The Conflict of Interest and the Stamping Out of Temptation. Towards Redefining the Traditional Concept of Trust

Ethics & Compliance Magazine | Year 1, 2016, Issue #1 | Author(s): Alexandru Lucinescu (Spiru Haret University)

Trust is a central value in both the private life and the world of business and it is commonly considered to be indispensable for living a moral life. Simply stated, being a trustful person means doing for someone what you promised him that you would do, irres pec tive of how difficult this could sometimes be. This commitment may be informal, as between friends or relatives, but it may also be formal when a contract is signed between an employee and his employer or between a company and its clients.

It seems obvious that the greater the temptation to be less trustworthy is successfully resisted, the more someone is to be trusted, which means that trust is not mere naivety but a belief that slowly develops out of situations that put it at test. Each degree of trust, even the lowest, requires evidence that unfavorable situations cannot divert someone from fulfilling his commitment. By its own nature, trust cannot exist without being challenged and therefore it is not a gift but a reward, it is earned and not generously given.

One could remark that in ordinary language, trust is usually taken to mean a high degree of trust so that when somebody is said to be trustworthy this means that he proved himself able to firmly reject the incentives for acting contrary to what he is relied on doing.

Trust lies at the end of a long and difficult road but it can be destroyed in a blink of an eye. We feel betrayed when someone close to us disregards what he has promised to do and when a client finds unworthy of trust a company that fails to abide by what was previously agreed upon. Thus old friendships come to an abrupt end and companies that managed to survive on the market for a long time went bankrupt. Trust always runs the risk of betrayal so that putting trust in someone means assuming a certain degree of risk that, of course, is very low when the one that is trusted has always been faithful to you in extremely difficult moments.

We admire trustworthy people because it is thought that they should be so not out of fear but only out of conviction. A trustful person struggles to be like that because he has turned trust into one of his main values and thus the desire to accomplish it is all that motivates him. He is what we generally call a man of principle. On the other hand, a man who respects a promise being afraid that otherwise the consequences are likely to be very unpleasant for him is considered to be simply prudent and he is less praised than a trustful man who undoubtedly will accept unpleasant consequences if that is the price to pay for remaining faithful to his freely assumed responsibilities. Seen through the lens of this distinction, an employee who fulfills his contractual obligations because he fears that the company he works for will otherwise sue him, is by no means trustful since he could be willing to neglect those obligations if he discovers a weakness among the provi sions of his contract. One could be satis fied with prudent employees, but trustful ones would be certainly preferable, if available. Due to the high standards associated with trust, trustworthy employees are a scarce human resource for companies, as true friends are hard to find in ordinary life.

The intimate link between trust and morality becomes apparent by pointing out that the whole of morality is about the inner power not to give up to temptations dragging us away from moral commandments. In modern times, the German philosopher Immanuel Kant made courage the virtue of a moral man due to which he could master the impulses and inclinations opposed to moral duty. A trustworthy man could be regarded as a courageous person capable to face serious loses in order to behave in accordance with his commitment. Equally, the one who puts trust in somebody needs courage for doing that, given that betrayal is an ever-present possibility.

But how is the interplay between trust and the conflict of interest supposed to look like? The conflict of interest is to be understood as a peculiar type of conflicting interests and therefore we are first going to explore how interests could collide. Within a company, it is possible to find an employee who takes advantage of each opportunity to neglect his job in favor of his private preoccupations. If left alone and unsupervised, he would not answer the clients calling for information about the pharmaceuticalproducts sold by the company but would instead read on his tablet the latest chronicles about Cannes Film Festival. The interest of his employer to sell more pharmaceutical products is certainly not one of his own interests so that what we have here are the interests of two different persons which are in conflict with one another. Is this a conflict of interest situation? Positively not, because a conflict of interest is considered to involve two or more interests of the same person which cannot be simultaneously satisfied because the fulfillment of one of them necessarily entails the failure of the others. Instead, this case illustrates a typical agent – principal problem. However, their relationship, bad as it is, is nevertheless a fiduciary relationship and this is a necessary ingredient for the emergence of a conflict of interest.

