Question

One of the constant dilemmas being faced by organizations is dealing with employees' Conflicts of Interest. Some Conflicts of Interest (COI) are severe enough to require laws to deal with them, others are dealt with more internally through organizational policies. COIs fall into certain categories including, financial, relational, and competitive/confidentiality and others depending on the nature of the organization.   

Examples of COIs in the workplace:

Rowan, K. (214, Apr 15). Conflict of Interest Examples: Avoiding Lawsuits in the Workplace. Udemy blog. Retrieved from: https://blog.udemy.com/conflict-of-interest-examples/

For this paper:

Pick an organization (public or private) and then choose a particular type of COI that is associated with this type of organization.

Locate and describe any laws that are designed to discourage or prevent this type of COI in your country. If there are no laws particular to the type of COI you chose, discuss why this is the case.

Locate examples of organizational policies used to also discourage the particular COI and discuss how the main features of the policy around the particular COI.

Discuss ways that managers can use both policy and the existing laws in your home country to discourage employees seeking their own interests over that of the employer.

In your estimation, do laws and policies help promote ethical behavior? Do you feel that the laws, as they are currently, are sufficient and effective?

Finally, suggest ways that the laws and/or policies could be improved to both motivate employees to pursue the interests of their employers, as well as to minimize the costs of employers complying with or enforcing the laws.

Answer 1

For the sake of this question, I have picked Bharti Enterprises. In this organization many of the services or activities are outsourced so if any employee has authority to outsource the work and that work he grants to some company or individual in which he also has stake in it then there is in obvious terms a conflict of interest.

However, in India, unfortunately there are no laws formulated till date to curb such conflict of interests in the private organizations. The Ministry of Corporate Affairs is the controlling authority of Private Limited Companies in India. However, neither the Companies Act 2013 nor any other statute spells out anything regarding such conflict of interests in private organizations. This is because, the affairs of private organizations are left to be managed by the individual companies on their own. The Ministry of Corporate Affairs through the Companies Act 2013 ensures macro management of the companies in India.

Bharti Enterprises has issued a Code of Conduct in which there is a particular section namely 'Dealing with Outside Parties' in which the section named Conflicts of Interests discourages such conflict of interests. The objective of the said policy is 'To prevent situations where personal interst of employees conflict with the interest of the Company. Situations may occur at work or outside with family members, or through personal relationships with other organisations.

Main features of the policy are:

• A conflict of interest may occur where the interest of benefit to an employee conflicts with the interest of the company
• The employee has to report conflicts of interest, whether present or potential to the immediate supervisor
• Avoid situations that may lead to a conflict of interest between the personal and professional relationships

DOs

• Inform the Company if you, or an immediate family member, has any significant interest in a Bharti supplier, customer, consultant or competitor
• Inform the Company if you serve as a Director or consultant with any company that does business with Bharti

DONT's

• Don't undertake any work, paid or unpaid, with an organization that competes with or provides services to Bhart

In the event there are no laws formulated by Government of India on conflict of interest, the managers have no option but to use only the internal document which is the Code of Conduct to ensure that the employees are discouraged to practice such conflicts of interests.

In my estimation the laws and policies do not help in promoting ethical behaviour but in some way help in curbing unethical behaviour as such laws and policies deter unethical practices in some way and to some extent. Without such laws and policies the unethical behaviours would remain untamed.

Following are some of the ways through which laws and policies can be improved to both motivate employees to pursue the interests of their employers, as well as to minimize the costs of employers complying with or enforcing the laws:

• Firstly, there should be complete background check through professionals in the field of the employees at the time of hiring so that there are no employees hired who have even a single track record of unethical practices
• Secondly, the new employee especially in the role where such unethical practices can become a part, should be asked to take an oath wherein he swears and promises to not to indulge in unethical practices.
• Thirdly, a well formulated reward and recognition scheme wherein employees are rewared for their honesty and integrity as well as for their compliance towards the Code of Conduct or any other policy for the time being in force.