Understanding conflicts of interest

A clear and practical description of what a conflict of interest is to help public officers and authorities

Understanding what a conflict of interest is and what is likely to give rise to one helps public authorities and public officers to identify and manage them. 

Note: In this guide, ‘public officers’ covers those employed by a public authority and board and committee members.

Conflicts of interest

Conflicts of interest arise where public officers have personal interests that could conflict, or be seen to conflict, with their public duties.

A conflict exists when a reasonable person might perceive that an officer’s personal interests could be favoured over their public duties.

Conflicts of interest can be:

  • direct – a form of conflict that arises from an officer’s personal interests
  • indirect – a form of conflict that arises from personal interests of individuals or groups that the officer associates with.

Conflicts of interest can be further categorised as:

  • actual – where an officer’s personal interests and public duties conflict; it is happening now and needs to be declared and managed
  • potential – where the conflict between an officer’s personal interest and public duty is likely to occur in the future
  • perceived – where a reasonable third party could form a view that personal interests could improperly influence the officer’s decisions now or in the future, whether or not this is in fact the case.

Personal interests

Personal interests that could conflict with an officer’s public duties include but are not limited to:

  • personal relationships (for example, relative or friend)
  • business interests (for example, owning shares, investments or property)
  • memberships and affiliations (for example, being a member of a club, society or association)
  • secondary employment (for example, working for yourself or another employer)
  • receiving or providing gifts, benefits and hospitality (for example, from an authority’s stakeholder). 

Other interests

In some cases, conflicts of interest may be created by an officer having more than one official role. For example, in addition to their principal role an officer is also required to sit on the board of a statutory authority that their authority has some responsibility for. In these situations it may be difficult to keep the roles separate.

Points to consider with a conflict of roles:

  • The officer needs to understand their obligations to each role.
  • Both authorities need to be clear about the officer’s obligations to each.
  • The officer needs to be alert to situations where the interests of the 2 authorities might conflict and the options for managing these. 
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