What Is the Meaning of Conflict of Interest?

The Supreme Court: supremely impartial, or playground for politics?

A conflict of interest refers to a situation where a person's public decisions are improperly influenced by his private affiliations or interests. The most common scenario where conflicts of interest are relevant is when a public official's neutrality is potentially compromised by his private interests (in a position that legally demands someone to be wholly impartial).

The Basics

Everyone has interests. You care about your family and friends, and want to help them. You'd like to save up for a vacation to Southeast Asia. You want to invest in an internet startup and reap hefty rewards. There is nothing wrong with such aspirations per se, or even basing your personal or financial decisions on them--for most individuals. This is because, for most people, personal goals and professional duties usually remain separate, and rarely present agendas that conflict one another. However, it's not uncommon to face a potential conflict of interest in a professional setting.

It's Not Who You are, it's What You do

Let's say you're already employed by an Internet company. If that appealing startup seeks to provide a competing product or service, you may need to rethink your investment. Having a conflict of interest does not necessarily constitute a wrongdoing on its own; everyone faces such conflicts at some point. It's what you do to ameliorate a conflict, as soon as you discover one, that matters. If you knowingly proceed with investing in the startup, your employer may discover your financial conflict of interest--and rethink your employment.

Great Power: Great Responsibility

People in positions of authority need to meet higher standards of professional impartiality, to varying degrees, depending on the nature of their position. Usually, the credibility of a corporate or governmental office is dependent on fair hiring or election practices, transparent budgeting and impartiality when entering contracts. For a person in a corporate position, impartiality may be an ethical responsibility, but may or may not be illegal. If an executive hires his brother for a high-profile job, this may be regarded a conflict of interest, but it's usually up to the company's Board of Directors to decide if punishment is called for (or not). For lawyers and government officials, however, an unresolved conflict of interest can result in legal sanctions, disbarment or impeachment from office.

Disclosure

Individuals in public office are expected to maintain the highest degree of impartiality. The best way to resolve a conflict of interest is to prevent one in the first place. Accordingly, since officials' most common conflicts of interest are financial ones, entry to public office is contingent on full disclosure of one's financial attachments. Judges and elected officials are required to complete lengthy disclosure forms prior to taking office, and are expected to resign from corporate positions that might compromise their impartiality. Nominees for the Supreme Court undergo a particularly intense and public vetting process before their confirmation by the Senate.

Recusal

Despite these precautions, conflicts of interest still can and do arise for officials in office. If a public official finds herself in a personal or financial conflict of interest, she is expected to remove herself from any relevant vote or decision in advance. This is called a "recusal." If a Senator is set to vote on a compromising bill, such as one to regulate a corporation that used to employ her, it is her responsibility to recuse herself from voting. If a judge is slated to deliberate on a relative's case, he is expected to recuse himself as well, so that another judge may replace him. Still, many conflicts of interest are difficult to detect, allege and properly enforce against. Likewise, many persist, even in government positions.

References

• The Free Dictionary: Legal Dictionary
• US Legal: Recusal Law & Legal Definition