Conflict of Interest
When a politician, lawyer, or anyone else in a position of authority has personal interests that may directly affect his professional ethics when it comes to doing a certain task, this is known as a conflict of interest. For example, if a district attorney is called upon to prosecute a case where the defendant is a close friend or relative, this is construed as a conflict of interest, and the district attorney needs to excuse himself from the case. When there is a conflict of interest, the outcome of a trial, as transaction, or a certain professional project can be tainted. Personal bias or a personal agenda can take the objectivity away from a task or project, and this can translate to an outcome that might not be fair to all parties.
Even if the authority figure who is engaged in a project is being completely unbiased and objective, just the fact that there could be a conflict of interest is enough to contaminate a situation. In the case of a district attorney, a trial that comes out in favor of the defendant, despite the best efforts and dedication of the prosecutor, may be considered a mistrial if it is proven that there was a possible conflict of interest.
In a corporate situation, it is considered a conflict of interest if an employee, usually an executive, sways a decision that will benefit him or her personally. Perhaps an executive in a company owns stock in a certain hotel chain, and the company is trying to decide which hotel chain they would like to contract with for traveling employees. The executive with stock in a certain hotel chain should not be involved in the decision because of conflict of interest.
Obviously, conflict of interest cannot be avoided in all cases, and is certainly not always cause for concern. A family-owned company will probably encounter cases of conflict of interest, due simply to the particular dynamics of the company. Depending on the circumstances, conflict of interest cannot always be avoided, and it is up to the key individuals involved to decide whether or not it will really be a problem. In legal and political situations, there are usually strict rules guidelines to follow, and not adhering to these rules and guidelines could actually result in legal complications. In a corporate setting, however, if all parties involved, including shareholders in some cases, agree that the conflict will not pose a problem and will not result in an unfair decision or outcome, they can set their own guidelines. In some cases it is a legal decision, but in other cases it is a moral decision that is strictly up to the parties involved.