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Conflicts of Interest in Business: A Review of the Concept

Voicu D. Dragomir ()
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Voicu D. Dragomir: The Bucharest University of Economic Studies, Romania

Journal of Accounting and Management Information Systems, 2017, vol. 16, issue 4, 472-489

Abstract: All companies admit in their codes of conduct that conflicts of interest (CIs) are a threat to their efficiency, integrity and reputation. Except for insider trading, definitions of CIs are strictly particular to each business and publicly expressed through their codes of ethics. I propose an interpretative analysis of what is understood by conflict of interest in the codes of ethics of the world’s ten largest companies, along with a comprehensive review of CIs in several sections: employment, contracting, corporate assets, insider trading and personal investments, competitors, and corporate image. The present paper offers solutions to avoid or resolve CIs in a business context, by combining economic preference with the psychological cognitivist view of self-interest. The conclusion is that a code of ethics and relevant training are protective measures for a company wishing to convince its employees that they are better off not entering CIs.

Keywords: codes of ethics; conflicts of interest; corruption; corporate conduct (search for similar items in EconPapers)
JEL-codes: M41 (search for similar items in EconPapers)
Date: 2017
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Handle: RePEc:ami:journl:v:16:y:2017:i:4:p:472-489