Ways to Avoid Conflict of Interest Business
In order to successfully promote professionalism and fairness, the most important thing to do is avoid conflict of interest that may hinder a business to grow and expand.
While doing this may not be easy for some people, there are ways to avoid having to face conflicting choices and dilemma that can make individuals feel confuse.
Conflict of interest interferes in any business may prevent this from expanding and growing. While in some cases conflict of interest gives a business an advantage (e.g. a politician who owns a restaurant chain proposes a law that is beneficial to his business), this is considered unethical and may create distrust and resentment among people.
Ways to avoid conflict of interest
Make sure to hire people, especially board of directors and key employees, based on their skills and dedication.
When hiring board of directors, make sure they are not part of any rival company or own a business that competes with the firm where they serve as key employees and decision-maker.
Nepotism, or the practice of hiring and promoting a relative, should be avoided (unless they truly deserve such). This is not only unfair to other workers who are more deserving but also creates deep resentment among employees that may backfire against employers.
Avoid holding two corporate positions that are conflicting
A person who is holding two conflicting positions should relinquish one of these. For example, a shareholder who owns another rival company is not in a position to make decision since there is obviously a conflict of interest.
For businessmen, they should remember that the most important thing in the industry is credibility.
Avoid holding public office while engaging into a business
If a person cannot avoid this, he should make sure not to use his political influence. This is not just about legal and political issue, but more importantly, an individual may avoid lawsuit which may force his company into bankruptcy or force him to liquidate his business asset.
When owning a corporation, treat the business asset separate from personal asset
For owners of corporation, they should receive a salary just like any ordinary employee (receiving individual taxes and not federal taxes). By doing this, they can enjoy limited liability. This means that their personal assets such as houses, cars, and jewelleries will not be liquidated if their companies go bankrupt.
However, if they treat their business asset as an extension of their personal assets, their belongings will be liquidated to pay for their company’s debt.
Maintain professionalism in the office
Employers should promote open communication with their employees but not to the extent that the workers treat them as bosom-buddies. While it will be helpful to remain approachable, employers and supervisors should know where to draw the line.
Remember that a sense of authority is the most important thing in managing a business.