Introduction to conflict of interest policy

Are you a member of a company’s selection panel who has made a job offer to the son of your relative? Then, you are in a conflict of interest situation. This article introduces the concept of conflict of interest.

What is conflict of interest?

Overview A conflict of interest occurs when an individual in a position of trust or an organisation cannot act impartially in a given situation because they are involved in competing interests. The existence of conflict of interest does not necessarily imply wrongdoing. However, being involved in competing interests is considered to provide an individual or a corporation with the opportunity of exploiting their professional or official capacity for their benefit. The British Medical Journal describes conflict of interest as,
“a set of conditions in which professional judgement concerning a primary interest (such as patients’ welfare) tends to be unduly influenced by a secondary interest (such as financial gain).”

Conflict of interest policy

COI Statement It is common practice that organisations from government institutions to companies, universities and medical bodies have a conflict of interest policy. These bodies publish a conflict of interest statement in which they declare their position as to where they stand concerning their members personal, business and professional interests.
They do this to inspire confidence to the public as to their ethos and impartiality.
Types of conflict of interest The most common types of COI have to do with:
1) Individuals entering employment where the interests of one job contradict the other
2) Individuals being in a professional position to favour family members, friends or relatives (nepotism)
3) Individuals or organisations completing transactions by being simultaneously the initiators of the transaction and the beneficiaries.
How to avoid conflict of interest Depending on the conflict of interest policy that a given organisation employs there are different ways of dealing with COI: 1) Removal: An individual or organisation may have to eliminate any connection to interests which may potentially corrupt its impartiality. 2) Disclosure: An individual or organisation may have to disclose their
interests – and in some cases anything less than full disclosure is considered a crime. 3) Abstention: An individual or organisation may have to abstain from decisions where there is a known conflict of interest.
Final thoughts
Conflict of interest situations abound: high-ranking officials may be involved in self dealing or be members of corporate boards; doctors may be shareholders of Pharmaceutical companies; employers may make a job offer to a relative; a solicitor may be representing a client who has a dispute with another client of Law firm the solicitor is working for.
That’s why conflict of interest policies are useful tools for preventing COI.