A conflict of interest sometimes lies literally on the surface and is clearly visible to others. However, the most serious problems arise in cases where such a phenomenon is outwardly invisible. If it is not detected in time, it can ultimately greatly damage the reputation of a person or organization.
There are many real-life examples of conflicts of interest. For example, a man is the boss and his son works as his assistant. And even if the latter does his job brilliantly, people will never objectively evaluate such a situation.
What is a conflict of interest and how can it be detected? Let's try to understand this issue using specific examples.
Distribution area
Conflicts of interest are a ubiquitous phenomenon. Similar situations can arise in any area of life. Examples of conflicts of interest often occur between family members and classmates, among employees of the same organization, as well as in communities created by like-minded people. Moreover, their presence does not at all mean that people experience personal hostility towards each other. The most difficult areas in which conflicts of interest occur are the political and public sectors.
How to avoid this?
A conflict of interest can arise in any organization; to exclude this possibility, a potential employee may be checked when applying for a job. In particular, this very often happens in such areas as accounting (in particular, when hiring for the position of “chief accountant”) and management.
The accounting sector and its employees play a key role for enterprises, as they are responsible for reporting on the use of finances and the company’s net profit or loss.
The accounting component regulates activities, which is a very important stage. The reporting provided by the chief accountant influences the further development of the company and allows timely recognition of opportunities for obtaining additional profit or transactions that had a negative impact on the company’s activities. This happens as follows: the chief accountant at the end of each billing period submits reports indicating the use of inappropriate methods of activity or other factors that introduce conflict into the favorable development of the company.
The reporting maintained by the chief accountant and the accounting component as a whole is intended to prevent inappropriate use of resources. Conflicts of interest arising in this area may affect the work and reporting submitted by accountants.
Definition of the concept
A similar phenomenon occurs in our lives quite often. It is simply impossible to hide a conflict of interest or quickly exhaust it. That is why a federal law appeared in Russia, which is called “On Combating Corruption.” This document interprets the concept of “conflict of interest” as a situation in which there is an indirect or direct personal interest of a municipal or government employee. At the same time, she is capable of influencing or is already influencing the performance of his official duties. As a rule, examples of conflicts of interest in the state and civil service relate to the receipt of material benefits by employees not only for themselves, but also for those third parties with whom there is a connection in the form of financial obligations.
In a 2009 report, Marilyn Field and Bernard Law pointed out that a conflict of interest is nothing more than a set of obligations that create risks that a secondary interest will directly influence professional actions or judgments regarding the primary interest. In other words, a similar phenomenon can occur in the case of existing personal benefit of a person who participates in the process of making a particular decision. This leads to damage to the interests of the company or society.
Let's look at some clear examples of conflicts of interest:
- A pharmaceutical company awards a research grant to a doctor. In this case, the specialist begins to feel obligated to prescribe medications from this particular manufacturer to his patients, despite the availability of better alternatives. In this case, damage to public interests is caused.
- A woman who is an employee of the company describes to the boss the merits of her nephew as a candidate for a vacant position. However, she does not mention her family ties with him.
- The boss gives the employee the task of finding a supplier for the company. He offers in response an organization in which he himself is the owner of shares.
- At the end of the year, the boss gives himself and his team impressive bonuses. Moreover, this is happening against the backdrop of the fact that the company’s owners are facing serious losses.
In most cases, such situations are not a violation of the law. This is why there are so many examples of conflicts of interest in any organization. But the existing problem will certainly call into question the employee’s reputation, reliability and honesty. In the future, this will negatively affect the work of the entire team.
Terminology concept
Any conflict is considered to be a struggle between opposing statements, ideas and points of view . Clashes originate from every interaction within a social structure. The goal of any conflict of interest is for each side to stubbornly defend its selfish motives. With any contradiction in the state or municipal service, difficulty inevitably arises in forming an unbiased response and the right to choose between moral and ethical fragments of action.
Personal interest is the future opportunity for a citizen who must fulfill his duties to acquire any dividends in cash or any other form (material benefits for himself, family or organization). Selfish motives can be caused by the functionality of an individual who has the right to put forward his point of view when considering technical, financial and material issues.
The concept of conflict of interest is divided into two categories : destructive and constructive. Any of these processes is divided into the following arguments:
In the sphere of civil and municipal coexistence, a large number of all kinds of conflicts are known. Separate types include conflicts of interest arising from public service , because they have specific arguments from politics, jurisprudence and psychology.
