Professional Ethics in our Personal Life: Conflicts of Interest

Code of Ethics

Code of ethics

Most companies and professional organizations have a Code of Ethics that employees and members must follow. It is important to remember that many of those ethical guidelines we have at work and in our professional lives are also important for us outside of work. When individuals act contrary to a Code of Ethics in their personal lives, people can also get hurt – just as in our professional lives.

Conflict of interests

Most Codes of Ethics require the disclosure of potential conflicts of interests, which arise when a person may be influenced in their decision as a result of an interest that they have that is in conflict with the decision that they need to make for their company. Conflicts of interest are not just at work; they are in our personal life, too, and can involve our friends, neighbors, relatives and people we have never met. Unfortunately, not everyone is motivated by a Code of Ethics in their personal life like they should be in their professional life.

For example, if someone asks me what company they should use to host their website, I have a potential conflict of interest because my brother owns a company that hosts websites. If I were to recommend my brother’s company, the question becomes whether I am recommending it because it a good web hosting company, or because it is my brother, or maybe even because I might receive a commission for every person that I refer.

Disclosure

It is not that conflicts of interest are automatically bad. However, an undisclosed conflict of interest is unethical, and potentially harmful. If I recommend my brother’s company and I do not tell the person that it is my brother’s company that I am recommending, I have potentially caused that person harm because I have not given them all of the information they need to make an informed decision. However, if I tell them that my brother owns the company, then I have not done anything to cause that person harm.

The disclosure of this conflict of interest may even be helpful to my brother. If I have acted and worked in a way that causes this person to respect me, the fact that it is my brother’s company may be the reason that the person chooses my brother’s company. By behaving ethically and professionally, my recommendation means more, and the fact that I am related to the owner of that company is a positive thing for the person who asked.

Ethics in our personal lives

In our personal lives it is also important to disclose conflicts of interest. I live in a state that recently deregulated its electricity market, which means that I am now able to choose which company I want to produce the electricity that I use. Needless to say, I was swamped with phone calls and mail from the different companies that wanted me to choose them. One evening I was talking to my neighbor and asked if he had chosen a company and how happy he was with his choice. He told me which company he had chosen and that he was happy.

Later, after I had made my selection, I found out that if I recommended others to select the company that I had chosen, they would pay me $50 for each person I recommended and signed up. When I read this, it made me wonder about my neighbor – did he make his recommendation because he was happy, or because he was going to get $50 if I selected the same company that he did?

So, when someone gives you a recommendation, (especially when it is a website giving you a recommendation), you should ask yourself if they have a conflict of interest that they are not telling you about. It might just change your mind about what decision you should make in a particular situation.

Brian Hock, CMA, CIA

 

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5 Comments

  1. Shuayb on February 22, 2021 at 10:05 am

    Useful chapter



  2. Helen on February 22, 2021 at 10:17 am

    Good article. I saw Hock’s review here: https://ipassthecmaexam.com/hock-cma-review/

    Is it a case of conflict of interest? Does Stephanie from ipassthecmaexam earn a commission from you guys?



    • Brian Hock on February 22, 2021 at 3:58 pm

      Hello, Helen,

      There are a number of sites like that that have reviews of HOCK materials for the CMA and CIA Exams. On most of them the reviews are old and outdated because we do not pay the commission that is required in order to be evaluated and ‘ranked’ by the sites. Stephanie’s sites are the only sites that we know of on which the reviews of the HOCK materials are kept up to date. In answer to your question, yes, Stephanie does receive a small commission from HOCK for candidates who purchase our materials after using the reviews on her site.

      We believe that this becomes a conflict of interest when the site does not disclose that they are receiving a commission from the material company. In Stephanie’s case she does disclose that she receives a commission in a couple of different places.

      We have decided to work with Stephanie’s site because she keeps reviews up to date and she does not appear to “sell” the top spots in her rankings.

      Brian



      • Helen on February 22, 2021 at 5:53 pm

        Thank you for your response.

        Could you please point to where does Stephanie disclose her conflict of interest? I must have missed that.

        I am quite surprised because I read on your website that you do not participate in commission programs and that you “[a]re calling on review sites to disclose their financial interest in referring certain materials over others. Many of these sites are run by certified professionals who should know that it is in violation of any professional Code of Ethics not to disclose conflicts of interest.”

        It’s from this article: https://www.hockinternational.com/dont-be-misled-biased-reviews/



  3. Brian Hock on February 22, 2021 at 7:13 pm

    Helen,

    Yes, you are correct that I wrote that in 2017. And at the time that I wrote that, that was true that we did not work with any review sites. As I wrote earlier, we believe that Stephanie’s site is not the typical review site because she does not sell the highest rankings to whichever company pays the highest commission, and she does not provide a 1, 2, 3… ranking system of the materials. We have been careful as well to ensure that the small amount that is paid does not impact the pricing that we are able to offer our candidates.

    Stephanie’s statement about fees can be found in a at least a couple of places on her site. At the top of the page of the CMA Review Courses there is a button that is “CMA Review Course Disclosure”. And at the bottom of the page (it looks like on every page) there is a link to Terms of Service and Disclosure Policy. There may be other places it is disclosed, but those two I found quickly on the site.

    Brian