Managing conflict of interest
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Transcript of Managing conflict of interest
Managing Conflict of Interest
By Prof. Waswa Balunywa
By Prof. Waswa Balunywa 2
Paper Format
• The challenge• Cases: International and Local• What is COI?• Managing COI• Is Management of COI good for business• Conditions of successful management of COI
By Prof. Waswa Balunywa 3
The Challenges
• You do it , you are doomed• You don’ t do it you are doomedA challenge of good governance
By Prof. Waswa Balunywa 4
Why the Challenges?
• Public sector use funds for the general public in form of taxes.
• There is need for accountability• Accountability demands transparency• Transparency demands competition• Competition creates equity
By Prof. Waswa Balunywa 5
Challenges of Good Governance
Good governance requires:-• Transparency• Competition• Accountability• Participation• EquityMore urgent in public sector
By Prof. Waswa Balunywa 6
Cases
International cases:• Enron• Lesson of the Baring Bank, Singapore• Arthur Andersen• World comFrench President giving job to his son
By Prof. Waswa Balunywa 7
World Com
By Prof. Waswa Balunywa 8
Local Cases
• A director supplying goods to a company where he is in position to influence decision.
• Government officer supplies goods to their own department.
• Sitting on a Committee to interview your blood relations
By Prof. Waswa Balunywa 9
Levels of Governance
National levelThe state of governance of national affairs
Corporate OrganizationsThe state of governance in corporate affairs especially business organizations.
By Prof. Waswa Balunywa 10
What is COI?
• Is when public officers are using public assets for private gain
• Taking advantage of position or knowledge to influence an outcome that is beneficial to you.
• Abuse of office.• COI is a governance matter• COI is an issue of corruption.
By Prof. Waswa Balunywa 11
Major Areas of COI
• Conduct of public officials• Conduct of trustees• Conduct of Management of public limited
companies• Public procurement practices• Management of public finances
By Prof. Waswa Balunywa 12
Consequences of COI
• Enrichment of individuals• Diversion of resources to private use• Public not getting benefits intended for it• Reduces competition• Reduces equity• Reduces levels of service• May kill organizations
By Prof. Waswa Balunywa 13
Managing COI
COI is a governance matter and has to be managed not fought.
Managed through:• Preventing it from occurring• Enforcing Rules of Behaviour• Establishing code of conduct for public officers• Legislate framework e.g. Leadership code
By Prof. Waswa Balunywa 14
Managing COI- Cont’d
• Establish offices of obudsman e.g. IGG• Restriction of post employment of retired
public officers.
By Prof. Waswa Balunywa 15
Enforcement of Rules
• Asset Registrar for Leaders• Protect whistle blowers• Courts• IGGs
By Prof. Waswa Balunywa 16
In Corporations
Preventive Measures:• Establish code of conduct• Legislation on Directorship• Accounting standards• Strengthening audit
By Prof. Waswa Balunywa 17
Enforcement
• Empower enforcement agencies• Educate public about benefits• Ability to see through decision• No politicization
By Prof. Waswa Balunywa 18
Challenges of Managing COI
At national level:• Lack of political will• Lack of agreement by key players on principles
and practices of COI• Cultural issues• Tribes and religions• Weaknesses in enforcement• Backward economy
By Prof. Waswa Balunywa 19
Challenges of Managing COI- Cont’d
• Lack of strong Institutions– Accountants Regulatory Body– Stock exchange Rules and Regulations– IGG’s office: leadership Code
By Prof. Waswa Balunywa 20
Challenges of Enforcement at corporate Level
• Weak economy• Absence of formal management culture • Domination of economy by unlisted
companies• Inability to professionalize management and
entrepreneurship• Business and ethics issues
By Prof. Waswa Balunywa 21
Is Management of COI Good for Business?
Yes it is:• Promotes equity• Encourages joint stock business• Encourages professionalism in business and
management• Strengthens business and the economy
By Prof. Waswa Balunywa 22
Conditions of Successful Management of COI
• Effective political leadership• Strong legal framework• An independent press• Professional issues in Management,
Entrepreneurship, Accountancy, Audit• Clear rules on the duties of politicians and officials• Accountability at all levels in government• Enforceable laws• Strong institutions
By Prof. Waswa Balunywa 23
End Note
• How are you faring as an individual?