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SignIn Advertisement in: Pageswithbrokenfilelinks,Protectedtemplates,Conflict,Professionalethics Conflictofinterest Viewsource History Talk(0) Assessment| Biopsychology| Comparative| Cognitive| Developmental| Language| Individualdifferences| Personality| Philosophy| Social| Methods| Statistics| Clinical| Educational| Industrial| Professionalitems| Worldpsychology| Socialpsychology: Altruism· Attribution· Attitudes· Conformity· Discrimination· Groups· Interpersonalrelations· Obedience· Prejudice· Norms· Perception· Index· Outline Thisarticleneedsrewritingtoenhanceitsrelevancetopsychologists..Pleasehelptoimprovethispageyourselfifyoucan.. Aconflictofinterest(COI)occurswhenanindividualororganizationisinvolvedinmultipleinterests,oneofwhichcouldpossiblycorrupttheirmotivationtoactappropriatelyfortheotherpartyandcausethemtoactintheirowninterestssothattheybenefitmaterially,sexually,personally,politicallyetc. Aconflictofinterestcanonlyexistifapersonortestimonyisentrustedwithsomeimpartiality;amodicumoftrustisnecessarytocreateit.Thepresenceofaconflictofinterestisindependentfromtheexecutionofimpropriety.Therefore,aconflictofinterestcanbediscoveredandvoluntarilydefusedbeforeanycorruptionoccurs. Contents 1Conflictsofinterestgenerally(unrelatedtothepracticeoflaw) 2Organizationalconflictofinterest 3Relationshiptomedicalresearch 4Typesofconflictsofinterests 5Examples 6Waystomitigateconflictsofinterests 6.1Removal 6.2Disclosure 6.3Recusal 6.4Third-partyevaluations 6.5Codesofethics 7Seealso 8References 9Externallinks 10Furtherreading Conflictsofinterestgenerally(unrelatedtothepracticeoflaw) SociologySocialNetworkAnalysisdiagramTheory ·History Positivism ·Antipositivism Functionalism ·Conflicttheory Middle-range ·Mathematical Criticaltheory ·Socialization Structureandagency Researchmethods Quantitative ·Qualitative Historical ·Computational Ethnographic Topics ·Subfields Cities ·Class ·Crime ·Culture Deviance ·Demography ·Education Economy ·Environment ·Family Gender ·Health ·Industry ·Internet Knowledge ·Law ·Medicine Politics ·Mobility ·Raceandethnicity Rationalization ·Religion ·Science Secularization ·Socialnetworks Socialpsychology ·Stratification vte [create]Documentation Moregenerally,conflictsofinterestcanbedefinedasanysituationinwhichanindividualorcorporation(eitherprivateorgovernmental)isinapositiontoexploitaprofessionalorofficialcapacityinsomewayfortheirpersonalorcorporatebenefit. Dependinguponthelaworrulesrelatedtoaparticularorganization,theexistenceofaconflictofinterestmaynot,inandofitself,beevidenceofwrongdoing.Infact,formanyprofessionals,itisvirtuallyimpossibletoavoidhavingconflictsofinterestfromtimetotime.Aconflictofinterestcan,however,becomealegalmatterforexamplewhenanindividualtries(and/orsucceedsin)influencingtheoutcomeofadecision,forpersonalbenefit.AdirectororexecutiveofacorporationwillbesubjecttolegalliabilityifaconflictofinterestbreacheshisDutyofLoyalty. Thereoftenisconfusionoverthesetwosituations.Someoneaccusedofaconflictofinterestmaydenythataconflictexistsbecausehe/shedidnotactimproperly.Infact,aconflictofinterestcanexisteveniftherearenoimproperactsasaresultofit.