conflict of interest

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Conflict of Interest

A term used to describe the situation in which a public official or fiduciary who, contrary to the obligation and absolute duty to act for the benefit of the public or a designated individual, exploits the relationship for personal benefit, typically pecuniary.

In certain relationships, individuals or the general public place their trust and confidence in someone to act in their best interests. When an individual has the responsibility to represent another person—whether as administrator, attorney, executor, government official, or trustee—a clash between professional obligations and personal interests arises if the individual tries to perform that duty while at the same time trying to achieve personal gain. The appearance of a conflict of interest is present if there is a potential for the personal interests of an individual to clash with fiduciary duties, such as when a client has his or her attorney commence an action against a company in which the attorney is the majority stockholder.

Incompatibility of professional duties and personal interests has led Congress and many state legislatures to enact statutes defining conduct that constitutes a conflict of interest and specifying the sanctions for violations. A member of a profession who has been involved in a conflict of interest might be subject to disciplinary proceedings before the body that granted permission to practice that profession.

Cross-references

Attorney Misconduct; Ethics, Legal.

conflict of interest

n. a situation in which a person has a duty to more than one person or organization, but cannot do justice to the actual or potentially adverse interests of both parties. This includes when an individual's personal interests or concerns are inconsistent with the best for a customer, or when a public official's personal interests are contrary to his/her loyalty to public business. An attorney, an accountant, a business adviser or realtor cannot represent two parties in a dispute and must avoid even the appearance of conflict. He/she may not join with a client in business without making full disclosure of his/her potential conflicts, he/she must avoid commingling funds with the client, and never, never take a position adverse to the customer.

conflict of interest

noun conflict, divergent interrsts between clients, ethical breach, prohibiting acceptance or retention of a case, variance of interest between clients
Associated concepts: code of professional responsibility
See also: disagreement
References in periodicals archive ?
Ali members of municipal councils, members of local boards, and senior appointed officers must disclose any conflict of interest between their personal affairs or businesses and matters considered by the council or local board of which they are members.
Only one of these amendments affected the conflict of interest framework, but with adverse results as will be explained later.
The Municipal Conflict of Interest Act covers a broad range of elected and appointed officials as in New Brunswick.
Since 2000, Service Nova Scotia and Municipal Relations has published a comprehensive manual that includes both a code of ethics and a set of conflict of interest guidelines for those under its jurisdiction called the Local Government Resource Handbook.
The defining feature of the conflict of interest provision in Prince Edward Island is its blatant insufficiency to provide for a modern world where conflictual interests can easily confront any elected official and, for that matter, any appointed official.
On 23 May 1989, however, in a remarkable display of leadership that spoke eloquently to the perceived need for ethical standards, the Federation of Prince Edward Island Municipalities took the initiative of adopting conflict of interest guidelines for municipal officials, elected and appointed, which were broadly tailored on the Alberta model.
the regular increase in cases, both at provincial and federal levels, where charges of conflict of interest had been levelled against elected officials.
It is interesting to note that there is a split between what NSF does internally to manage its own conflict of interest and what it requires of its awardees, since it only requires awardees to disclose significant financial interests.
The DAEO reviews these annual employee disclosures and has the authority to make decisions regarding conflict of interest within NSF.
The conflict of interest allegations we have investigated have covered a wide range of issues, including officials' failure to safeguard the system by failing either to have or to enforce a COI policy, the receipt of gifts or honoraria, perceived conflicts with regard to mail and panel reviewers, undisclosed financial interests, and violation of post employment restrictions.
Managing conflict of interest issues is becoming increasingly complex.
Author's Note: Earlier this year, the NSF'S Office of Inspector General conducted a review of the results of conflict of interest investigations our office received from 1989 through 2001.

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