Conflict of Interest

by Fernando Perfas

| Photo by Jake Slagle via Commons/Flickr

Conflict of interest is an ethical principle that is often taken for granted in business and professional practice. Wikipedia defines it as “a situation in which a person or organization is involved in multiple interests (financial, emotional, or otherwise), one of which could possibly corrupt the motivation of the individual or organization.”

Let us take the case of Mr. Sales as an example. Mr. Sales is the President of a fraternal brotherhood called the “Happy Hour Club,” Every last Friday of the month, club members enjoy a happy hour at the clubhouse with drinks paid for by the Club. It so happens that Mr. Sales is in the business of supplying liquor and beer to various establishments. The Club starts doing business with him to provide spirits for the Friday happy hour.

Another example: Mrs. Sulit is the Director of a Juvenile Home and oversees the social rehabilitation of several dozens of teens under her care. She decides to open a small canteen on the Home premises and hires some of the better-behaved youngsters as helpers. In return for their services, they get better food and some pocket money.

The above examples are so commonplace that we don’t think anything wrong about these practices. In fact, in our consciousness, they have become accepted and somehow expected. On the surface, they seem harmless and make good sense until someone finds out that Mr. Sales has been over-charging the Club for the drinks costs, and Mrs. Sulit overworking and refusing to release her young employees when it comes time for them to leave and complete rehab.

Many organizational squabbles and bad practices can be traced to conflicts of interest that involve officers and members of organizations. In Philippine society, it is not unusual that several schemes perpetrated by different groups are going on simultaneously in an organization, often resulting in conflicts of interest. It is also not surprising that this ethical principle is not part of the vocabulary of most professional or organizational cultures. Mayroon kanya-kanyang diskarte, is an expression that captures this organizational culture. It means, “to each his own scheme.”

“Filipinos are not unique in their susceptibility to the corrupting influence of “conflict of interest” because there is an evolutionary psychological basis for this social behavior typical to humans. At the core of “conflict of interest” is “self-interest,” which is an automatic, unconscious process when weighing out one’s interest against that of others.”

Filipinos are not unique in their susceptibility to the corrupting influence of “conflict of interest” because there is an evolutionary psychological basis for this social behavior typical to humans. At the core of “conflict of interest” is “self-interest,” which is an automatic, unconscious process when weighing out one’s interest against that of others. Whereas considering others’ interests involves a more deliberate cognitive process, our knee-jerk reaction is to promote one’s self-interest when faced with the two choices. Moreover, some Filipino cultural values or norms contribute to elevating “conflict of interest” to another level.

Let us look at some Filipino cultural values and practices that counter the ethical principle of “conflict of interest” and render Filipinos vulnerable to ethical and moral lapses in professional or organizational practice. Foremost is utang na loob,” or debt of gratitude which occurs when one incurs a favor done by another person. Repaying such debt in kind exerts a more powerful social pressure than the restraining pull of ethics or even a moral code. Coming close behind, related to the Filipino cultural value of utang na loob are those of padrino and pakikisama. Padrino or sponsor comes in the form of an informal social contract based on non-blood-related kinship for the purpose of furthering mutual interest. Getting an influential person to be a son’s godfather is a common example. Pakikisama is based on two related social values of “showing a good face” and “living in harmony with others,” such that when someone asks favors or pakisuyo by virtue of one’s social position or power, one feels obliged to comply.

The crudest or corrupted form of the above values is lagay or bribe, which comes in cash or in-kind to facilitate a transaction. The social dynamics generated by organizational or professional behaviors under the behest of these cultural values have produced such common expressions as may kapit, malakas or palakasan, may kilala, or bata-bata.

“This commonly breached principle spawns bigger corruption problems, starting from simple nepotism to dynastic control of resources and political power.

The pervasive practice of lagayan or bribery, which comes in various shades that are involved in most business or social transactions, becomes the norm and bestows the appearance of social acceptability. When we need to do business, our immediate reaction is to find ways to grease the process to achieve what we want. For example, when someone needs to obtain a license from an agency, the question pops up without much thought is Sino ang kilala mo? “Who do you know in that office whom we can work with?”

In the face of all these, the ethical principle of “conflict of interest” seems incongruent or even outmoded in the Filipino business or professional culture. This commonly breached principle spawns bigger corruption problems, starting from simple nepotism to dynastic control of resources and political power.

The social habits that govern our informal daily life encroach into the formal world of business and governance, and we are oblivious of the boundaries between the two. How do we rid ourselves of corruption when our consciousness has been programmed by the forces we are trying to fight against?


ABOUT THE AUTHOR  Dr. Fernando B. Perfas is an addiction specialist who has written several books and articles on the subject. He currently provides training and consulting services to various government and non-government drug treatment agencies regarding drug treatment and prevention approaches. He can be reached at fbperfas@gmail.com.

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