Thank you, Madam Chair. I'd like to thank the members of the committee for this chance to speak to you today.
My goal today is to provide a scholarly point of view. In what follows, I'll lay out the key elements of conflict of interest and the reasons that conflict of interest is important.
First, let's look at how it is defined in Canada's Conflict of Interest Act.
Section 4 of the act says the following:
For the purposes of this Act, a public officer holder is in a conflict of interest when he or she exercises an official power, duty or function that provides an opportunity to further his or her private interests or those of his or her relatives or friends or to improperly further another person's private interests.
This definition from the act is flawed in one key way—namely, in its reference to exercising official power. Under this definition, the conflict of interest doesn't exist unless the official actually takes action in an improper way. This fails to correspond to the view of leading scholars in this area, according to whom conflict of interest is a kind of situation, not a kind of action.
According to this expert consensus, a conflict of interest exists as soon as the official finds herself in a certain kind of situation, namely one in which she has the opportunity to act in a way that puts biases into action. Such an official is already—blamelessly—in a conflict of interest, so a more suitable definition would be this: a conflict of interest is a situation in which a person has a private or personal interest sufficient to appear to influence the objective exercise of his or her official duties as, say, a public official, an employee or a professional.
According to this definition, all that's required for a conflict of interest is the existence of a certain kind of professional duty, one that is in tension with some personal interest that stands to affect judgment.
Next, why is conflict of interest considered a problem? Two reasons are generally recognized. First, conflict of interest is considered a problem because we worry that if the professional or official goes ahead and renders judgment or offers advice in spite of an unremediated conflict, her decision may fail to serve those she has sworn to serve. A judge, for instance, in adjudicating a case involving a family member, might impose a sentence that isn't a just one, or a manager might end up making a hiring decision that fails to serve the interests of the organization.
Perhaps more important is that where conflict of interest is not dealt with properly, there is the possibility that confidence in the decision-maker and indeed in the institution in which decision-making occurs will be shaken. Seen from this perspective, the problem with the conflicted judge is not just that she may make a bad decision but that citizens will lose faith in the judiciary. The problem with the conflicted manager is not merely that a bad hire may result but that stakeholders will lose faith in the company's hiring process.
This is in fact the moral crux of conflict of interest. Trust is imperilled if people even suspect that experts or office-holders, who are inherently difficult to monitor, might be in a position to improperly profit from their privileged status.
It's crucial to point out that, properly understood, conflict of interest itself is not and cannot be an accusation. Conflict of interest can arise entirely innocently, as when the judge finds that a close relative has been charged with a crime and brought into her court. The judge here has done nothing wrong, but she is clearly in a conflict of interest. She has a personal interest—namely, an interest in not seeing her relative go to jail—and that interest could be expected to interfere with her judgment. In this situation, the judge is not to be accused of conflict but simply needs it pointed out if she hasn't noticed it already. If she handles the situation badly—for instance, if she goes ahead and presides over the case—then she is rightly to be criticized for that.
What should the individual do when she finds herself in a conflict of interest? First, note that the fact that conflict of interest is not an accusation implies that the integrity of the individual is not a solution. When a true conflict of interest exists, it is insufficient for us to encourage the individual to take care and it's insufficient for her to insist on her own integrity. It's beside the point.
Most experts recommend three key steps in dealing appropriately with conflicts of interest: One, avoid them when you can; two, disclose conflicts to relevant individuals; and three, remove yourself from decision-making.
Each of these steps, however, poses difficulties. Avoidance, for example, is sometimes impossible, because sometimes professionals find themselves thrust into conflict of interest through no doing of their own. Disclosure too poses difficulties. Disclosure sometimes allows professionals to feel as though that's all they needed to do when additional steps were in fact needed. Further, disclosure may leave stakeholders wondering just what to do with the information that has been disclosed. Finally, removing oneself from decision-making is sometimes impossible due to relevant roles and responsibilities, and in some cases, recusal may not even be effective.
Imagine, for instance, the situation of a corporate board member who declares a conflict of interest on some matter and then steps out of the boardroom while a vote is taken. The other members of the board may well find their own decision-making influenced nonetheless by the disclosed interest of the colleague who has left the room. On the other hand, it might be said that while the practical value of disclosure is unclear, interested parties still have the right to know that an individual in whom they are placing their trust is in a conflict of interest.
Briefly, what does all of this imply for the Canadian Conflict of Interest Act? Time doesn't permit a full analysis, but let me make just a couple of points.
First, the act certainly has the ingredients to point public officials in the right direction with regard to conflict of interest. Under the act, public officials are properly obligated to arrange their own affairs in a manner that will prevent them from being in a conflict of interest. They are also obligated to abstain from decision-making regarding matters in which they have a private interest. Setting aside quibbles outlined above about how the act defines conflict of interest, the act does provide decent basic guidance to public officials seeking to satisfy the main requirements of ethical behaviour in the face of conflict. It exhorts officials to avoid conflict; to disclose conflicts, including in writing, to the commissioner, who then posts them on the commissioner's office website; and to recuse themselves from decisions regarding which they have a conflict.
However, one important implication of what I said above might be worth noting. One section of the act allows for exceptions to be made to some of its requirements “if the Commissioner is of the opinion that the contract or interest [involved] is unlikely to affect the exercise of the official powers, duties and functions”, but as I suggested above, whether the conflict will have an impact on decision-making is only half the point, and perhaps the smaller half at that. The key is really whether participation in a decision will reduce public confidence in the relevant decision-making process.
Finally, a key challenge with regard to conflict of interest really lies in what's not in the act—namely, the process by which government officials come to know the requirements of the act and hopefully to internalize its real meaning. There is clear consensus in the relevant scholarly fields that simply having a clear set of rules accomplishes relatively little. Individuals need to understand the values underpinning those rules. They need training. Reading a piece of legislation is not training. Training on ethical issues is a tricky thing, and unfortunately too often gets done in kind of a check-box manner. Ideally, training should be experiential. Individuals need to experience the relevant ethical challenges in order to both appreciate their seriousness on an emotional level and to practise—to develop the habit of—doing what the rules require.
One of my own research projects, IN.Lab, provides an example of what I mean. That project, which is online at www.interactives.ca, involves immersing individuals in realistic scenarios, simulated online, to allow them to engage in ethical decision-making in real time. Federal government training on conflict of interest doesn't need to look exactly like that, of course, but it illustrates what is possible in going beyond the typical annual sign-off approach to training on ethics and conflict of interest.