(Onewaytounderstandthisistousetheterm"conflictofroles".Apersonwithtworoles—anindividualwhoownsstockandisalsoagovernmentofficial,forexample—mayexperiencesituationswherethosetworolesconflict.Theconflictcanbemitigated—seebelow—butitstillexists.Inandofitself,havingtworolesisnotillegal,butthedifferingroleswillcertainlyprovideanincentiveforimproperactsinsomecircumstances.) Asanexample,inthesphereofbusinessandcontrol,accordingtotheInstituteofInternalAuditors: conflictofinterestisasituationinwhichaninternalauditor,whoisinapositionoftrust,hasacompetingprofessionalorpersonalinterest.Suchcompetinginterestscanmakeitdifficulttofulfillhisorherdutiesimpartially.Aconflictofinterestexistsevenifnounethicalorimproperactresults.Aconflictofinterestcancreateanappearanceofimproprietythatcanundermineconfidenceintheinternalauditor,theinternalauditactivity,andtheprofession.Aconflictofinterestcouldimpairanindividual'sabilitytoperformhisorherdutiesandresponsibilitiesobjectively.[1][2] Organizationalconflictofinterest Anorganizationalconflictofinterest(OCI)mayexistinthesamewayasdescribedabove,intherealmoftheprivatesectorprovidingservicestotheGovernment,whereacorporationprovidestwotypesofservicestotheGovernmentthathaveconflictinginterestorappearobjectionable(i.e.:manufacturingpartsandthenparticipatingonaselectioncommitteecomparingpartsmanufacturers).Corporationsmaydevelopsimpleorcomplexsystemstomitigatetheriskorperceivedriskofaconflictofinterest.Theserisksaretypicallyevaluatedbyagovernmentaloffice(forexample,inaUSGovernmentRFP)todeterminewhethertherisksposeasubstantialadvantagetotheprivateorganizationoverthecompetitionorwilldecreasetheoverallcompetitivenessinthebiddingprocess. Relationshiptomedicalresearch Theinfluenceofthepharmaceuticalindustryonmedicalresearchhasbeenamajorcauseforconcern.In2009astudyfoundthat"anumberofacademicinstitutions"donothaveclearguidelinesforrelationshipsbetweenInstitutionalReviewBoardsandindustry.[3] Typesofconflictsofinterests Thefollowingarethemostcommonformsofconflictsofinterests: Self-dealing,inwhichanofficialwhocontrolsanorganizationcausesittoenterintoatransactionwiththeofficial,orwithanotherorganizationthatbenefitstheofficial.Theofficialisonbothsidesofthe"deal." Outsideemployment,inwhichtheinterestsofonejobcontradictanother. Familyinterests,inwhichaspouse,child,orothercloserelativeisemployed(orappliesforemployment)orwheregoodsorservicesarepurchasedfromsucharelativeorafirmcontrolledbyarelative.Forthisreason,manyemploymentapplicationsaskifoneisrelatedtoacurrentemployee.Ifthisisthecase,therelativecouldthenrecusefromanyhiringdecisions.Abuseofthistypeofconflictofinterestiscallednepotism. Giftsfromfriendswhoalsodobusinesswiththepersonreceivingthegifts.(Suchgiftsmayincludenon-tangiblethingsofvaluesuchastransportationandlodging.) Pumpanddump,inwhichastockbrokerwhoownsasecurityartificiallyinflatesthepriceby"upgrading"itorspreadingrumors,sellsthesecurityandaddsshortposition,then"downgrades"thesecurityorspreadsnegativerumorstopushthepricedown. Otherimproperactsthataresometimesclassifiedasconflictsofinterestsareprobablybetterclassifiedelsewhere.Acceptingbribescanbeclassifiedascorruption;almosteveryoneinapositionofauthority,particularlypublicauthority,hasthepotentialforsuchwrongdoing.Similarly,useofgovernmentorcorporatepropertyorassetsforpersonaluseisfraud,andclassifyingthisasaconflictofinterestdoesnotimprovetheanalysisofthisproblem.Norshouldunauthorizeddistributionofconfidentialinformation,initself,beconsideredaconflictofinterest.Fortheseimproperacts,thereisnoinherentconflictofroles(seeabove),unlessbeinga(fallible)humanbeingratherthan(say)arobotinapositionofpowerorauthorityisconsideredtobeaconflict. COIissometimestermedcompetitionofinterestratherthan"conflict",emphasizingaconnotationofnaturalcompetitionbetweenvalidinterestsratherthanviolentconflictwithitsconnotationofvictimhoodandunfairaggression.Nevertheless,denotatively,thereistoomuchoverlapbetweenthetermstomakeanyobjectivedifferentiation. Examples