October 20, 2017
Do conflicts of interest actually matter?
Imagine yourself in the following two scenarios. For each scenario, rate the extent to which you think you would engage in each behavior on a scale of 1 (extremely unlikely) to 5 (extremely likely):
If you rated yourself 3 or above for either scenario, take a minute to think about how you would handle each situation. How would your actions potentially cause harm or be unfair to others (i.e., individuals, the firm)? Would you take any actions to increase the transparency or objectivity of your decision?
Both of the scenarios above represent different types of conflicts of interest that may occur in the workplace. A conflict of interest occurs when an individual has interests or commitments that compete or are at odds with one another. In many cases, people are often unaware of potential conflicts of interest lurking in the workplace. Not only do conflicts of interest remove objectivity when making decisions about the entities involved, but they also insert bias into the decision making equation.
So the question becomes, what can we do to address the negative effects of conflicts of interest? Potential approaches include:
Awareness. Establish clear policies and guidelines that make employees aware of conflicts of interest that may exist in the workplace.
Disclosure. By making potential conflicts of interest known to your employer, preventative measures can be put into place to avoid disastrous effects of conflicts of interest for both parties.
Action. Provide employees with strategies and steps to handle conflicts of interest.
Conflicts of interest are not always bad. However, going unreported, conflicts of interest have potential to cause problems for those involved. By having a candid discussion about possible conflicts of interest, steps can be taken to prevent biased decision making.
The Ethics Advantage Team