Conflict of Interest in the Public Sector

Due to the publicity public-sector employees can generate, every leader, manager, and supervisor should have a clear idea of what is and is not a conflict of interest. An organization should also have a clear decision-making process for determining what is and is not a conflict based upon a careful and complete discussion.

The best way to get started is to create a policy for your handbook, and then train to that policy. You may want to use our sample public-sector policy as a first step:

Our Organization requires that employees protect Organization information and avoid outside activities or relationships, which do or could adversely influence their decisions or actions on the job. Conflict of interest situations, which could arise while moonlighting for a competitor of ours, should also be avoided.

Examples of conflicts of interest include serving as a board member or director of a competing firm, holding financial interest in a competing organization, or being self-employed in an occupation that competes with the organization. Other examples include ownership, partnership, or personal involvement in supplier companies or distribution outlets related to organization business.

Employees concerned about a potential conflict of interest should discuss the matter with their supervisor. If it remains unresolved, the organization’s leader should make a final determination.

Next, be sure to follow your state’s laws. Some states, like California, provide documents to governmental entities for this purpose. For other states, seek information from the secretary of state or research it yourself. Of course, we are here to help if you need research in this area.

These laws exist to prevent private economic interests from interfering with the faithful discharge of public duties:

  • Arizona laws address conducting business when a public-sector employee may benefit from that business.
  • Colorado has a constitutional provision mandating that employees not accept gifts in excess of $50 from anyone in the private sector.
  • Utah has the Public Officers’ and Employees’ Ethics Act, which sets standards of conduct for officers and employees of the state of Utah and its political subdivisions to address actual or potential conflicts of interest.
  • Finally, Wyoming’s conflict of interest statute does not allow public servants to request or receive any pecuniary benefit, other than lawful compensation, on any contract, unless there is proper disclosure and a withdrawal from participation.

Once you have a general policy in place and understand the law you must follow, determine the process for dealing with conflicts of interest in your workplace and where they could arise. As a final step, train supervisors and managers to understand what laws the organization must follow and what decision process to use.