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 ?
One of the central features of all municipal conflict of interest legislation is that it creates an onus on the elected or appointed officials to continuously reassess their situation in relation to existing conflict of interest rules.
The scope and breadth of legislation on conflict of interest in Atlantic Canada varies from one jurisdiction to the other.
Only elected officials are therefore subject to the conflict of interest provision in Prince Edward Island since the core municipal acts are silent regarding appointed officials.
In Newfoundland and Labrador, Section 207 of the Municipalities Act, 1999, provides for conflict of interest of members of council.
As in Prince Edward Island, only elected officials are subject to conflict of interest provisions.
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.
In addition to requiring awardees to manage conflict of interest and reviewing such conflict as necessary, NSF sets policies for and manages its own internal conflict of interest disclosures.
NSF's internal procedures have three key tools to assist in managing potential conflict of interest issues: (a) mandatory annual training for employees, (b) mandatory annual reporting, and (c) a disclosure process for employees and reviewers.
Employees may be required to disclose financial interests, familial ties, and commitments that might raise conflict of interest issues.
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.

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