Conflict of Interest

DIVIDED LOYALTIES

What is a fiduciary position?

Being entrusted with powers, opportunities or assets. None of these given to him for his own advantage but to be managed for the benefit of others. Difficult to ascertain how conscientiously those responsibilities have been discharged. osition of trust, therefore trustworthy manner of acting e!pected.

"!ample #

osition$ %ervices &anager of the firm 'esponsibility$ %ell a one(year old car no longer needed by the firm, decide what price we will accept for the car. roblem$ )I need a vehicle* why don+t I buy this one for myself?, Issues$

Not always so clear...

What creates the ethical problem referred to as conflict of interest? -he presence of the conflict between personal interest and official responsibility. No matter what the final choice is, the person+s position remains conflicted. %trong reasons to avoid it.

Common situations

C". rents his house to the company. Who determines how much the rent is? .ne or more directors rent their houses to the company? 'elative of C"./director/ban0 manager or a company one of them is interested in gets a loan from the ban0. 'eal estate firm partner does . .

Common %ituations

Credit manager in a ban0 gets Christmas present, nice wristwatch, from a customer Departmental head in insurance company has his sister in the department 1usband and wife wor0ing in same ban0 as 2& and 32& respectively Close relations of employees of oil mar0eting company own their customer petrol stations.

But where+s the problem?

4ou undertoo0 to dedicate your best efforts to advancing the best interests of the company. -hat+s why we gave you decision powers and you can commit the company to some things. If you use these powers for your own benefit at company cost, you+re defrauding us 5ust the same as if you were ta0ing money from the till.

When is it wrong to ta0e care of Number #?

When one tries to supplement legitimate and above(board earnings by e!ercising the powers entrusted to one for protecting and advancing the company+s interests in one+s own favour and to the company+s detriment.

What e!actly is wrong with C.I?

"rosion of one+s ability to lead and inspire subordinates. 6. Impossible to guarantee unbiased 5udgment once one+s own interest is at sta0e. 7. %ubordinates are caught in the middle and thus put in a very difficult situation. 8. .thers will also be careless about being in this position.
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If impossible to avoid, mitigate$

Disclose the situation to the others. 6. Dis9ualify oneself from participating in decisions relating to the matter with regard to which one has a conflict of interest. Never forget that the best case is to avoid being in such a position. Even the mitigating steps can end up biasing the ones to ta e the decisions.
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-om/Dic0/1arry
!as he in a situation of "OI# !ou$d he benefit persona$$%#

If yes, did he ta0e steps to mitigate it? 1ow effective would those steps be? What would be the possible impact of his actions? If no, e!plain why you thin0 not? Would your e!planation convince the common man on the street?

If yes, how? If no, defend your position.

:earning oints
Avoid situations invo$ving "onf$ict of Interest. If this seems impossible, weigh the dangers vs. the reasons and be sure it+s necessary. If you can+t avoid it, ta0e steps to minimi;e dangers$ Disclose the situation to the others. 6. Dis9ualify yourself from participating in decisions relating to that matter.
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