An Example Essay on Conflicts of Interest

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Essay on Conflicts of Interest

Example Essay on Conflicts of Interest

Conflict of interest, financial, relational, and competitive, has become a bedeviling issue in most corporate organizations, with the public service included.  Many top executives have violated ethical codes and policies in return for personal benefits in deference to the laws of the country they operate in and legal standards. Conflict of interest is often possible when the organization does not have concrete policies addressing such or when the operational framework has leeway that the top executives or employees can leverage.

This paper will review the conflict of interest case against Siemens AG operation in Nigeria and the Nigerian public office holders involved to ascertain if the laws and policies on conflict of interest are sufficient, what regulatory bodies and managers can do to discourage unethical practices and how the laws can be improved for better acceptability.

Conflict of interest burdens employees and employers morally (Okunriboye, 2017). It is first and foremost a social vice that degrades an organization’s ethical conduct and moral fortitude, giving the employees leeway to operate outside the acceptable norm while positioning the organization in a place of administrative weakness (Inyang, 2017).

Conflict of interest naturally erodes the level of professionalism expected of organizations. When there are expectations of a forward operational approach, what is obtainable is a skewed, selfish, personal and destructive transactional approach.

Conflict of interest has been a significant issue in Nigerian organizations; from governmental public office holders who collect funds for projects and fix them in private accounts for the expected interest (Eyisi, 2019).

To the senior parastatals directors who choose to use their offices for personal enrichment (Azubuike, 2005) and finally to the private organizations whose managers are increasingly violating the code of ethics policies and getting more involved in the conflict of interest cases at the detriment of their organizations.

In 2006, there was a governmental audit into the international operations of Siemens AG in Nigeria. Two of its management staff were indicted on bribery, unethical conduct, and conflict of interest (Blanc et al., 2019). Before then, Siemens was known for its technological products and reliable telecommunication services in Nigeria.

The company has permanently enshrined in its operational framework the need to maintain the highest ethical and legal standards applicable to the OECD (2005) guidelines, irrespective of which laws guide its international operations. Within the ethical conduct of Siemens AG was the revised OECD directive “No employee may directly or indirectly offer or grant unjustified advantages to others in connection with business dealings, neither in monetary form nor as some other advantage.”

When the news, therefore, came out in 2007 that some Siemens top managers had bribed some government officials, which included a federal minister, a Senator, and other top officials, in order to be given the contract for the upgrade of the own Nigerian NITEL and MTEL telecommunication network, it was unbelievable based on the perceived ethical stance of Siemens.

This was more so unacceptable considering the code of Conduct Bureau stipulates that a public officer shall not put himself in a position where his interest conflicts with his duties and responsibilities (LawNigeria, 1991), so how could the Senator be culpable in the conflict of interest case (Senator Jubril Aminu) have violated the code of conduct stipulation.

Both the Nigerian constitution and the Senate Regulatory Laws eschew conflict of interest; hence it was legally unacceptable that Siemens could have financially gratified a senator in return for the award of telecommunication contracts. The Audit Committee Institute Nigeria has initially moved to tackle conflict of interest in companies at the level of the board, management, staff, and other stakeholders within the organization; hence it was a case of reverence.

On the part of Siemens AG, its managers had committed a competitive conflict of interest; they had positioned themselves favorably to be awarded the profitable NITEL telecommunication upgrade contract against the required fairness from all competitors.

However, on the government officials involved in the conflict of interest case, it was more of an induced financial conflict of interest since it involved cash inducement with a subtle relational edge as the basis of considering Siemens AG was built on their relationship with the company (Blanc et al., 2019).

According to the Code of Conduct Tribunal (Law Nigeria, 1991), the policies guiding public officers include: Serving the public interest: They are expected to maintain and strengthen the public’s trust and confidence by demonstrating the highest standards of professional competence, efficiency, and effectiveness, upholding the constitution and the laws, and seeking to advance the public good at all times.

This implies that they should not be involved in any conflict of interest. Transparency and accountability: They are expected to use powers and resources for the public good per the law and government policy.

They should be prepared to be accountable for their decisions and to justify their official decisions and actions to a relevant authority, or publicly, as appropriate in the circumstances; hence, financial gratifications as a form of conflict of interest is unacceptable. Integrity: They are expected to make decisions and act without considering their private interests.

Public service is a public trust, improperly using a public service position for private advantage is regarded as a serious breach of professional integrity. This does not conform to the acceptance of financial inducement when making decisions. Fairness:

They should make official decisions and take action fairly and equitably, without being affected by bias or personal prejudice, taking into account only the merits of the matter and respecting the rights of affected citizens. This does not permit conflict of interest as fairness considers all parties without favor or prejudice.

Within organizations and public services, regulatory bodies sanction unethical behaviors; hence managers and the government can discourage conflict of interest through audits and training. 

When employees are aware that there will be audits into their operation, they will tend to avoid anything that could find them wanting in terms of unethical practices, such as conflict of interest; multinational companies tend to avoid unethical practices in foreign operations when they notice that their activities will be audited in the home country (Hock, 2017).

While employees and government officials cannot claim to be ignorant of the laws and sanctions applicable to unethical practices, they need to be continually inundated with the necessities of their offices and avoid conflict of interest via consistent training and review of the organization’s policies.

The top managers need to be role models of policies being instilled in the employees because, in the case of Siemens AG and the Nigerian top public officer holders, their supervising managers were found privy to such underhand dealings (Berghoff, 2017). While laws and policies are supposed to guide the code of conduct of employees, and the organization in general, the correct interpretation and implementation of such laws and policies make them effective.

Given that Siemens AG had laws and policies in place to address conflict of interest, the policies were not implemented nor enforced in its foreign operations, giving leeway to the company’s managers’ flaws (Islam et al., 2018).

The laws and policies are not stand-alone. There is a need for regulatory bodies to constantly audit and review the accuracy and applicability of such laws within organizations for them to be adequate.

Employees will naturally resist or truncate laws and policies that do not positively contribute to their well-being (Inyang, 2017). Hence, for laws and policies to appeal to employees, they need to be involved in the formulation process; they need to see the policies as being considerate and a safeguard of potential issues they may be involved in.

The organization must also paint scenic pictures of what happens when such policies and laws are violated while openly punishing offenders and violators. Organizations can also add compliance with ethical codes and policies to employee appraisals such that employees get rewarded for avoiding conflicts of interest, having spelled out the flexibility applied to any potential conflict while maintaining an ethical culture.

Foreign government and regulatory bodies still have a significant role in enforcing laws and policies in contrast to conflict of interest. While organizations, such as Siemens AG, can publicly claim to be ethical, their books and operational conducts need to be reviewed and audited from time to time to ascertain conformance. At the same time, commensurate sanctions and penalties are placed on violators (Blanc et al., 2019).

Organizations and their employees also need to understand that continued operation depends on stakeholders’ perception of their ethical conduct, corporate culture, and conflict of interest avoidance. Hence, to maintain competitive advantage, laws, and policies to safeguard against unethical practices and conflict of interest must be put in place and enshrined in the organization’s corporate culture.

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