I suggested to Dan that he had invited two
suppliers to his wedding who each gave
him a kickback. Dan insisted that the gifts
were out of the goodness of their hearts.
It took an hour of discussion for Dan to
recognize the conflict and agree to return
the money. A note on the wedding invitation
would have avoided the problem: “Given
our business relationship, gifts would
be inappropriate. Hope to see you at the
A competing interest involving a personal
benefit can be most tempting. A position of
influence often comes with opportunities
for inappropriate gain, but abusing power
for your own benefit is the quickest way
to ruin your reputation. For example, The
Board of Directors of Enron suspended its
conflict of interest rules to allow their CFO,
Andrew Fastow, to establish and operate off-balance-sheet entities at a handsome profit.
What were they thinking? Even though the
Board and the company auditors said it was
okay, we recognize that it was absolutely
not okay. As a result, Mr. Fastow went to
jail. From this example, we are reminded
that Board directors cannot be rubber
stamps for management. They must exercise
Questions to Consider When a
Conflict is Recognized
Upon realizing that there is a conflict of
interest at hand, what are the next steps? Try
to focus on the following questions:
• Are there clear rules?
As an example, some organizations
have clear rules that spouses cannot
work in the same department. When
that situation arises, transfers are
made to meet the mutual needs of the
organization and the employee. Another
tricky area is dealing with friendships,
which are usually good in business.
Friendships build rapport, trust and
loyalty. However, close relationships also
increase the risk of favoritism, back-scratching and exclusion of others.
These potential dangers must be
faced with openness, honesty and
transparency. Gifting is another issue
of noteworthy concern because it raises
ethical issues. Most governments have
a particularly clear rule about giving
ETHICAL DILEMMAS 13 Upcoming articles in this series will take
a closer look at each dilemma.
STANDING UP TO POWER
Someone in power is asking you to do something
MADE A PROMISE
Conflicting commitments force you to choose.
You see something wrong. How do you proceed?
CONFLICTS OF INTEREST
Multiple roles put you at cross purposes.
SUSPICIONS WITHOUT ENOUGH EVIDENCE
You believe something is going on, but you’re not sure.
Achieving justice but by doing something unethical.
SKIRTING THE RULES
Bending a rule for a better outcome.
Misrepresenting the truth for better outcome.
Giving up ethical stance to protect valued relationship.
SACRIFICING PERSONAL VALUES
Living ethically might put burden on others.
When opportunity exists to wield an unfair upper hand.
When you are responsible for a mistake.
You could grant forgiveness, but you don’t know
if you should.