In legal theory, the term “collision” implies an episode where a defined individual is capable of possessing two incompatible desires. In the category under consideration, one side of the municipal or public service, which may suffer from the satisfaction of an opposing opinion, will be protected by the person himself. Aspirations of a private or social nature are under protection.
In entrepreneurship, collisions are divided into three conventional components : consumer duality, large losses and actions of an unlawful vector. In addition, a constant objective synthesis of all three fragments of the confrontation of interests is necessary. At the moment, this direction in the collision receives a large field of action.
Signs and forms
The word "conflict" comes to us from Latin. Translated from this language, it means nothing more than “collision.” That is, a certain point comes when two or more members of a community or group begin to make claims on the same object. This leads to the intersection of the areas of interest of all those who are related to this situation.
Conflicts of interest are divided into personal and organizational. In the first case, the performance of official duties by a person comes into clear conflict with his own desires. Examples of conflicts of interest in the service sometimes concern, for example, a situation where, despite the fact that the task will not be completed on time, the employee wants to go home either at the end of the working day or earlier. After all, he has his own plans for the evening.
In the event of an organizational conflict, an entire private enterprise stands up to defend its benefits. In this case, the company takes into account only its own interests and tries to refuse or refuses to cooperate with the state, becoming unable to provide its services impartially. Responsibility for such a situation rests entirely with the manager, because such actions will certainly cause damage to the company as a whole. If damage is caused to structures supported by the state, then in this case the current legislation may come into force.
Similar situations arise in cases where the object of the conflict cannot be divided between the two parties laying claim to it. At the same time, no one wants to make concessions or seek compromises.
Conflict resolution
Article number 11 of the federal law, which provides for combating corruption, identifies two subjects of settlement, as well as the prevention of conflicts of interest. One of them is a municipal (civil) employee. The second subject is the employer's representative.
In this regard, municipal and civil servants are vested, according to the law, with two main responsibilities. First of all, they need to take measures to help prevent any situations in which a negative phenomenon may occur. In addition, they must write a conflict of interest notice, an example of which is given below, to their immediate superior. Such a document should indicate not only the existing situation, but also the possibility of its occurrence. Moreover, a civil servant is obliged to take such a step already when he becomes aware of it.
To prevent a conflict of interest, this government representative should not maintain contacts with organizations whose activities are in an area that intersects with his official responsibilities. This does not apply to cases where he is obliged to perform such work.
As for notification of the likely occurrence of a conflict of interest in writing, the degree of personal benefit of an employee, according to current legislation, should be determined only by the official himself. His failure to take measures to resolve such a problem entails his dismissal.
Topic 4. Conflict of interest in the organization
In the process of corporate governance, a clash of interests of different groups of shareholders (participants) arises - a phenomenon known as a “conflict of interest”. In a broad sense, a conflict of interest is a situation when an agent (manager), when carrying out a certain order of a principal (interested person)) has competing professional or personal obligations, monetary or non-monetary interests, which make it difficult to objectively execute the order. Conflicting interests can either be a consequence of the actions or personality characteristics of the agent, or a consequence of the actions or characteristics of the organization of the principal. The main cause of corporate conflicts is considered to be the excess of authority and the role of certain interest groups in corporate governance, or, in other words, opportunistic behavior. According to O. Williamson's definition, it means “the pursuit of self-interest, reaching the point of treachery.” Abuse of power by one of the stakeholders or groups leads to organizational pathologies and low activity of stakeholders in the development of partnerships.
A corporate conflict of interest is a situation of moral choice between the interests of the corporation as a whole and the interests of a separate group of entities participating in corporate relations. The essence of a “conflict of interest,” which is not always correctly understood by managers and employees of an enterprise, is not the very fact of violating “corporate interest” in favor of an individual or group, but the possibility of a situation arising when the question arises of choosing between the interest of the corporation as a whole and another interest . In order to avoid such a “conflict,” the task of corporate governance is to use managerial, technological, and organizational means to prevent the likelihood of changes in the hierarchy of interests and target functions of participants in the corporation’s activities.
The following types of conflicts of interest that can have a negative impact on the activities of the corporation are distinguished:
1) conflicts related to the actions of company managers;
2) conflicts between owners of large (controlling) blocks of shares and minority shareholders;
3) conflicts between employers and employees;
4) conflicts with the company’s creditors;
5) conflicts between management and representatives of government authorities, public and professional organizations.
