Conflict of Interest

(redirected from conflicts of interest)
Also found in: Dictionary, Thesaurus, Medical, Financial, Idioms, Wikipedia.

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.

West's Encyclopedia of American Law, edition 2. Copyright 2008 The Gale Group, Inc. All rights reserved.

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.

Copyright © 1981-2005 by Gerald N. Hill and Kathleen T. Hill. All Right reserved.
References in periodicals archive ?
Conflicts of interests are considered corruption-a serious matter for all concerned.
"Communication" is an important safeguard to help ACE conflicts of interest and involves the three D's--disclosure, decisions, and documentation.
<B Welsh Government failed to manage conflicts of interest involving a firm that had PS810k for the construction of a wind turbine, the auditor general has concluded Christopher Furlong
EXHIBIT 1 Examples of Conflicts of Interest for CPAs in Public Practice * Providing corporate finance services to a client seeking to acquire one of the firm's audit clients when the firm has obtained confidential information during the course of the audit that may be relevant to the transaction.
Gareth Murphy, added: "The identification of conflicts of interest is a key step to ensuring that client detriment does not occur.
"A manager should ensure that it has internal arrangements to manage and mitigate conflicts of interest, and this should include documented compliance policies and procedures (e.g.
Conflicts of interest are also common among brokers.
As with many aspects of business, conflicts of interest need to be managed.
The report shows that $707 billion in regulatory assets under management (RAUM) are managed by consultants who say they have one more conflicts of interest. This compares to $498.2 billion in assets managed by investment consultants who are free of conflicts of interest.
health care system is becoming increasingly compromised as conflicts of interest tempt physicians away from their primary duty of providing health care determined by the needs of the patient.
The ombudsman also recommends that the Commission modify the declaration of activities of a prospective special adviser to obtain more information about his or her outside activities to enable a proper examination of potential conflicts of interest.
The key requirement of any conflicts system is to be able to quickly and reliably search a range of data sources and given the capabilities of the solution, which is used widely throughout the practice on a daily basis, it made sense to use it for our conflicts of interest checking solution."