Definition of Conflict of Interest
What is a "conflict of interest"? What is the definition of the term "conflict of interest"?
A "conflict of interest" occurs when a person or company has multiple interests in a matter that could potentially influence their decisions and actions to the detriment of others.
Let's look at a couple of examples of a "conflict of interest":
1) A father is serving on a council that administers punishment (fines, suspensions, etc) in the investment industry.
The father's son is set to be disciplined by the council. In this situation, the father has a conflict of interest, as not only is he serving on the council, but he is also the father of the person who is set to be disciplined.
In this situation, the father excusing himself from the hearing would be appropriate.
2) A member of a city council owns a large piece of land just outside of the city. This member of council has applied to have the land zoned commercial so that a new office tower can be built.
There is obviously a conflict of interest here as the council member is going to be voting on the piece of land that he owns. The proper thing for him to do would be to excuse himself from the vote.
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