Conflict of Interest and the PMI Code of Ethics

Posted on March 1, 2010 by

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Conflict of interest was discussed in the last posting on the second aspirational fairness standard in the Project Management Institute’s (PMI) Code of Ethics and Professional Conduct. The first and second mandatory fairness standards in the code of ethics address conflict of interest more directly.

A conflict of interest situation occurs when we have competing loyalties. We all play multiple roles and have multiple loyalties that extend beyond the workplace. Although sometimes we can make decisions that support multiple loyalties at once, sometimes roles conflict and we must make a decision that does not support all our loyalties. For example, have your parents wanted something and your significant other wanted something else? When your boss wants you to work extra hours during your child’s sporting event, there is a conflict between your role as an employee and your role as a parent. If you’ve become friends with one of your subordinates, conflicts may arise between your role as a boss and that of a friend.

The first step is to be open about the conflict of interest—not just when someone asks, but taking it upon ourselves to inform others. Section 4.3.1 of the code states “We proactively and fully disclose any real or potential conflicts of interest to the appropriate stakeholders.” If a situation is not disclosed and others discover the potential conflict, it can appear that we have a reason to be hiding something.

Once stakeholders are informed of the situation, the second step is to excuse ourselves from the decision-making process unless or until we have the permission of the stakeholders to participate and a plan. Section 4.3.2 of the code states “When we realize that we have a real or potential conflict of interest, we refrain from engaging in the decision-making process or otherwise attempting to influence outcomes, unless or until: we have made full disclosure to the affected stakeholders; we have an approved mitigation plan; and we have obtained the consent of the stakeholders to proceed.” Project managers preparing for the PMP Exam® often believe that we must excuse ourselves permanently from conflict of interest situations, but this is not always the case. With stakeholders’ permission and a plan, we may participate.

For example, as a teacher’s assistant in college I graded papers and maintained the grade books for certain courses. I remember informing the professor that one of his students was my roommate. He trusted that I would grade fairly, so I had his permission to grade her exams as well. I was glad I had disclosed the information after my roommate did exceptionally well on the test—the professor may have been suspicious if he later found out she was my roommate.

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