Conflicts of Interests and What YOU Need to Know
This week’s news story about the Northern Territory’s Chief Minister resigning because of a “conflict of interest” is hardly anything new. We see it all the time from various politicians and high ranking officials and CEO’s, usually after someone else exposes the issue. So, it’s reported she had a small number of shares in a mining company that had a mine on a small island.
As an investigator, conflicts of interest are something that workplace investigators often have to deal with. As an investigative trainer, conflicts of interest are a popular training topic for government and corporate companies alike. Importantly though, staff training in conflicts of interest must be more than a quick online course. It’s all about understanding and applying the principals.
So, what’s the big deal? Are we honestly suggesting that someone can’t own a few shares! Do we ban politicians or anyone in government from owning anything, or investing in their own personal finances?
Here’s the issue… she didn’t declare them.
With conflicts of interest, the conflict can be actual (or real), perceived or potential. And guess what, they’re all as significant as each other. The upshot is… conflicts of interest occur in government and private organisations as a matter of course. There’s really nothing extraordinary about conflicts. It’s all about how they are managed. As an investigator, it’s important to understand the concepts of conflicts of interest.
These conflicts, whether actual, perceived, or potential, can have far-reaching implications for individuals, organisations, and society as a whole.
- Actual Conflicts of Interest
Actual conflicts of interest occur when an individual’s personal or financial interests interfere with their professional responsibilities, creating a situation where their judgment and actions may be compromised. Such conflicts often undermine objectivity, fairness, and the ability to act in the best interest of clients, colleagues, or the public.
For example, a public official who oversees the granting of mining licenses also holds shares in one of the companies seeking a license. This situation creates a direct conflict between their personal financial stake and their duty to independently evaluate license applications. Or what about a financial planner who receives commissions for recommending specific investment products to clients may be inclined to prioritise their own financial gain over the best interests of their clients, creating a conflict between their duty as a fiduciary and their personal financial interests.
- Perceived Conflicts of Interest
While actual conflicts of interest involve tangible conflicts, perceived conflicts arise when an impartial observer could reasonably question an individual’s ability to remain unbiased due to their personal or professional relationships. Perception is key here, as it can erode trust and lead to doubts about the integrity of individuals or organisations. For example, a journalist reporting on a political campaign is married to a candidate running for office.
Even if the journalist maintains their objectivity, the public may perceive bias, potentially compromising the trustworthiness and credibility of the news outlet. Or a researcher working on a clinical trial for a new drug is also a paid consultant for the pharmaceutical company conducting the trial. Although the researcher may be objective in their assessments, the perceived conflict raises concerns about the validity and impartiality of the trial.
- Potential Conflicts of Interest
Potential conflicts of interest refer to situations where an individual’s personal or professional interests could reasonably be seen as conflicting in the future, even if no actual conflict exists at present. These situations require proactive measures to identify and manage the potential risks they may pose. Here are a couple of examples of potential conflicts within an Australian context:
- A senior executive in a construction company is considering accepting a seat on the board of directors for a property development firm. While there may be no immediate conflict, the potential for future conflicts arises when the executive is involved in decisions regarding projects involving the property development firm.
- A police officer has a close relative who works as a criminal defence lawyer. While no direct conflict exists yet, there is a potential for conflicts to arise when the police officer is involved in cases where the lawyer represents defendants.
The key is all about managing Conflicts of Interest!
As stated, having a conflict is not bad or necessarily wrong! Certainly, not disclosing the conflict leads to assertions that one is being a “bit dodgy” or deliberately deceptive. This will always end badly (usually). Here’s some key points in the management of conflicts of interest:
- Disclosure: Transparency is essential in managing conflicts of interest. Individuals should disclose relevant interests to affected parties or appropriate supervisory bodies.
- Avoidance: Sometimes the best way to handle conflicts is to avoid them altogether. This may involve refraining from certain activities or recusing oneself from specific decisions.
- Removal: When conflicts arise, individuals should consider removing themselves from decision-making processes to maintain objectivity and preserve the integrity of the process.
- Independent Oversight: Establishing independent oversight bodies can help identify and address conflicts of interest impartially.
- Codes of Conduct and Policies: Organisations can develop comprehensive codes of conduct and policies that outline expectations and procedures for managing conflicts of interest.
Conflicts of interest pose significant risks in professional environments and can compromise objectivity, trust, and ethical conduct. This is particularly evident and significant in government organisations, where those in charge are paid by the taxpayer. By understanding the different types of conflicts—actual, perceived, and potential—and implementing robust management strategies, individuals and organisations can uphold integrity and maintain public trust.
In Australia, numerous examples highlight the importance of addressing conflicts of interest diligently. Whether it’s a public official with hidden financial ties or a researcher involved in clinical trials, the impact of conflicts can be profound. As professional investigators, we’re often called to investigate conflicts of interest and it’s important that we have a comprehensive understanding.
At the Professional Investigators College of Australasia, we’re experts in both the investigation of, and training in, conflicts of interest. Our trainers have extensive experience in this area and engage participants in a way that reinforces the concepts and provides a practical understanding. Don’t just roll out “tick the box” ethics training. Get real, practical and useful training on conflicts of interest (and other ethical issues) from the professionals today!