have a financial interest in a company, it may be best to avoid making decisions or providing advice that could affect that company.
If you are unsure about whether a situation creates a conflict of interest, consider seeking guidance from a trusted advisor or expert or also be mindful of your actions and decisions, and make sure that they are aligned with your values and ethical standards.
To manage conflicts of interest, individuals and organizations can adopt various strategies, such as prior disclosure, recusal, separation of duties and ethics training. Recusing oneself from a decision or activity that presents a conflict of interest can help ensure impartiality and avoid the appearance of impropriety while separating duties and responsibilities can help minimize the risk of conflicts of interest.
For example, having different people responsible for hiring and supervising can prevent personal relationships from influencing decisions.
By providing ethics training and guidance can help raise awareness of conflicts of interest and promote ethical behavior.
Can Chinese wall be used to avoid or manage a potential conflicts of interest ?
Some professionals do work on this principal but it is very difficult to maintain such as a separation, if the said wall is created within business partners.