A personal conflict associated with the actions of company managers that violates the rights of shareholders is called an agency problem. It arises when managers have a motive to make decisions that correspond more to their own interests than to the interests of the owners. This is due to the fact that in joint-stock companies shareholders cede their rights to manage the company to managers. They delegate management functions to managers and pay them to perform these functions as their business agents. Thus, there is a separation of ownership and management functions. The separation of the functions of ownership and management of companies gives rise to the problem of agency costs (M. Friedman, Yesen, Meckling), since the interests of owners and managers (managers) clearly do not coincide. Management is the highest management level that performs the functions of strategic management of the company's enterprises. He is interested in receiving a guaranteed salary, the strength of his position, the stability of the company and reducing risks from the impact of unforeseen circumstances, as well as in extending his employment contracts; interact with a large number of interest groups.
A personal conflict of interest arises in the following cases:
• resolution of cases concerning people close to him (relatives or friends);
• resolving matters involving its supported supplier organizations and business partners;
• the possibility of receiving a bribe for a certain decision;
• the possibility of employing a manager after leaving this company for another company, to which information about competitors may be transferred;
• interests that arise in connection with part-time work;
• receiving gifts from individuals and organizations.
Secondly, the most common corporate conflicts include conflicts between owners of large (controlling) blocks of shares and minority shareholders. The former, acting solely in their own interests, can make decisions on making transactions that are contrary to the interests of the company (on the withdrawal of the company's assets), on non-payment of dividends, on conducting an additional issue in order to dilute the share of small shareholders, etc. 1) Fulfilling the requirements of owners and shareholders is, of course, one of the most important due to the threat of mergers and acquisitions and the likelihood of a sharp drop in the market value of shares due to violations of shareholder expectations. Shareholders are interested in high profits and a high stock price of the company; tend to support management decisions that lead to high profits, but involve a high level of risk. In the absence of effective mechanisms to protect the rights of minority shareholders, an enterprise loses the opportunity to attract capital through additional issues.
Thirdly, there are conflicts between employers and employees, which, as a rule, have had negative consequences for corporations in which human capital is the main intangible asset.
Fourthly, these are conflicts with the company’s creditors. The corporate governance system should create a mechanism to protect the interests of all economic agents, including creditors. It is obvious that such negative consequences of an imperfect corporate governance system as “pumping out assets” or cash flows of an enterprise by managers or individual shareholders, for example, by concluding non-market transactions, constitute a direct violation of the rights of creditors, and therefore reduce the creditworthiness of the company.
Finally, conflicts between management and representatives of government authorities, public and professional organizations are quite common. Excessive government intervention in many countries has caused serious organizational pathologies. In those state-owned companies where political parties and professional organizations became stakeholders of the "inner circle", management often became completely under their control. As a result of these imbalances in the balance of power, large companies lost their market orientation towards the needs of the market and consumers, and labor productivity clearly did not correspond to the income of workers thanks to the support of trade unions.
To resolve the problem of conflict of interest, the following measures can be used.
Firstly, this is an increase in the information openness of corporate governance bodies, which is closely related to the issues of (electronic) reporting and auditing. Many conflicts of interest cannot be translated into corruption if there are mechanisms for operational public and domestic control over the actions performed by officials.
Secondly, it is necessary to create a system of management regulations, for example, a code of corporate conduct, a code of ethics and culture, etc., using which it will be possible to judge the legality of management actions from the point of view of law and morality. Without such regulations, information openness and reporting will be ineffective.
Thirdly, the introduction of procedures for mandatory declaration of conflicts of interest that arise for an official when resolving a particular case. This measure should be supplemented by special management regulations describing the procedure for action in such a situation and sanctions for failure to submit the appropriate declaration.
Fourth, impose restrictions on employment in competing companies.
2. One of the most negative consequences of a conflict of interest is corruption, which manifests itself in the use by an agent of powers to achieve goals not provided for in the assignment. Corruption (from the Latin corrumpere - “to corrupt”) is a term that usually denotes the use by an official of his powers and the rights entrusted to him for personal gain, contrary to the law and moral principles. Any person who has discretionary power - the power over the distribution of any resources that do not belong to him at his own discretion (official, deputy, judge, law enforcement officer, administrator, doctor, etc.) can be subject to corruption. The main incentive for corruption is the possibility of obtaining economic profit (rent) associated with the use of power, and the main deterrent is the risk of exposure and punishment. When studying the problem of corruption and abuse in corporate governance, the agency model considers a situation where the guarantor (“principal”) does not have complete information about the actions of the performers (“agents”). Therefore, he enters into an agreement with them containing conditions favorable to the agents, which motivate them to behave in the interests of the principal.
