The management of risk associated with conflict of interest is fundamental to ensuring high levels of integrity and public trust in the Victorian public sector.
In every public sector organisation, and on every public sector organisation board, there is potential for conflict of interest to occur. Conflict of interest should be avoided wherever possible, or declared and managed appropriately.
The VPSC has developed tools and guidance to assist organisations and directors to manage conflict of interest risks.
- Conflict of interest guidance for organisations
- Conflict of interest and duty guidance for directors
Types of conflict of interest and duty
A conflict of interest is where an employee or director has private interests that could improperly influence, or be seen to influence, their decisions or actions in the performance of their public duties.
Conflicts may be actual, potential or perceived, or represent a conflict of duty.
Actual conflict of interest:
There is a real conflict between an employee or director’s public duties and private interests.
Potential conflict of interest:
An employee or director has private interests that could conflict with their public duties. This refers to circumstances where it is foreseeable that a conflict may arise in future and steps should be taken now to mitigate that future risk.
Perceived conflict of interest:
The public or a third party could form the view that an employee or director’s private interests could improperly influence their decisions or actions, now or in the future.
Conflict of duty:
Will arise when a person is required to fulfil two or more roles that may actually, potentially or be perceived to be in conflict with each other.
Public duties and private interests
Public duties are the official tasks that you perform in your role as an employee or director. A private interest means anything that can influence an employee or director.
Private interests may be direct or indirect, and financial or non-financial:
Includes an employee or director’s own personal, family, professional or business interests.
Includes the personal, family, professional or business interests of individuals or groups with whom the employee or director is, or was recently, closely associated.
Involves an actual, potential or perceived financial gain or loss. Money does not need to change hands for an interest to be financial.
People have a financial interest if they (or a relative, or a close associate) own property, hold shares, have a position in a company bidding for government work, receive benefits such as concessions, discounts, gifts or hospitality from a particular source related to the public sector organisation, or can benefit financially from a decision significantly influenced or made by the organisation.
Arise from personal or family relationships, or involvement in sporting, social or cultural activities.
They include any tendency toward favouritism or prejudice resulting from friendship, animosity, or other personal involvement with another person or group. If personal values are likely to impact on the proper performance of public duty, then these can also lead to a conflict of interest.