Self-policingofanygroupisalsoaconflictofinterest.Ifanyorganization,suchasacorporationorgovernmentbureaucracy,isaskedtoeliminateunethicalbehaviorwithintheirowngroup,itmaybeintheirinterestintheshortruntoeliminatetheappearanceofunethicalbehavior,ratherthanthebehavioritself,bykeepinganyethicalbreacheshidden,insteadofexposingandcorrectingthem.Anexceptionoccurswhentheethicalbreachisalreadyknownbythepublic.Inthatcase,itcouldbeinthegroup'sinteresttoendtheethicalproblemtowhichthepublichasknowledge,butkeepremainingbreacheshidden. Insurancecompaniesretainclaimsadjusterstorepresenttheirinterestinadjustingclaims.Itisinthebestinterestoftheinsurancecompaniesthattheverysmallestsettlementisreachedwithitsclaimants.Basedontheadjuster'sexperienceandknowledgeoftheinsurancepolicyitisveryeasyfortheadjustertoconvinceanunknowingclaimanttosettleforlessthanwhattheymayotherwisebeentitledwhichcouldbealargersettlement.Thereisalwaysaverygoodchanceofaconflictofinteresttoexistwhenoneadjustertriestorepresentbothsidesofafinancialtransactionsuchasaninsuranceclaim.Thisproblemisexacerbatedwhentheclaimantistold,orbelieves,theinsurancecompany'sclaimsadjusterisfairandimpartialenoughtosatisfyboththeirsandtheinsurancecompany'sinterests.Thesetypesofconflictscouldbeeasilybeavoidedbytheuseofdisclosures. Apersonworkingastheequipmentpurchaserforacompanymaygetabonusproportionatetotheamounthe'sunderbudgetbyyearend.However,thisbecomesanincentiveforhimtopurchaseinexpensive,substandardequipment.Therefore,thisiscountertotheinterestsofthoseinhiscompanywhomustactuallyusetheequipment. Representatives,ingeneral,havedifferentintereststhantheirconstituents.Thus,acceptingbribestovoteacertainwayisintheirinterest(assumingtheydon'tgetcaught),whilenotintheirconstituents'interest.Theseactionsaresometimesillegal,butoftennot,asinthecaseofapoliticianacceptinglargeamountsofmoneyforapoliticalcampaign,andinreturn,grantingthecontributoraccesstopoliticalleaders.Thisisoftencitedasanargumentfordirectdemocracy(thereplacementofrepresentatives'voteswithreferenda). Revolvingdoor(politics),governmentworkersorelectedofficialsquittingpublicservicetoworkforthecompaniestheyusedtoregulate.Regulatorsareaccusedofusinginsideinformationfortheirnewemployers,orcompromisinglawsandregulationsinhopesofsecuringemploymentintheprivatesector. Waystomitigateconflictsofinterests Removal Thebestwaytohandleconflictsofinterestsistoavoidthementirely.Forexample,someoneelectedtopoliticalofficemightsellallcorporatestocksthattheyownbeforetakingoffice,andresignfromallcorporateboards.Orthatpersoncouldmovetheircorporatestockstoaspecialtrust,whichwouldbeauthorizedtobuyandsellwithoutdisclosuretotheowner.(Thisisreferredtoasa"blindtrust".)Withsuchatrust,sincethepoliticiandoesnotknowinwhichcompaniestheyhaveinvestments,thereshouldbenotemptationtoacttotheiradvantage. Disclosure Commonly,politiciansandhigh-rankinggovernmentofficialsarerequiredtodisclosefinancialinformation-assetssuchasstock,debtssuchasloans,and/orcorporatepositionsheld,typicallyannually.Toprotectprivacy(tosomeextent),financialfiguresareoftendisclosedinrangessuchas"$100,000to$500,000"and"over$2,000,000". Certainprofessionalsarerequiredeitherbyrulesrelatedtotheirprofessionalorganization,orbystatute,todiscloseanyactualorpotentialconflictsofinterest.Insomeinstances,thefailuretoprovidefulldisclosureisacrime. Recusal