What Is Conflict Of Interest and How to Solve it?

A workplace conflict of interest occurs when a staff member engages in an activity or association that benefits them rather than their employer. To put it another way, each party's interests conflict with one another. When an individual at work has a conflict of interest, it frequently impacts their capacity to make decisions at work and their devotion to their company. 

In business, a variety of challenges might arise. There may be a conflict of interest in the job at some time. You must take immediate action and do what is best for the organization to guarantee smooth business operations. 

Types of conflicts of interest

A commercial conflict of interest can arise for a variety of reasons. A conflict of interest among employees might be classified in a few of the following ways:

• Relational (family): When family members are employed and given preference over the other applicants or employees. For example, the person in charge of recruiting new staff on your behalf. The interviewers have applied for a job. It might be a conflict of interest because they are in charge of hiring. She might hire her cousin instead of another competent candidate since he is kin.

• Relational (romantic): When an employee benefits from a relationship with someone associated with the company (e.g., a coworker, a customer, etc.). One of the employees develops a love interest in their boss. It's a conflict of interest since the manager has authority over issues like performance reports. Because of their friendship, the employee may be given preferential treatment.

• Financial: This is if an employee earns more money on their own. This is an instance when a consumer gives an employee a present in consideration for anything, such as a concession on the employer's products or services. Exercising decision-making authority over a purchasing or business activity will have an impact on a company in which the employee has an interest.

• Confidential: When a worker at your company has access to sensitive information and misuses it, for instance, inside information to competitors, or employees can use them for their own. If an employee launches a venture that rivals their employer, it might result in a direct conflict of interest. A conflict of interest might arise if an individual uses abilities learned at work to establish a competitive firm.

Importance of avoiding conflict of interest

Conflicts of interest can jeopardize your credibility and professional reputation at work, as well as jeopardize your career. That's why it's crucial to know what constitutes a conflict of interest, as well as your employer's policies on transparency, accountability, and what steps one should take to ensure the employees are obeying the law.

Businesses must develop a policy to prevent conflicts of interest among the company's board of directors, workers, and contractors. Identify/list what instances constitute unethical conflicts in this policy, and assign a committee enforcing the strategy by filtering for the conflicts stated.

Take a look at some strategies for dealing with business conflicts of interest.

How can companies handle conflict of interest?

Although an employee might be completely aware that they are engaging in a conflict of interest, many people are unaware that their activities violate business policies and procedures. Here's how to be sure you're not breaking any of your employer's rules.

• Disclose any potential conflicts

Similarly, at the start of the professional relationship with the employer, you should report any possible conflicts. Be honest so that nothing comes back to bite you later. If the employer agrees the conditions are appropriate, seek a written confirmation from them.

• Examine the company's code of ethics

As part of the hiring package, many businesses will ask employees to sign a written code of ethics. It will usually specify what represents a conflict of interest, such as workplace ties, freelancing work with other firms, nepotism, and so on. Before you sign this contract, remember to read it completely and preserve a copy to refer to if any concerns occur.

• Non-compete agreements should be properly reviewed

A company may require their employee to sign a non-compete clause as part of the recruiting process. Before signing this contract, be sure they understand the conditions. If you have any questions or are unhappy with the agreement's contents, express your concerns before signing it.

• Generate inquiry

Whether you are afraid that you are involved in or about to engage in a conflict of interest while working for a company, ask the potential employer or an HR representative if you breach any rules or standards.

• Follow the processes laid forth by the company

Conflicts of interest are likely to be reported by your employer. They're probably spelled out in the code of ethics, so understand exactly what they are and how to follow them if something goes wrong while you're working. For example, you may be obliged to declare conflicts to your HR representative in writing. 

What do conflicts of interest look like at work?

Here's how a conflict of interest can look in a workplace:

• Making plans to work with a supplier or customer in the future while still trading with them now
• Using social media to publicize your company's flaws
• Providing compensated services to a corporate client or supplier on your vacation
• Undertaking a purchase or commercial decision to help a company in which you have an interest
• Accepting a favor or a present from a client over the amount set by the firm as acceptable
• Owning a piece in a company that offers your employer goods or services
• In an interview, you might discuss your employer's actions or plans
• Use sensitive information obtained on the work for your gain
• Hiring an inexperienced relative to assist with your company's demands is a bad idea
• Creating a business that delivers services comparable to those provided by your full-time work

How to solve the conflict of interest?

Once you've concluded that an individual has a conflict of interest, then you must address or eliminate this problem. Always check the company's conflict of interest policy first. This paper should explain how to deal with COIs of various sorts and severity levels.

Depending on the COI's specifics, you might need to:

• issue a warning to the employee
• request that the employee gives up their competing private interests.
• Allow only limited participation in the contentious project or job.
• The employee should be removed from the initiative or assignment.
• The employee should be fired.
• Consult an attorney to discuss the legal ramifications of the conflict of interest.

Keep a record of the judgment in the employee's service record, detailing the reasons for your decision and the steps you took. Then, in writing, inform the employee of your choice. Share the facts of the COI and how it has been handled to the whole company.

Final Word

Employees aren't always aware of professional conflicts of interest. It's the management's role to assist them in recognizing ethical challenges and making the best judgments possible. There is no wrong in asking, but not asking might do a tremendous amount of damage to a people, an organization, or both. It is really important to be upfront and accountable to guarantee that we do not have a perceived or real conflict of interest. Apply the policy systematically, and entrust the policy board with ongoing supervision of the application system so that workers, applicants, and the general public are aware that the organization is dedicated to eliminating conflicts of interest in the first place.