Conflict of interest. What it is and how to solve it.

Have you ever been the victim of a conflict of interest? Or, on the other hand, have you been in a conflict of interest without realizing it? It’s possible, as this concept is not so well known, at least not by the people in the private sector; the majority of such conflicts are prevalent in the public office.

In what follows, we will define this phenomenon and we’ll attempt to offer some solutions for it. 

What is a conflict of interest? 

A conflict of interest in the Penal Code is defined as: an act of a public servant who has obtained a patrimonial gain due to his office responsibilities, either directly or indirectly, for himself or for his relatives, or for another person with whom he had a working or commercial relationship in the last five years. This is punishable by serving between one and five years in prison and dismissal of the right of ever occupying public office again. 

However, there is a vast array of such examples, from conflicts of interest in public acquisitions, to conflicts of interest of lawyers, and as a result we’ll require a more comprehensive definition. 

In short, a conflict of interest appears when the interests of the subject (who can be a public or private person) influence or could influence the way in which he fulfills his official duties. 

Types of conflicts of interest 

There are three types of conflicts of interest, as follows:

• Potential conflict of interest, in which case there is a possibility that the personal interest of the subject will lead to a conflict of interest. In this situation the harm isn’t done yet, but we must account for the possibility. The person who faces a potential conflict of interest will not be sanctioned legally or disciplinary, but measures may be taken in order to ensure that the possibility does not become a reality; 
• Real conflict of interest, when the subject is asked to complete any action that pertains to his or his personal friends interests. If his relations with these people are patrimonial in nature and may influence the impartial completion of his duties, then the subject should abstain from completing any action and declare the situation in writing in three days time to his hierarchical superior;
• Consummated conflict of interest, meaning already accomplishing an action in which the subject or his personal friends had a personal interest, thus failing to hold public office objectively and impartially. 

Necessary steps in order to solve conflict of interest 

If you are facing or suspecting that you are facing a conflict of interest, it will be necessary to contract specialized services that will help you fix the issue. In what follows, we will suggest a few necessary steps in order to prevent and solve conflicts of interest in a public or private company:

• Before offering a key position to an employee or closing a partnership, you should first start investigations such as background checks in order to discover if the person or persons under scrutiny are in a potential conflict of interest; 
• Within the company detail as much as possible what are the actions or activities that might be regarded as conflicts of interest and organize courses on this topic, courses that should aim toward preventing such situations; 
• Identify internally and externally what factors might lead to conflicts of interest;
• Implement internal management strategies in order to minimise the risk of conflicts of interest. For example, in each department you could appoint specific people who will supervise employee activity and approve the projects they undertake; 
• Decide on the consequences that the employee/employees/managers will have to face if an undeclared conflict of interest is discovered. 

There is only one policy when faced with a conflict of interest: transparency! 

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