What are conflicts of interest?

You can't avoid encountering some form of conflict of interest at work - here we look at examples and what you can do to counteract it.

06-12-2022 - 5 minute read. Posted in: awareness.

What are conflicts of interest?

Conflicts of interest - who, what and where?

As the name suggests, conflicts of interest concerns a conflict between the interests of two parties. Problems can thus arise if there are different interests in an organisation or company when it comes to decision-making. It is the personal interests that get in the way of one's professional judgement.

It's things like family relationships, economic factors or the like that may affect you on a personal level. It's normal to have interests that can get in the way of your judgement - so it's important to know when they do. If you can see that there are conflicts of interest, then you can avoid them on a professional level.

A classic example is managers who favour family and friends when hiring, raising salaries or assigning work. This is an example of nepotism - and it can be seen in both the public and private sectors.

There are also other forms of conflict of interest, affecting different kinds of interests - both economic and social. An example might be lawyers representing two clients with opposing interests in the same case. There is a difference between the two examples, but they both fall under the heading of conflicts of interest.

We will present different examples of conflicts of interest below so that you can get an idea of the concept and see how different situations of conflicts of interest can be.

Conflicts of interest in the public and private sectors - 7 examples

No. 1: Spouse as a colleague

The first example we'll address is if you have your spouse as a colleague. A conflict of interest will undoubtedly arise if, for example, your spouse is faced with a supply offer that is presented to a bidder and you, for example, are that bidder, or play a role in the offer.

No. 2: If you have a secondary occupation

A conflict of interest may arise here if you have a job in the public sector and your management needs to liaise with a company or organisation in which you have a secondary employment. For example, if your workplace needs to collect permits or approvals from the company where you have a secondary job, then a conflict of interest arises, as you are most likely to be interested in forming a partnership and therefore gaining financial profit.

No. 3: Conflict of interest in directorships

If a high-ranking employee holds a board position and thus has a voice in the bylaws - for example, in salary negotiations or financial agreements - then a conflict of interest also arises because they can affect their own situation (possibly to their advantage).

No. 4: Private handling of assets

A conflict of interest can also arise if a powerful person in a company has private dealings with a person in a similar position but in another company. Examples of benefits could be expensive trips, dinners or similar. Since extra care is taken in the work relation, it becomes a relation that is difficult to remain impartial when it comes to business agreements.

No. 5: Professional and political interests

Another scenario we'll highlight is that a conflation of political and professional interests might occur in a workplace. An example could be if an employee working for a bidding company works with the head of the contracting authority of a political party - if one has a bias and is a supporter of this political party, a conflict of interest could thus arise, which could then influence one's actions and position towards this boss.

No. 6: Relationship with a party

To give an example from the legal world, consider a judge who has a case where he or she has a financial relationship with one of the parties before the court. For example, the judge may have shares in the company that is before the court, and the judge has thus a personal interest in the case - and furthermore must declare himself or herself disqualified from adjucating the case.

No. 7: Representation by a lawyer

Another example from the court is divorce cases. Here, a lawyer is not allowed to represent both parties because a conflict of interest would arise, as the lawyer possesses confidential information about the parties involved. Thus, there must be a representative of both parties in the courtroom.

What should be done to avoid conflicts of interest?

It would be optimal if conflicts of interest could be avoided altogether in a workplace. However, it is difficult to control employees' relationships, financial background and social intentions. However, you can try to be as transparent in the workplace as possible.

To be transparent, it also requires that the level of information is elevated. Here it is a good idea to have a policy on what employees are allowed to do when it comes to secondary employment, for example - and what disclosure obligations apply in that case.

It is always important that employees are not in any doubt as to what is causing the conflicts of interest to arise. If they are aware of it, they can also more easily avoid it and work and act impartially.

Author Caroline Preisler

Caroline Preisler

Caroline is a copywriter here at Moxso beside her education. She is doing her Master's in English and specializes in translation and the psychology of language. Both fields deal with communication between people and how to create a common understanding - these elements are incorporated into the copywriting work she does here at Moxso.

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