According to Russian legislation, corruption is abuse of official position, giving a bribe, receiving a bribe, abuse of power, commercial bribery or other illegal use by an individual of his official position contrary to the legitimate interests of society and the state in order to obtain benefits in the form of money, valuables, other property or services of a property nature, other property rights for oneself or for third parties, or the illegal provision of such benefits to the specified person by other individuals; as well as the commission of these acts on behalf of or in the interests of a legal entity.
In private business enterprises, managers use their discretionary power in negotiating contracts, hiring new employees, supervising subordinates, etc. This opens the door to actions for personal gain that may cause economic harm to the owners or shareholders of the company. Bribes in the private sector are commonly referred to as “bribery.” Business corruption, along with everyday corruption and corruption of the supreme power, is one of the types of corruption.
The term corruption is most often used in relation to the bureaucracy and the political elite. Business corruption arises from the interaction between government and business. For example, in the case of a business dispute, the parties may seek to enlist the support of a judge in order to make a decision in their favor. In the ranking of the state of corruption in countries around the world, compiled annually by Transparency International, Russia in 2010 took 154th place out of 180 with an index of 2.1 points (index 0 means the maximum level of corruption, 10 means no corruption).
In the absence of anyone having discretionary power, corruption would be impossible. However, a person or group with power cannot independently ensure the implementation of the policies that it determines. For this purpose, it appoints managers, to whom it invests the required powers, to whose disposal it places the necessary resources, for whom it establishes rules of conduct and over whom it exercises supervision. However, in management practice, instructions change much more slowly than external conditions, so they allow management to act at their own discretion, since otherwise the management system becomes completely inflexible, and the discrepancy between strict standards and the real situation can completely paralyze the company’s activities. However, this means that in a critical situation the manager can begin to be guided by the most profitable rent. Thus, the principle of governance itself contains the potential for corruption. This possibility develops into objective conditions
Disciplinary liability of state civil servants.
Disciplinary legal coercion is one of the types of state coercion, and it has all the common features of this method of exercising executive power. At the same time, it has a number of features, the totality of which determines its qualitative originality as an independent type of forced activity.
1. Measures of disciplinary and legal coercion are used most often in connection with disciplinary offenses, but can also be used to combat other offenses and even immoral acts (students, investigators, for example).
2. Disciplinary legal coercion is extrajudicial, it is a type of executive and administrative activity
3. Disciplinary legal enforcement is carried out by all employers, and therefore by bodies of non-state (municipal and private) organizations in relation to the citizens working in them. They do this on the basis of labor law norms, in accordance with the powers that the law has granted to employers. The denationalization process has increased the scope of disciplinary enforcement carried out by non-state bodies and their officials.
4. The most important feature is that it can only be carried out in relation to members of stable teams, subjects of permanent organizational ties (workers, employees, military personnel, students, prisoners, etc.). which is characterized by the widespread use of moral and legal sanctions (for example, reprimands).
6. Disciplinary legal coercion is carried out by subjects of disciplinary power. Usually it is held by subjects of linear power and team leaders. Exceptions include military personnel, the chief and commandant of the garrison, as well as some other acts in force in transport.
But in general, many subjects are the bearers of disciplinary power; the right to exercise disciplinary enforcement is granted to a large range of bodies and officials.
7. Disciplinary enforcement is regulated by many branches of law: labor, administrative, cooperative, and criminal law. It is mainly regulated by legislative acts, but in some cases by government regulations and even departmental acts.
8. If the means d
While civil and administrative coercion can be applied to both individual and collective subjects of law,
measures
are applied only to individuals. Disciplinary enforcement is personified.
In addition, within its framework there are many sanctions and procedures designed only for a certain group of people. Thus, we can highlight special sanctions applied to soldiers and officers, students and graduate students, executives, prosecutors and investigators.
Thus, disciplinary and legal coercion is the application, on the basis of legal norms in the process of executive and administrative activities, by subjects of disciplinary (linear) authority of coercive measures against subordinates in connection with the commission of disciplinary (and in cases established by special norms, other) offenses.
