A conflict of interest case involving executives at three Toronto-area hospitals underscores the serious consequences employees face when they breach professional ethics, says Toronto employment lawyer Doug MacLeod.
“There’s a relatively small number of these kinds of cases involving senior people with the authority to dole out contracts and money,” he tells AdvocateDaily.com.
In the Toronto-area case, two veteran hospital executives have been accused of violating conflict-of-interest policies with their respective employers by awarding contracts to family members and friends, reports the Globe and Mail.
MacLeod, principal of MacLeod Law Firm, is not involved with the case, but says conflict of interest cases are typically the domain of big business, and public-sector institutions, both of which usually have comprehensive policies on ethics and conflicts of interest.
“The government is highly regulated; it has elaborate policies around conflict of interest and the value of gifts that can be accepted,” he says. “It’s very restrictive. In some cases a supplier or provider of services can’t even take their government contact out for a cup of coffee.”
Code-of-conduct policies are also commonplace with large private corporations that operate around the world and do business in countries where kickbacks are a way of life, says MacLeod.
“Many wheels have to get greased to get things done in some countries, so companies have strict policies in place,” he says.
Policies are key, says MacLeod, but if they aren’t properly communicated or enforced, companies can expect people to test the boundaries of it.
“Companies need to send the message, ‘This is a very important core value and we will put our weight behind it,'” he says. “The evidence of that comes in some form of written policy that employees are required to sign, often on an annual basis.”
MacLeod says only a small percentage of employees are bad apples, but it’s important to recognize that, by nature, some people are greedy or have an urgent need for money, and take the opportunity when they see it.
“If someone works for a big company and their job is to tender big contracts, that situation is ripe for potential abuse,” he says. “Most people won’t jeopardize their jobs for $100 or $200. But it might be a different story if they can get $100,000 or $200,000 and the risk is small. When people have authority over mult-million-dollar decisions, you have to monitor their activity to ensure there’s no abuse.”
Companies should also be on guard to make sure they’re not creating a cultural slippery slope when it comes to things like expense policies and travel, says MacLeod.
“You might see senior managers pushing the limits on expense policies or buying first-class plane tickets or going out for dinners at their employer’s expense,” he says. “This kind of behaviour can permeate the organization to the point where everyone gets a sense of entitlement.”