Thosewithaconflictofinterestareexpectedtorecusethemselvesfrom(i.e.,abstainfrom)decisionswheresuchaconflictexists.Theimperativeforrecusalvariesdependinguponthecircumstanceandprofession,eitherascommonsenseethics,codifiedethics,orbystatute.Forexample,ifthegoverningboardofagovernmentagencyisconsideringhiringaconsultingfirmforsometask,andonefirmbeingconsideredhas,asapartner,acloserelativeofoneoftheboard'smembers,thenthatboardmembershouldnotvoteonwhichfirmistobeselected.Infact,tominimizeanyconflict,theboardmembershouldnotparticipateinanywayinthedecision,includingdiscussions. Judgesaresupposedtorecusethemselvesfromcaseswhenpersonalconflictsofinterestmayarise.Forexample,ifajudgehasparticipatedinacasepreviouslyinsomeotherjudicialrolehe/sheisnotallowedtotrythatcase.Recusalisalsoexpectedwhenoneofthelawyersinacasemightbeaclosepersonalfriend,orwhentheoutcomeofthecasemightaffectthejudgedirectly,suchaswhetheracarmakerisobligedtorecallamodelthatajudgedrives.ThisisrequiredbylawunderContinentalcivillawsystemsandbytheRomeStatute,organiclawoftheInternationalCriminalCourt. Third-partyevaluations Considerasituationwheretheownerofamajorityofapubliclyheldcorporationdecidestobuyouttheminorityshareholdersandtakethecorporationprivate.Whatisafairprice?Obviouslyitisimproper(and,typically,illegal)forthemajorityownertosimplystateapriceandthenhavethe(majority-controlled)boardofdirectorsapprovethatprice.Whatistypicallydoneistohireanindependentfirm(athirdparty),well-qualifiedtoevaluatesuchmatters,tocalculatea"fairprice",whichisthenvotedonbytheminorityshareholders. Third-partyevaluationsmayalsobeusedasproofthattransactionswere,infact,fair("arm's-length").Forexample,acorporationthatleasesanofficebuildingthatisownedbytheCEOmightgetanindependentevaluationshowingwhatthemarketrateisforsuchleasesinthelocale,toaddresstheconflictofinterestthatexistsbetweenthefiduciarydutyoftheCEO(tothestockholders,bygettingthelowestrentpossible)andthepersonalinterestofthatCEO(tomaximizetheincomethattheCEOgetsfromowningthatofficebuildingbygettingthehighestrentpossible). Codesofethics Generally,codesofethicsforbidconflictsofinterests.Often,however,thespecificscanbecontroversial.Shouldtherapists,suchaspsychiatrists,beallowedtohaveextra-professionalrelationswithpatients,orex-patients?Shouldafacultymemberbeallowedtohaveanextra-professionalrelationshipwithastudent,andshouldthatdependonwhetherthestudentisinaclassof,orbeingadvisedby,thefacultymember? Codesofethicshelptominimizeproblemswithconflictsofinterestsbecausetheycanspellouttheextenttowhichsuchconflictsshouldbeavoided,andwhatthepartiesshoulddowheresuchconflictsarepermittedbyacodeofethics(disclosure,recusal,etc.).Thus,professionalscannotclaimthattheywereunawarethattheirimproperbehaviorwasunethical.Asimportantly,thethreatofdisciplinaryaction(forexample,alawyerbeingdisbarred)helpstominimizeunacceptableconflictsorimproperactswhenaconflictisunavoidable. Ascodesofethicscannotcoverallsituations,somegovernmentshaveestablishedanofficeoftheethicscommissioner.Ethicscommissionershouldbeappointedbythelegislatureandshouldreporttothelegislature. Seealso Conflictresolution Intra-householdbargaining Professionalclientsexualrelations Jurynullification Lobbying Medicalethics Moneyloop Moralhazard Roleconflicts Perverseincentive Professionalethics Politics UnitedStatesOfficeofGovernmentEthics References ↑1120-IndividualObjectivity.InstituteofInternalAuditors.URLaccessedonJuly7,2011. ↑Policies&ProceduresoftheInternalAuditActivity.CityCollegeofSanFrancisco.URLaccessedonJuly7,2011. ↑PoliciesregardingIRBmembers'industryrelationshipsoftenlacking. Externallinks Thacker,PaulD.(November2006).Environmentaljournalsfeelpressuretoadoptdisclosurerules.EnvironmentalScience&Technology40:6873–6875. McDonald,MichaelEthicsandConflictofInterest.W.MauriceYoungCentreforAppliedEthics. Furtherreading Davis,Michael;AndrewStark(2001).Conflictofinterestintheprofessions,Oxford:OxfordUniversityPress. Porter,RogerJ.;ThomasE.Malone(1992).Biomedicalresearch:collaborationandconflictofinterest,Baltimore:JohnsHopkinsUniversityPress. 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