Disciplinary legal coercion is divided into types depending on what branch of law it is regulated by.
Administrative law establishes the use of disciplinary measures in relation to three groups of subjects - members of administrative teams:
• militarized employees (military personnel, certified police officers);
• students (students, undergraduates, graduate students);
• persons whose freedom is temporarily restricted on the basis of administrative law (placed in special detention centers).
The normative basis for disciplinary enforcement against military personnel and certified employees of internal affairs bodies are the disciplinary regulations of the Armed Forces of the Russian Federation, the Regulations on service in internal affairs bodies and the Law on the financial liability of military personnel. The application of disciplinary sanctions to students and graduate students is regulated in the most general form by clause 9 of Art. 16 of the Federal Law “On Higher and Postgraduate Professional Education”.
According to the method of influence, the immediate purpose of application, among disciplinary coercive measures, one can distinguish between penalties, restorative and other measures. When the former are used, disciplinary action ensues; the use of a restorative measure - recovery of damages - is nothing more than financial liability.
Other measures should include all disciplinary measures that the legislator did not include among disciplinary sanctions and that are not related to compensation for damage. (for example, non-admission of a student, reduction of vacation, etc.)
The above examples indicate that, among others, there are many disciplinary measures.
Disciplinary responsibility is the imposition of disciplinary sanctions based on legal norms by subjects of disciplinary power on members of stable teams subordinate to them for disciplinary offenses and other offenses . It is an integral, but quite independent part of disciplinary enforcement. Its most important distinctive features:
1) disciplinary liability occurs, as a rule, for a disciplinary offense, but can also occur for the commission of other
2) it consists in the application of punitive sanctions • - disciplinary sanctions;
U) the right to exercise it belongs to the subjects of linear government;
4) the grounds and procedure for disciplinary liability are regulated by various branches of law. in labor and administrative law.
Disciplinary liability under administrative law is regulated by the disciplinary charters of the Armed Forces, the customs service and a number of other administrative legal documents.
As a rule, the responsibility in question arises for a disciplinary offense. For this, a disciplinary sanction may be imposed on the perpetrator.
The types and size of this type of punitive sanctions are established by regulations. Since disciplinary sanctions are carried out within stable teams, among them there are many moral and legal sanctions (reprimand, reprimand), sanctions that change or terminate a person’s relationship with the team (demotion, dismissal, expulsion). And they act, as a rule, only while the citizen is in the team (serving).
The set of disciplinary sanctions is different for different categories of subjects of permanent organizational relations. So, for students, graduate students, students of preparatory departments of universities, this is a remark, reprimand, severe reprimand, expulsion, and for ordinary and junior commanding officers of the Ministry of Internal Affairs - this is a reprimand, reprimand, severe reprimand, warning of incomplete official compliance, demotion, deprivation badge, reduction in special rank by one step, dismissal from internal bodies. A civil servant may be subject to all types of liability provided for by current legislation:
– criminal;
– civil law;
– disciplinary;
– administrative.
Criminal liability of a civil servant occurs if he commits a crime provided for by the Criminal Code of the Russian Federation.
Civil liability arises if his actions or inactions cause property or non-property damage (harm to health or moral harm) to a citizen or organization.
An official is subject to administrative liability if he commits an administrative offense in connection with failure to perform or improper performance of his official duties.
For committing a disciplinary offense, i.e. for non-fulfillment or improper performance by a civil servant through his fault of the official duties assigned to him, the employer’s representative has the right to apply the following disciplinary sanctions:
– remark;
– reprimand;
– warning about incomplete job compliance;
– release from the civil service position being filled;
– dismissal from the civil service for cause. For each disciplinary offense, only one disciplinary sanction can be applied.
Before applying disciplinary action, the employer's representative must request an explanation in writing from the civil servant. If a civil servant refuses to give such an explanation, a corresponding act is drawn up. The refusal of a civil servant to give an explanation in writing is not an obstacle to applying a disciplinary sanction.
Before applying a disciplinary sanction, an internal review is carried out.
When applying a disciplinary sanction, the severity of the disciplinary offense committed by a civil servant, the degree of his guilt, the circumstances under which the disciplinary offense was committed, and the previous results of the civil servant performing his official duties are taken into account.
