The public has been conditioned to think that conflict-of-interest issues only apply to politicians and other government officials held to high ethical standards. But the truth is that these issues are relevant to every workplace and affect all employers and employees.
Whenever an employee finds themselves in a situation where their interests are at odds with their allegiance to their employer, it is considered a conflict of interest. While most employees will thankfully never engage in bribery or other forms of illegal behaviour for their own personal gain, they may one day come to an ethical crossroads and not know whether to turn left or right because they don’t understand the principles of conflict of interest.
Some examples of situations where there may be a conflict of interest:
— A supervisor begins dating an employee who reports directly to him.
— An employee starts a side company to provide similar services for similar clients as those of her main employer.
— A manager gives a family member or close friend a contract over a more qualified or more favourably priced vendor.
— A member of the board of directors accepts fees or provides professional advice to a direct competitor of the company on whose board she sits.
In short, a conflict of interest arises when an individual’s personal interests (or those of their family or a business associate) sway their workplace decisions and impair their ability to act in the best interests of the organization. Because of the risk such conflict poses to a company’s reputation, employers have a responsibility for ensuring employees understand the ethical standards by which they must abide.
The Conference Board of Canada states that to plan effectively for reputational risk management, organizations should take steps to create and maintain a culture of integrity. One way to do this is by developing a code of conduct.
A code of conduct is a governing policy that clearly outlines the expectations for all employees. It should clearly state the desirable actions, decisions and behaviours that the organization deems to be ethical and acceptable. If your organization employs a significant number of people, you may want to develop an overall code of conduct and then separate codes to guide smaller programs or departments. Before developing a code of conduct, consider these tips:
Identify key behaviours needed to adhere to the ethical values of your organization. Include values derived from your governing laws and regulations as well as the behaviours needed to deliver your products and services, to address current workplace issues and to reach strategic goals.
Indicate that all employees are expected to conform to the specified behaviours. Be sure to add wording to this effect and include where they can direct any questions.
Review the code with key members of the organization. If applicable, have your legal department review the draft to ensure all practices are in accordance with policies.
Distribute and discuss the document with all employees. It is important to ensure everyone has a copy and that it is posted in an accessible area in each department. No employee should be able to say, “But I didn’t know that was wrong” to excuse intolerable behaviour. It is a good idea to have employees sign a code of conduct acknowledgement form on an annual basis. This can be done in conjunction with another annual event such as salary reviews.
Realize that no code of conduct is perfect, and must be reviewed and updated regularly. There is simply no way to cover all the preferred behaviours for every possible ethical dilemma that might arise in the workplace. You should include things like avoiding conflict of interest, maintaining confidentiality, not accepting personal gifts from stakeholders, refraining from alcohol and drugs, complying with laws, not using work property or information for personal gain and reporting illegal or immoral activity. However, it is essential to update your code of conduct regularly to keep it relevant and to be sure to include examples of ethically sensitive behaviour that is specific to your organization.
Develop a whistleblower policy. This policy is to provide direction to employees, the public, contractors, etc., regarding the communication of concerns on questionable financial or operational matters within the organization. The policy should ideally allow for concerns to be submitted anonymously by email or toll-free telephone call.
Fortunately, very few employees will ever seriously breach their workplace ethics. But that doesn’t change the fact that they are regularly faced with decisions that test their values, integrity and character. While having a guiding code of conduct in place is a smart thing to do, it is ultimately the personal values and moral standards of each individual hired by the organization that says the most about who they are and speak the loudest through their behaviour at work.
— With reporting by Barbara Chabai
Colleen Coates, CHRP, CCP, is a practice leader with People First HR Services Ltd. She can be contacted at email@example.com.
Republished from the Winnipeg Free Press print edition April 23, 2011 H1