Basil Jarrett | The problematic conflict of interest

Conflict of interest. It sounds simple enough, right? But I strongly believe that a part of the reason that Jamaica has such a high corruption index is because many of us just don’t fully understand the term, what it means and why it is so dangerous. In its simplest form, a conflict of interest exists when a public official has a private interest, which could improperly influence the performance of his or her official duties. In other words, a government official who owns a construction company, for example, allows his company to bid for a contract where he is either one of the persons making the award or has some influence over who receives it.

SELF-INTEREST

Human beings are just that, human. And so it is only natural that personal self-interest can undermine a person’s impartiality in the execution of his or her professional or public duties. Unless you are Mother Teresa herself or possess similarly high levels of sainthood, it is extremely difficult to objectively disregard self-interest.

And it’s not only in government that a conflict of interest exists, or can be problematic. Private individuals can also find themselves in situations where they have access to information that isn’t in the public domain, giving them a competitive advantage over those of us who don’t. Think Martha Stewart who, before 2004, was more famous for making bed linen and crockery than smoking weed with Snoop Dogg on their cooking show. Stewart was convicted for insider trading which allowed her to avoid a US$45,000 loss on a pharmaceutical stock that was about to tank. Stewart had ‘insider information’ of internal decisions which would affect the company negatively, and so she jettisoned over 4,000 shares of the stock before the announcement was made publicly. Stewart ended up serving about 10 months in prison for the crime, where I imagine is where she met Snoop and the two hit it off, presumably in a West Virginia prison yard.

Now the keen-eyed among us will say that technically, Stewart wasn’t convicted of insider trading, but was actually found guilty of lying to federal officials, conspiracy and obstruction of justice, but the point remains.

I use this example because some people struggle to see what Stewart did wrong here. What else could she have done? Take the high road and not act on the information that would have saved her $45,000? It’s a tough call. To come back home to Jamaica now, the problem is just as complicated, because the persons who know most about an industry are usually the ones best qualified to serve on government boards where their expertise is required. Those persons may also have external private interests that stand to benefit from the very decisions that the board or entity makes.

And there are many other examples of conflict of interest, as outlined on the Office of the Services Commission’s website. A conflict of interest may be deemed to exist where an individual engages in private activity similar to official functions, or where he exploits his status and privileges for private gain. Soliciting and/or accepting payment and/or any other consideration relating to the performance of, or neglect of, official duties may also be considered a conflict of interest, as is conducting private business during work hours and/or on government property. So too is engaging in transactions with relatives or family members, or with an organisation in which relatives or family members have an interest. And to demonstrate just how complicated this is, I’m here thinking that I myself may have violated a few of these principles back in my day, like the time I sat and filled out an online application for my private benefit, using the Government’s computer, while on the Government’s time. That’s probably why the words ‘may constitute’ are so commonly used; because conflict of interest isn’t always so clear. The OSC even ensures that it makes it very clear that the eight points of possible conflict of interest are not exhaustive, and numerous other circumstances may also give rise to a conflict of interest.

A MORAL, ETHICAL, LEGAL MINEFIELD

So how does one navigate this moral, ethical and legal minefield? Well, a good place to start is by first removing yourself from the situation altogether. Even if someone is not attempting to benefit from a possible conflict of interest situation, it is equally important that a conflict of interest does not appear to exist. The very presence of the individual in the room or at the decision-making table may raise doubts about the authenticity and objectivity of the process. In such a case, the individual is morally, ethically and sometimes legally bound to recuse himself or herself from the process and declaring that they have a self-serving material interest in the matter at hand. Another option may be to avoid the situation entirely by declining the position in the first place, especially if the conflict is clearly going to reoccur repeatedly in the future. Or one may take action from the opposite perspective and dispose of competing or conflicting private interests by either resigning from the private position, selling its shares and/or resigning from the board. I can’t tell you how many lucrative offers I’ve had to walk away from simply because of conflict of interest, and because it’s the right thing to do. Some of those decisions were agonising, especially when you consider that everybody else seems to be fine doing it. But it was the right thing to do then, and still is now. Conflict of interest is one of the greyest areas of human interaction, with the line between right and wrong being increasingly blurred each day. A third, and possibly the most important, way to help avoid conflict of interest is through education and awareness. Most persons genuinely cannot distinguish a conflict of interest, or see how dangerous or problematic it can be. We all grew up viewing having ‘links’ and ‘contacts’ as something to aspire to; and to some extent it is. What we haven’t quite got is a clear guide as to where to draw the line. Whether formally in our school system, informally through public education and awareness or standardised as part of HR on-boarding procedures, we perhaps need to take a more active approach to solving the problem.

Major Basil Jarrett is a communications strategist and CEO of Artemis Consulting, a communications consulting firm specialising in crisis communications and reputation management. Send feedback to columns@gleanerjm.com.