Conflict of Interest (COI)
(Redirected from conflicts of interest)
A Conflict of Interest (COI) is a conflict that arises when an individual's personal interests potentially interfere with their professional duties, compromising impartiality and objectivity.
- AKA: Self-Dealing.
- Context:
- It can occur when a party to a contract has a personal or financial interest that could influence their decisions.
- It can undermine the fairness and integrity of contractual negotiations and outcomes.
- It can lead to legal disputes, contract voidance, or reputational damage if not properly managed.
- It can be mitigated through disclosure, recusal, or implementing strict ethical guidelines.
- It can involve situations where a party stands to benefit personally from decisions made in their professional capacity.
- It can result in regulatory scrutiny and penalties in industries with strict compliance requirements.
- It can range from being an Personal Conflict of Interest to being an Organizational Conflict of Interest (OCI).
- ...
- Example(s):
- A public official awarding a government contract to a company they own, leading to potential bias and unfair advantage.
- An employee negotiating a supplier agreement with a business owned by a close family member without disclosing the relationship.
- A consultant working for both a regulatory body and a company it regulates, potentially compromising impartial advice.
- A lawyer representing both parties in a contractual dispute, creating divided loyalties.
- ...
- Counter-Example(s):
- Arm's Length Transactions, where parties act independently without any relationship, ensuring unbiased agreements.
- Third-Party Mediation scenarios, where an impartial mediator facilitates contract negotiations to avoid conflicts.
- Blind Trust Arrangements, where individuals place personal assets under the control of an independent trustee to prevent conflicts.
- Ethical Wall policies, where firms implement safeguards to prevent confidential information from influencing business decisions.
- ...
- See: Arm's Length Transaction, Contract Ethical Guideline, Disclosure Requirements, Corporate Governance, Anti-Corruption Laws.
References
2024a
- (AcqNotes, 2024) ⇒ AcqNotes. (2024). "Organizational Conflict of Interest". In: AcqNotes.
- QUOTE: Organizational Conflict of Interest (OCI) means that because of other activities or relationships with other persons, a person is unable or potentially unable to render impartial assistance or advice to the Government, or the person's objectivity in performing the contract work is or might be otherwise impaired, or a person has an unfair competitive advantage.
2024b
- (Cain et al., 2024) ⇒ Cain, D. M., Loewenstein, G., & Moore, D. A. (2024). "The Psychology of Conflicts of Interest". In: Annual Review of Psychology.
- QUOTE: Conflict of interest (COI) occurs when professional judgment concerning a primary interest (such as a patient's welfare or the validity of research) tends to be unduly influenced by a secondary interest (such as financial gain). COIs are ubiquitous in professional life, and their psychological effects are often unconscious and unintentional.
Research on COIs has found that they can lead to biased judgments and decisions, even when decision-makers are explicitly instructed to be objective and are motivated to be so. This bias often operates through unconscious psychological processes, making it difficult for individuals to recognize and correct for its influence.
- QUOTE: Conflict of interest (COI) occurs when professional judgment concerning a primary interest (such as a patient's welfare or the validity of research) tends to be unduly influenced by a secondary interest (such as financial gain). COIs are ubiquitous in professional life, and their psychological effects are often unconscious and unintentional.
2024c
- (Indeed, 2024) ⇒ Indeed. (2024). "Conflict of Interest: Definition, Examples and Prevention". In: Indeed Career Guide.
- QUOTE: A conflict of interest happens when someone's personal interests could compromise their judgment, decisions or actions at work. This can occur in many professions, so learning more about conflicts can help you make the right choices at work. In general, a conflict might arise if you, a family member or a friend stands to benefit from decisions that you make at work.
2023a
- (Legal Dictionary, 2023) ⇒ Legal Dictionary. (2023). "Conflict of Interest". In: Legal Dictionary.
- QUOTE: A conflict of interest refers to a situation in which a person has a duty to more than one person or organization, and the duties that they owe to those people or entities are in opposition to one another. For example, a public official has a duty to act in the best interests of the public, but if they also have a financial interest in a company that stands to benefit from a decision they make as a public official, that creates a conflict.
2023
- (Thompson, 2023) ⇒ Thompson, D. F. (2023). "Conflict of Interest". In: Stanford Encyclopedia of Philosophy.
- QUOTE: A conflict of interest is a set of circumstances that creates a risk that professional judgment or actions regarding a primary interest will be unduly influenced by a secondary interest. Primary interests refer to the principal goals of the profession or activity, such as the protection of clients, the health of patients, the integrity of research, and the duties of public office. Secondary interests include not only financial gain but also such motives as the desire for professional advancement and the wish to do favors for family and friends.
The secondary interests are not treated as wrong in themselves, but become objectionable when they are believed to have greater weight than the primary interests. The conflict in a conflict of interest exists whether or not a particular individual is actually influenced by the secondary interest. It exists if the circumstances are reasonably believed (on the basis of past experience and objective evidence) to create a risk that decisions may be unduly influenced by secondary interests.
- QUOTE: A conflict of interest is a set of circumstances that creates a risk that professional judgment or actions regarding a primary interest will be unduly influenced by a secondary interest. Primary interests refer to the principal goals of the profession or activity, such as the protection of clients, the health of patients, the integrity of research, and the duties of public office. Secondary interests include not only financial gain but also such motives as the desire for professional advancement and the wish to do favors for family and friends.
2022a
- (Justia, 2022) ⇒ Justia. (2022). "Conflicts of Interest Contract Clauses". In: Justia.
- QUOTE: While employed by the Company, except as otherwise provided to the contrary herein, the Executive shall not, unless approved by the Board, or any Committee thereof, directly or indirectly: (a) participate as an individual, in any way, in the benefits of transactions with the Company, its suppliers, vendors, or customers, including, without limitation, having a financial interest in the Company's suppliers, vendors, or customers, or making loans to, or receiving loans, from, the Company's suppliers, vendors, or customers; (b) realize a personal gain or advantage from a transaction in which the Company has an interest or use information obtained in connection with the Executive's employment with the Company for the Executive'... s personal advantage or gain; or (c) accept any offer to serve as an officer, director, partner, consultant, manager with, or to be employed in a professional, medical, technical, or managerial capacity by, a Person which does business with the Company.
2022b
- (Lo & Field, 2022) ⇒ Lo, B., & Field, M. J. (Eds.). (2022). "Conflict of Interest in Medical Research, Education, and Practice". In: National Academies Press (US).
- QUOTE: Conflicts of interest affect more than research. Physicians have responsibilities to patients, and medical educators have responsibilities to students. In addition, physicians and researchers have responsibilities to the institutions with which they are affiliated. All these spheres involve special obligations that may be compromised by conflicts of interest.
Institutions that carry out medical research, medical education, or clinical care have their own conflicts of interest. For example, academic medical centers that conduct research involving their own students or patients have dual roles that may conflict. Institutions may also have financial interests related to human participants research, such as potential profits from discoveries, that may conflict with the responsible and ethical conduct of research.
- QUOTE: Conflicts of interest affect more than research. Physicians have responsibilities to patients, and medical educators have responsibilities to students. In addition, physicians and researchers have responsibilities to the institutions with which they are affiliated. All these spheres involve special obligations that may be compromised by conflicts of interest.