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Managing a known conflict of interest

A conflict of interest policy and set of procedures, with an associated training regime, is important for any organisation to successfully manage an individual with a known conflict of interest. The policy should specify when and how to declare private interests that could conflict with public duties (which should be kept on a central conflict of interest register – typically by a human resources unit), as well as documenting how conflicts of interest should be managed.

The precise mix of options for managing a conflict of interest will vary from case-to-case, but most involve one of the “six Rs”:

Strategy What this strategy means When is it most suitable

Register

Details of a conflict are formally registered.

All conflicts of interest should be registered, but registration may also be suitable as the sole management option for very low-risk conflicts and where recording it is sufficient to maintain transparency.

Restrict

Restrictions are placed on the individual’s involvement in part or all of a matter or process.

When the individual can be effectively separated from parts of the activity or process, and the conflict of interest is unlikely to arise frequently.

Recruit

Recruit a disinterested third-party to oversee part or all of the process that deals with the matter.

When it is not feasible or desirable for the individual to be removed from the decision-making process, and in small or isolated communities where the individual’s expertise is necessary and genuinely not easily replaced.

Remove

The individual is completely removed from the matter.

For ongoing serious conflicts of interest, where restriction or recruitment of others is not practical.

Relinquish

The individual relinquishes the private interest creating conflict.

Where the individual’s private interest is incompatible with their public duty.

Resign

The individual resigns from his/her position.

When no other options are workable or the individual cannot or will not relinquish the conflicting private interest or where this course is preferred as a matter of personal principle.

The decision about which option to select should not be undertaken by the public official who is conflicted; instead, selecting a conflict of interest management option should be undertaken by an appropriate manager or senior executive within the agency.

Managers should periodically monitor whether an employee is complying with a conflict of interest undertaking. In the case of local councillors, council staff and delegates of councils, the Model Code of Conduct for Local Councils in NSW contains specific provisions relating to conflict of interest management options. In the case of public sector employees and heads of government sector agencies, the Code of Ethics and Conduct for NSW government sector employees by the Public Service Commission contains various options for managing conflicts of interest.