The employee who runs their own business directly competing with their employer, or the manager of a retail store who buys produce from a relative at an elevated price, are both clear examples of ethical misconduct where the interest of the company is not paramount.
But what about a situation which maybe more complex?
Take for example the following: an employee shares information in an interview with a potential employer about your activities or plans as the current employer.
The employee is hired based on this revelation and it results in your company losing valuable business. It seems obvious that there was an ethical breach.
But could someone no longer under your employ be held liable for this breach?
Was the situation preventable?
Conflicts of interest can occur within most work environments. They are defined as any circumstance, relation or arrangement whether intentional or accidental, that presently does or might in the future, serve to tempt a person to pursue or promote interests contrary to those of the persons’ employer.
Of course, this definition could describe a plethora of situations and there are in fact endless circumstances which could characterize a conflict of interest.
What is important is that both employers and employees understand the concepts underlying conflicts of interest and be cognizant of actions that could surmount this behaviour.
Further, employers must be proactive rather than reactive in addressing the issue.
Loyalty is an implied promise by employee to employer and where it can be proven that this implied term has been breached an employer may have grounds to seek recourse; the onus will of course be on the employer to prove that the breach is in fact plausible or did in fact occur.
Where a breach of this nature is proven, whilst the employee is still employed with the organization it could be grounds for termination, subject to the adherence of internal and legislated disciplinary procedures.
Frankly, an ethical person will know that the example shows an employee giving something valuable that belongs to their employer to someone who they are seeking something valuable from.
Surely, this sounds like placing their interests above the employer’s interests, and in fact trading one for the other.
However, as wisely stated by a management guru, “perspective is a function of position”.
The employee will see the opportunity which lies ahead and unless there is a known preventative barrier, much consideration will not be given to the potential carnage they will leave behind.
How then can companies be proactive in preventing conflict of interest breaches?
Including explicit and sometimes detailed non-compete and conflict of interest clauses within contracts of employment or requisite policy documents is the first step.
Written terms and conditions are the soundest preventative barriers, although they may not always stop the behaviour from occurring, they do provide a solid basis on which employers can proceed with terminations and/or seek legal recourse where the need arises.
The more sensitive an organization’s information the more detailed the clauses may need to be. It is also important to take into consideration the role and the nature of the employee’s job.
For example, an employee supplying customer quotes and interfacing with the majority of your customer base, is essentially aware of some of the most confidential information within your organization.
These types of considerations should be a guide in shaping the content of your conflict of interest clauses and may also determine how stringent an employer may need to be.
On this point, it is noteworthy to mention that some employers have recognized the need to offer some flexibility to their employees.
Organizations have policies which allow for the operation of businesses and/or the delivery of services within the same sector, subject to approval from management.
This type of hybrid clause or policy is discretionary and may in some instances promulgate a culture of trust and even greater commitment between employer and employee.
However, one caution is that they may necessitate a lot more policing than strict policies.
Conflicts of interest, actual or perceived can cause great harm to a company’s finances and/or reputation. It is not a remote possibility that a conflict of interest may somehow come into your work life; in truth, it is inevitability that, sooner or later, an employee or you will be faced with a decision or opportunity that presents a conflict of interest at work that could cause you great harm.
Considerable care and attention must be given to avoiding and preventing conflicts of interest, and to appropriately addressing them should they arise.