A disciplinary sanction is applied immediately after the discovery of a disciplinary offense, but no later than one month from the date of its discovery, not counting the period of temporary incapacity for work of a civil servant, his stay on vacation, other cases of his absence from service for good reasons, as well as the time of an internal inspection.
A disciplinary sanction cannot be applied later than six months from the date of commission of the disciplinary offense, and based on the results of an inspection of financial and economic activities or an audit - later than two years from the date of the commission of the disciplinary offense. The specified time limits do not include the time of criminal proceedings.
A civil servant has the right to appeal a disciplinary sanction in writing to the commission of a state body on official disputes or to court.
If within one year from the date of application of a disciplinary sanction a civil servant is not subject to a new disciplinary sanction, he is considered to have no disciplinary sanction.
Sample notification
How should a civil servant prevent the possibility of a personal problem arising in resolving a particular issue? To do this, he will need to write a notice of conflict of interest, an example of which can be filled out below.
The document must be drawn up in the name of the boss. The following is its title: “Notice of Conflict of Interest.” The text of the document indicates the last name, first name and patronymic of the civil servant, as well as his position. After this, a situation is described that provokes the possibility that a conflict of interest may arise. For example, it may concern the conclusion by an organization of contracts with a supplier company, headed by a close relative of the official. This is followed by the employee’s agreement or disagreement to be present during a meeting of the commission created to resolve this conflict of interest. At the bottom of the notification is the signature of the person who wrote it, as well as his full name and the date the document was compiled.
Let's consider typical situations and examples of conflicts of interest in the Russian civil service.
Ways to deal with conflicts of interest
Preventive method
Preventing the occurrence of conflicts of interest is the most effective way to combat this manifestation of corruption. An example of such a method is the refusal of a government official who has received an appointment to share in the capital of a company.
Information disclosure
Civil servants are required to regularly declare their property and income. This allows you to identify and prevent conflicts of interest.
Voluntary refusal to participate
Voluntary refusal to participate in the decision-making process related to the emergence of conflicts of interest. Such action may be prompted by general ethical considerations, professional ethics, or a prescribed legislative act (charter).
Monitoring by anti-corruption organizations and collegial bodies
In the civil service system, there is a Commission on compliance with the requirements for official conduct of civil servants and the resolution of conflicts of interest. In parallel, there are independent anti-corruption organizations that represent the interests of society and monitor the emergence of conflicts of interest.
Relationships with relatives
There are examples and situations of conflict of interest in the public service in the event of an official’s personal benefit. Thus, an employee can be directly involved in resolving personnel issues regarding his relatives. In addition to close people, we can also consider other persons in respect of whom the civil servant is likely to receive benefits. Let's look at examples of conflicts of interest in municipal service:
- An employee of a government agency is part of a competition commission that considers candidates for a vacant position in his institution. One of the contenders is his relative.
- The duties of a civil servant include the implementation of certain managerial functions or issues of making personnel decisions concerning relatives or other persons close to him.
- In such cases, it is mandatory to write a notice about the likelihood of a conflict of interest. In this regard, the employer's representative must remove such an employee from those duties that involve his interaction with close people.
How to prevent fraud?
Accounting activities also control the size of the VIP (time production costs). In other words, these are the costs associated with the production of certain goods for transactions. If the VIP is raised to a level higher than desired, the enterprise may lose profits due to the loss of profitable deals. In this case, the chief accountant must signal the inappropriateness of using the company's resources.
For example, if the chief accountant is a close relative of one of the employees, whose official position allows him to create opportunities for conducting transactions for the purpose of making a profit, a conflict of interest arises. In this case, there is a risk that accounting activities will be subject to a negative impact on its quality, and fraud may occur.
The accounting component is just one of the options for using your official position to satisfy your interests or make a profit, of which there are many.
Performing other work subject to payment
An example of a conflict of interest in the public service is a situation when an official, as well as his relatives or other persons close to him, are going to perform or are already performing work for the organization where this employee works, under the terms of a paid civil law or other contract.
In this case, a notice of conflict of interest must also be drawn up. But at the same time, the employer’s representative does not have the right to indicate the impossibility of performing other work by this official.
An example of a conflict of interest in the public service is a situation where an employee, together with his relatives or other persons with whom beneficial interaction is carried out, performs work in a subsidiary, parent or other similar company in relation to which these employees perform managerial functions.
