What is a conflict of Interest?

C. I. writes:

Dear Paul: What is a conflict of interest?

Paul replies:

Dear C.I.: A conflict of interest occurs when the personal interest of a condo director takes precedence over the interest of condo owners. If a director derives a personal benefit from an action in which she has decision making authority or can influence the decision-making process, the director is in conflict. When a director personally benefits by virtue of his position, he is in conflict. At first glance, one would think that because a director is also a condo owner that all directors will constantly be in a conflict, but this is not the case. A director is in conflict when he benefits as an individual, not as part of the condo community.

Conflicts of interest come in many forms. Some examples include:

  • Special treatment (e.g. hiring, promoting or working with someone connected to the director)
  • Receiving gifts or kickbacks
  • Using condo property for personal benefit (e.g. stealing common room supplies, borrowing tools)
  • Giving confidential information to competitors or using it to start another business

In an attempt to avoid the negative repercussions that usually accompany ignoring a conflict of interest, a director must follow the Condominium Act that states that a director must disclose a conflict of interest at a board meeting; it must be recorded in the minutes, and he must not attend any meeting where the conflicting matter is discussed.

A Conflict of Interest is closely associated with ethical behaviour. In its most basic form, ethical behaviour is knowing the difference between right and wrong and choosing to do the right thing. Directors must ask themselves if they are acting for the benefit of the community or their own personal concerns.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.