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When working in the business world, one is inclined to encounter instances where professional interests or professional and personal interests clash with each other, causing an inability for a person or company to operate smoothly. Such an instance is referred to as a conflict of interest and usually occurs when conflicting spheres come into contact with each other such as in the legal profession when a firm's clients come into conflict with one another. Such an occurrence can make it difficult for one to impartially perform duties associated with their work as they may in some way be affected by the outcome associated with the conflict.
Also, conflicts of interest can be dangerous as they may be illegal if a specific person or company is intentionally benefiting from the conflict. Sometimes this may lead to the person or companies facing legal prosecution. This is especially prevalent in the legal profession in instances when a firm takes on two clients that are at odds with one another, creating a circumstance in which the firm could benefit greatly by playing the two clients off one another. Another detrimental effect of conflict of interest occurs when a business becomes partnered with or takes over another company that is a competitor to one already partnered with the business. Such an incident can have detrimental effects on the progress of the business by causing counterproductive actions and confusion. Due to the damaging effects of conflict of interest, one should actively work to avoid such an instance. There are a variety of ways in which conflicts of interest can be prevented, the most important being to thoroughly research potential clients, employees and companies. Specifically for those in the legal profession, any connections between existing and prospective clients should be investigated so as to prevent conflict. Generally, companies prevent a conflict of interest between personal and business by creating a code of ethics that does not allow for extraprofessional relationships within the office. Such a code might also apply to client/lawyer, doctor/patient and other relationships of that nature. Not allowing for such relationships significantly reduces the chance of a conflict of interest. Once a conflict of interest has already occurred, it is still possible to avoid the consequences related to it. A recusal may be obtained, allowing for the company or person facing the conflict to abstain from participating in the conflict. An example of this would be a lawyer involved in a court case that would in some way affect their personal life or a board member who is in some way affiliated with a person being considered for employment. In both of these instances the person experiencing the conflict should provide substantial evidence of being involved in such a conflict and would then be granted a recusal. If a recusal cannot be obtained or is not conducive to the circumstances, a third party may become involved to regulate between the person or company involved and the person or company affected. This may be necessary when a person or company makes a proposal to a person or group that is in some way influenced by those making the proposal. In this situation a third party may be brought in to make the necessary decision impartially. By implementing these or other methods, one will greatly reduce the detrimental consequences associated with conflicts of interest. NOTE: This article is not intended to convey legal advice. If you have questions regarding conflict of interest, please consult the licensed attorney of your choice. |
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