And in this case, a notification must be drawn up to the employer’s representative. In it, the civil servant must indicate the connections that take place between interacting organizations. The employer's representative, in accordance with the law, is recommended to remove the employee from fulfilling his duties in making management decisions in relation to the affiliated company.
An example of a conflict of interest in the civil service can be seen in a slightly different situation. It concerns the performance of work, the customer of which is the body in which the person holds a position. The employer's representative in this case must indicate the emergence of a conflict of interest. If a person does not take any measures to correct the problem, then he should be removed from the position he is replacing.
Ownership of certain securities
Let's consider other cases of conflict of interest. Examples in the service of state or municipal bodies may relate to the ownership by an employee and/or his relatives of securities belonging to this organization. This must also be notified in writing. In this case, the securities must be transferred to trust management. In addition, the issue of their alienation may be considered.
Examples of conflicts of interest may also relate to situations where a civil servant has deposits in banks or other credit institutions in relation to which he exercises managerial functions. In this case, you will also need to write a notice of personal interest addressed to your immediate superior. Until the necessary measures are taken, the employee must be suspended from performing those official duties that relate to working with banks and credit organizations.
Special Considerations
Conflicts of interest can lead to legal consequences as well as loss of employment. However, if there is a perceived conflict of interest and the person has not yet acted maliciously, it is possible to remove that person from a situation or decision in which a conflict of interest may arise. Using the previous example of a board member who owns a trucking company, they could simply refuse all decisions that could positively or negatively impact their personal business.
Receiving services and gifts
It is also possible that a civil servant or his relatives receive various benefits. These could be discounts and loans, free services, payment of travel expenses, entertainment, etc.
Such gifts, if they are provided by organizations or individuals in relation to which the civil servant currently exercises or previously exercised managerial functions, are subject to a growing conflict of interest. To avoid such a situation, it is recommended to simply not accept these benefits. If the employer’s representative becomes aware of the receipt of gifts by a civil servant, he must assess the connection of what was received with the performance of the official duties assigned to the employee, and, if necessary, take disciplinary action.
What is a Conflict of Interest?
A conflict of interest occurs when a legal entity or individual becomes untrustworthy due to a conflict between personal (or selfish) interests and professional duties or responsibilities. Such a conflict occurs when a company or person has a vested interest—such as money, status, knowledge, relationships, or reputation—that calls into question whether their actions, judgments, and/or decision-making can be impartial. When this situation arises, the parties are usually asked to leave, and this is often required by law.
Key points
- A conflict of interest occurs when a person's or entity's proprietary interests call into question whether their actions, judgments, and/or decision-making can be impartial.
- In business, a conflict of interest occurs when a person chooses personal gain over the responsibilities of his employer or organization in which he is a stakeholder, or in some way uses his position for personal gain.
- Conflicts of interest often have legal implications.
The sphere of education
In addition to public service, examples of conflicts of interest can be given in school. This applies to situations where a teacher, in parallel with his work activities, provides paid services.
The legislator seeks to combat such a situation when a teacher teaches a student who is studying at the school that is the place of work of this teacher. As a result of such actions, a conflict of interests arises in education. Examples of the provision of such paid services can be found everywhere. At the same time, some teachers artificially create situations in which the children’s parents or their legal representatives are forced to agree to the provision of tutoring imposed on them. Sometimes colleagues “supply” such students to each other. At the same time, they use the principle “you - to me, and I - to you.”
It is worth understanding that the law does not prohibit the provision of paid educational services. They can be provided by the school on a contractual basis. In this case, the teacher who conducts a regular lesson with the child, according to the curriculum, may well provide paid services. That is, this can be done legally only by being a representative of the contractor when concluding contractual obligations.
In what cases do the services provided by a teacher violate the norms of current legislation? This happens when the following conditions are met:
- the service provided by the teacher is informal and paid;
- the student is studying in the educational organization where the tutor works;
- the provision of a paid service becomes the cause of a conflict of interest for the teacher.
If all the above conditions are met, additional training does not comply with legal requirements and is prohibited. This also applies to those cases when the teacher does not teach a particular student. Indeed, in this case it is impossible to prove the absence of collusion among teaching staff.
A conflict of interest in the field of education is the contradiction that arises between professional responsibilities and a person’s personal benefit. After all, upon arriving at school, a teacher is faced with the possibility of acquiring material or intangible benefits. This is the reason for his failure to fulfill his professional duties or their improper performance.
