19 July, 2024
What is a conflict of interest?
Conflicts of interest happen when someone has personal or financial interests that may affect their work. This can cause someone to place their own benefit above the organisation’s interest.
An example is having outside activities. Imagine someone works at a Tech company and also has a consulting business. If that consulting firm has the same clients as the Tech company, that person may make decisions that help his or her own company. This can hurt his or her work at the Tech company.
Especially within the financial sector, education sector and government, you need to be extra vigilant about conflicts of interest. It is important that decisions in these sectors are fair and transparent to maintain stability and trust.
Types of interests
Conflicts of interest can arise from different types of interests:
Personal Interest
This is about what is good for someone personally. For example, if an employee wants to hire a friend.
Financial Interest
This is about money. For example, if someone makes decisions that improve their own financial gain but hurt the company.
Professional interest
This is about what is good for someone’s career. For example, if someone makes a decision to get a promotion, but it comes at the expense of the team or company.
Consequences of conflicts of interest
If someone abuses their position for personal gain, it can result in reputational damage to the organisation. People may trust the company less if they think fraud is taking place.
In addition, conflicts of interest can create a lack of trust within the organisation. This can negatively affect performance and atmosphere in the workplace. Therefore, it is important to recognise and prevent it.
Legislation around conflicts of interest
There are laws around conflicts of interest in the Netherlands. These laws ensure that employees and directors act fairly.
The most important Dutch laws are:
- Works Councils Act (Wet op de Ondernemingsraden – WOR): Requires companies to establish a works council (OR), which influences important decisions and helps prevent conflicts of interest.
- Civil Code (Burgerlijk Wetboek – BW): This contains rules for employees to act in the best interests of the company.
- Annual Accounts Act (Wet op de Jaarrekening – WJ): It requires companies to make financial transactions transparent.
In addition, many organisations have their own codes of conduct and rules to prevent conflicts of interest.
Examples of conflicts of interest
Assigning orders:
An employee assigns orders to family or friends, which is dishonest and damages trust.
Making purchases:
An employee buys things from a company in which he has his own money. This may be more expensive and lower quality.
Taking on side job or new employment:
An employee has a side job with a company that does business with his organisation. This can lead to conflicting interests. Side jobs and new jobs therefore often need to be reported and approved.
Preventing conflict of interest
It is important to avoid conflicts of interest. Employment screening helps with this. Employment screenings allow potential problems to be detected and resolved early. This ensures honesty and trust in the organisation.
It is important to recognise situations that involve personal, financial or professional interests.
Regularly discuss potential conflicts of interest within the team.
Assess whether conflicts of interest exist.
Clearly record arrangements to avoid conflicts of interest.
Employees/directors should be able to explain how they have avoided potential conflicts of interest.
Why check conflicts of interest via DISA?
What DISA uses to check conflicts of interest is an Integrity Statement. In which questions are asked about side positions. The questions can be answered with yes/no, and in case of a different answer, there is room for the candidate to give an explanation.
In addition, we can also check whether the Chamber of Commerce has details of any of a person’s companies, and therefore whether they may have side positions.
This allows employers to make hiring and collaboration decisions with confidence, knowing that a thorough and transparent screening has been conducted.
Screening employees with DISA
DISA not only helps in identifying side activities, but also in further screening staff. This ensures a safer and more reliable workplace.
Fast turnaround time: DISA works quickly and efficiently. Our optimised processes ensure that you quickly receive the information you need, allowing you to make decisions faster and move forward with your business.
Time savings: By working with DISA, you save a lot of time. We take care of the entire screening process, from collecting information to reporting results. This allows you to concentrate on your core activities without losing time on administrative tasks.
GDPR proof: DISA works according to GDPR regulations. Our strict protocols and security measures ensure that all data is processed securely and according to the latest regulations. As a result, you can trust our services with a peace of mind, knowing that the privacy of everyone involved is guaranteed.