Within the framework of the conflict of interest, the professional, understood in the broadest sense of the term, is conceived as being totally devoted to the interest of his client and the mark of that devotion is that he puts himself into his client shoes. This demand is in line with the old moral saying Do to others what you would want them to do to you that was regarded by Kant as the fundamental moral principle of ordinary morality. The professional has to treat his client as he himself would like to be treated and this implies that he operates a partial identification with the client. The same type of merger could be said to be required for the relationship between the movie fan employee and his employer to potentially underpin a conflict of interest.

Let us consider another example. A lawyer experiences at the same time the interest of winning an extremely complex case for one important client and also the interest of spending more time with his family. Realizing his first interest requires that he works longer which, in turn, makes it impossible for him to stay more with his wife and children. Are we now talking about a conflict of interest? Not yet because for a conflict of interest to emerge, his professional judgment employed in the court case must be hampered by his opposing interest, which is not what happens here.

Here is another possible situation: a manager from the acquisition department of a pharmacy shop signs a contract for buying drugs from a company where his wife works as the manager of the sales department while he sincerely shares the interest of his company for making the best deal. Almost everyone would say that in this case there is a full-fledged conflict of interest situation. Asked to explain why, people will indicate that the manager could let his interest of gaining more money to prevail over his interest of making the best deal for the company and, as a result of that, he could buy drugs in larger quantities than needed, or drugs that are not easy to sell or even that he could pay a higher price for the drugs. The fact that he does not take advantage of this opportunity because he is able to effectively counter his private interest and to pursue the best interest of the drug store does not convince any of us that he is to be trusted for making this type of business. The mere fact that he is exposed to a financial temptation renders him less reliable and his past successes in resisting to that temptation do not contribute in any significant way to making us trust him in the future.

It follows that, to be trusted in the field of business, someone involved in a fiduciary relationship must not find himself in a conflict of interest, that is, must not be tempted to disregard the best promotion of the interest of the person on whose behalf he committed himself to act. Being involved in a conflict of interest is immoral and this is forbidden by virtually all codes of ethics, irrespective of how rightly that person actually behaves. To be subjected to temptations appears thus to be something immoralby itself when it comes to professionals.

At this point of our reasoning we have to remember how we have previously depicted trust and morality and, if we do so, we shall easily see that these concepts and the conflict of interest do not go well together. In connection with the conflict of interest, trust is no more understood as successfully resisting pressing temptations while fulfilling a responsibility and, equally, it is no more regarded as being awarded at the end of a long and courageous journey through such temptations. What a trustful person is now to be admired for since temptations have been removed and the professional is left only with the difficulties peculiar to his field of expertise? Overcoming these difficulties makes him a good specialist while overcoming temptations is what makes him a good person. Strange sort of trust is the one which renders betrayal impossible and very unusual that morality which rules out the possibility of defeating the temptations.

Certainly, such an account of trust, that could conveniently be called professional trust, partly solves the paucity of trustful people that was entailed by the other form of trust that one could reasonably designate as traditional trust.
Trustworthiness is now much more at hand and those who yesterday were contemplating the harsh road towards trust find out today that they have already smoothly reached the destination.

However, the professional trust shares with the traditional notion of trust an important feature: the requirement that one should treat the interests of others as if they were his own. Putting oneself in another’s place or, to use a more technical wording, universalizing the normative structure of action, is the goal of that morality which is consistent with professional trust, and which, therefore, could be named professional morality; but it is also the goal of the traditional morality that underpins the other concept of trust. What tells apart one morality from another are the means considered to be adequate for achieving their common purpose. Traditional morality relies on the continuous fight against temptations while the professional morality relies on the continuous fight for excluding all temptation. Professional morality comes close to what Kant believed to be an ideal type of life for humans and, thus, spears us the risk usually entailed by trusting somebody.

The well-known concept of conflict of interest proves to be a window towards an unfamiliar view on trust and morality and it invites further reflection on mapping the field of business ethics that continues to surprise those who take the time to walk through it and collect what is more unusual there.

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