Conflicts of Interest and Corruption

Jean-Pierre Méan

By Jean-Pierre Méan 
Published on Tuesday September 4, 2018

 

The Commission on Corporate Responsibility and Anti-Corruption of the International Chamber of Commerce (ICC) has recently published Guidelines on Conflicts of Interest in Enterprises.

These guidelines, as well as other publications of the ICC, are particularly interesting because they reflect the consensus of a large number of experts and organizations from the business community. In this respect, the business world appears to have been and to remain at the forefront of fighting corruption, ahead of many states parties to the OECD Convention or the United Nations Convention against Corruption.

Conflicts of interest arise when the interests of a person called to represent another (such as an employee, director, agent or representative) diverge from the interest of his/her employer or principal. As long as the conflict of interest situation is a mere unexploited potentiality it is not problematic; however, it becomes so when this person succumbs to the temptation to give his/her own interest precedence over that of the person or organization to whom he/she owes his/her loyalty. Whereas in a typical bribery situation, an advantage is granted to a third party by a person in power, in an actual conflict of interest that person grants the advantage to him/herself or to his/her relatives or friends. The exploitation of a conflict of interest thus qualifies as a kind of self-service bribery.

Because potential conflicts of interest can develop into actual ones, they should be disclosed and recorded and the conflicted individual should recuse him/herself from involvement in any matter where his/her judgment may be influenced. It is prudent to err on the side of caution in this area and to closely manage such situations. Indeed, too many examples illustrate how a decision made by a conflicted person or a person merely perceived to be conflicted may badly impact the reputation of an organization and the morale of that organization’s personnel, in addition to possible legal implications.

The ICC Guidelines explore the various situations in which conflicts of interest, potential or actual, may arise. They include examples of such situations and provide guidance on preventing conflicts of interest, on managing and mitigating them as well as on communication and training and what to include in a Conflicts of Interest Policy. They are complemented by scenarios illustrating conflicts of interest situations and proposing measures to address them. They are a valuable tool for practitioners. Although they can be used by organizations of all sizes, a simplified version for SMEs would be welcome.

 

 

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