Open conflict

03 March 2022

Tags: Speak Up, Code of Ethics , Training

Read the latest network blog by Mark Chambers, IBE's Associate Director (Governance).

Managing potentially conflicting interests is part of life. Many of the decisions we make on a daily basis (how loud to play our music, whether the gap in the traffic is wide enough for us to pull out, who gets off a crowded train first) involve a subliminal balancing of our interests with those of others as we seek to find a way through our day that keeps everyone more or less happy.

Conflicts of interest are also part of our working lives, and managing those conflicts is a foundation element of most ethics and compliance programmes. The process of handling conflicts in a company needs to distinguish between actual conflicts (such as individuals having links to a competitor through a close relative), potential conflicts that may arise as a result of a particular situation (such as close links to a potential supplier during a tender process) and situations that do not represent a conflict. This requires identifying relationships, investments and other external interests that might give rise to a conflict.

Tracking potential conflicts also needs to extend to identifying and addressing areas where there is a risk of even a perceived conflict of interest (such as a family member applying for a role in another part of the business). If not managed well, even the impression of a conflict can in itself lead to significant reputational harm. 

Potential conflicts can arise in a wide range of circumstances relating to social and family connections. Personal relationships generate some of the most difficult situations. Even if workplace romances in themselves do not involve improper or corrupt behaviour, they can lead to expenses fraud as colleagues seek to spend time together. Mitigating conflict risks requires sensitivity and good judgement, and it is important that those judgement calls are made consistently and fairly. 

We talked with a group of ethics practitioners from our largest supporters to discuss the continuous effort that is required to manage and mitigate the potential impact of conflicts of interest and to share some of the challenges, suggestions and successes. 

Some of the themes we discussed were:

  • Managing conflicts well requires a culture of openness. Individuals need to be trusting in sharing details about their lives outside work and other colleagues need to be confident that raising concerns will be welcomed and dealt with appropriately, without any adverse consequences for them in speaking up when things they see just don’t feel right
  • Conflicts sit well in codes of ethics. For conflict situations that don’t involve wrongdoing, an ethical approach will be needed when deciding on the right mitigating action. Framing the decision in the context of the company’s ethical values should drive consistency. A compliance mindset may result in a poor outcome
  • Managing conflicts has to go beyond the process of recording relevant outside interests. Managers need training to help ensure that they and their teams disclose the right things in the register of interests, to help identify potential situational conflicts as they arise and to encourage the atmosphere of trust that is required
  • Since many conflict situations involve ambiguity and uncertainty, using scenarios in the training is a helpful way of generating the types of discussion that are needed. It also helps managers understand the background information required to make a good decision as to the right mitigating actions to take
  • It is important that a consistent approach is taken with the board. Often it is a different team managing the process for non-executive directors (the secretariat rather than the ethics and compliance practitioners), but the more complex nature of their portfolio relationships, their seniority and their involvement in everything that is significant for the business means that the reputational risks around a potential conflict are high
  • Cultural differences are highly significant, particularly for those businesses that operate in countries where second jobs are the norm
  • Individuals may well be reluctant to declare personal relationships that have developed at work. In countries where same sex relationships are unlawful, it will be vital to frame the declarations that are requested from colleagues in a way that asks for no more detail than is absolutely necessary (the existence of a relationship rather than its nature, for example)
  • Conflict management shouldn’t be restricted to internal processes and has an important role to play in wider stakeholder management. Helping clients and suppliers identify and manage conflicts helps maintain the integrity of the overall process 
  • Establishing a consistent view of what might amount to a conflict is vital. There are some helpful external frameworks that, even if not directly applicable to your business, can help. The US Federal Acquisition Regulations, for example, highlight biased ground rules, impaired objectivity and unequal access to information as red flags when assessing conflicts for government contractors
  • Systems (whether an off the shelf solution or developed in house) can help support the management of the process, allowing data to be better managed and interrogated, assisting workflows, prompting alerts and generating the reporting needed to provide assurance as to the programme’s effectiveness

It was clear from our discussion that a commitment to identifying, tracking and managing conflicts well requires a significant investment of resources. It is important to make the case for investment in training and systems in terms of risks that have been mitigated or avoided. Securing senior level support is essential. 

Doing this well not only mitigates reputational risk but provides another lens on the organisation. External benchmarking is difficult and of potentially limited value, but internal benchmarking on training take up, speak up reports and other indicators of how well conflicts are being managed can be another vital triangulation point in identifying areas of the business where things don’t feel right. 


Mark Chambers
Mark Chambers

Associate Director - Governance

Mark brings 30 years of experience from a successful career in business to help grow the IBE’s interaction with boards, regulators and policy makers.

After graduating in Zoology from Oxford University, Mark re-trained as a lawyer and spent his early years at Slaughter and May in their London and New York offices before moving into business. During his career, he managed world-class global functions responsible for governance, legal and regulatory risk management in large, complex, regulated businesses. He was General Counsel & Group Company Secretary at RSA Insurance Group and at Worldpay Group, and held senior positions at American Express and GE Capital. He retired as Deputy Group Company Secretary of HSBC in 2018 to pursue a second career, which also includes non-executive and advisory work. 

For many years, Mark has had a successful career as a non-executive director. He is a member of the board of the Care Quality Commission, the independent regulator of health and social care in England, and chairs their Regulatory Governance Committee. He is also a non-trustee member of the Audit and Risk Committee of Maggie’s.

Previous roles included the Chair role at Amref Health Africa and Audit Committee Chair at WWF, where he also led the Committee that oversaw the development of the charity's exemplar new headquarters building. Mark was a finalist in the 2014 Sunday Times Non-Executive of the Year Awards.

The truth of the matter is that you always know the right thing to do. The hard part is doing it. – General H. Norman Schwarzkopf

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