Conflict of Interest

Imagine you are applying for a job at a company and you are candidate A. There are 10 other eligible candidates applying alongside with you and there is only one vacant position available in the company. The competition is definitely going to be tough and only one candidate can rely on their resume, work experience, required skill set etc. to hope they secure the job. But now what if you find out that one of the candidates applying alongside you, call them candidate B, is the son of the manager incharge of selecting who gets the job. The situation is unfair as you might fear that the person in-charge of the selections is biased towards his family member. Now lets say candidate B is genuinely the most qualified and deserving applicant from the pool of candidates. So when the manager selects his son how can he prove that he acted without any bias as he has vested interests in one of the candidates. This is a classic situation to describe an example of a conflict of interest situation in a workplace. This blog post will now explain the various elements related to conflict of interest policy while referencing the example given above. 

A conflict of interest situation occurs when an employee of an institution finds himself/herself at odds with their personal interests and the organisation interests. If a situation arises where an individual finds them-self torn between their personal obligations and what would be best for the company, it can be described as a conflict of interest situation. So in the above mentioned example the manager has a conflict of interest while selecting a candidate for the job as they cannot objectively make a choice only keeping in mind what would be most beneficial for the company. The manager’s familial ties cannot ensure that he will keep his/her duties as a manager above his personal preference.

So how can an organisation or company prevent a situation in which there is a conflict of interest. What companies often do is that they establish a conflict of interest policy that is applicable to all its employees. They may often make their employees sign a form or declaration saying that they are aware of the policies. In such a document a company normally defines what constitutes as a conflict of interest in their particular organisation and what a person in such a situation is required to do. A person who has a conflict of interest is not at fault unless they conceal the situation and do not bring it to the notice of the appropriate authorities. So in the example mentioned above, the manager should ideally let his/her boss know about the conflict of interest so that the person in-charge of selection can be changed for that time. When employees try to keep any conflict of interest situation quiet, it can lead to trouble with the company if it is found out. That is why companies often have a conflict of interest policy already established so that they can indemnify or punish an employee who compromises on the company’s interests.

There is nothing wrong with being in a situation where there is a conflict of interest. These tricky situations may arise naturally in the course of a person’s employment but when an employee intentionally tries to conceal the situation and fails to bring it to the attention of the relevant authorities, it becomes a problem. If a situation arises where a person can profit individually from a situation but it would be at the cost of the company, and they do so consciously then that is wrong. But if a person in a conflicting situation directly brings it to the attention of the relevant authorities then it can be dealt with in the correct manner. In the above mentioned example:- its neither candidate B nor the manager’s fault that there is a situation in which there is a conflict of interest, but what the manager chooses to do next decides if it is wrong or not. And hence if the manager is already aware of the conflict of interest policy of that company and he realises he is in a tricky position, he should let his seniors or the Human Resource division of his company know. The relevant authorities can then choose how to handle the situation. And that is also another reason why it is very important to have a conflict of interest policy in each company, organisation or institution as employees are made aware of the kind of situations in which they need to seek intervention from senior level employees. 

Because organisations and companies differ in their nature, their conflict of interest policies may also be different. In organisations under the state’s control, having a conflict of interest policy is a requirement to prevent future mishaps but in private companies it is up to them to have established policy or not. Some organisations view romantic relationships between coworkers as being a conflicting situation and their policy might mention this explicitly but other companies may not take this issue that seriously. It is also important to have a conflict of interest policy that is aligned to the purpose and function of the mentioned organisation. Like financial institutions often include the different types of situations that can be conflicting in relation to monetary activities. But a non profit organisation may not think it necessary to mention the same for their purpose. And hence there is no one standard policy when it comes to conflict of interest situations as it mainly depends on their function or purpose.   

While a nature of the policy to deal with conflict of interests may vary from organisation but having established policy is an important safeguard that every company needs to implement. Not only does this policy help employees understand how to handle tricky situations, it also gives a company the power to take appropriate steps to protect their own interests. And so having a conflict of interest policy is a very important step that all organisations should take.