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PMI Code of Ethics, Chapter 4.3.1 and 4.3.2 provide some guidance to this topic.
There are many potential examples that this brings to mind. If, which I think is the question, a person discloses a COI on a project, as a PM, you must manage it. If the person can not work on the project, or certain aspects of the project, the resource plan, and project governance/processes must be established to not only recuse the person from the project (or aspects of it), but sheild the person from potential information. As an example, assume you have contractors working on your project, and you are submitting an RFP, which results in a COI with some at least one contractor. The PM must ensure the contractor is not privy to the RFP information, as well as not working on that aspect of the project.
Conflict of interest is still a conflict to manage no matter how it is disclosed. If it compromises the project, the organization, the project manager, etc... it still needs to be dealt with per policies/procedures.
You are bound by a Code of Ethics as Peter has already stated. You must adhere to this code as a Project Management Professional. Here is the excerpt from 4.3 of our Code of Ethics:
4.3 Fairness: Mandatory Standards
As practitioners in the global project management community, we require the following of ourselves and our fellow
Conflict of Interest Situations
4.3.1 We proactively and fully disclose any real or potential conflicts of interest to the appropriate stakeholders.
4.3.2 When we realize that we have a real or potential conflict of interest, we refrain from engaging in the decisionmaking
process or otherwise attempting to influence outcomes, unless or until: we have made full disclosure
to the affected stakeholders; we have an approved mitigation plan; and we have obtained the consent of the
stakeholders to proceed.
Comment: A conflict of interest occurs when we are in a position to influence decisions or other outcomes on behalf of one party when such
decisions or outcomes could affect one or more other parties with which we have competing loyalties. For example, when we are acting as
an employee, we have a duty of loyalty to our employer. When we are acting as a PMI volunteer, we have a duty of loyalty to the Project
Management Institute. We must recognize these divergent interests and refrain from influencing decisions when we have a conflict of
Further, even if we believe that we can set aside our divided loyalties and make decisions impartially, we treat the appearance of a conflict
of interest as a conflict of interest and follow the provisions described in the Code.
Great question Alankar!
The first thing you do is thank the person for disclosing the conflict of interest. I like to take the position that “a problem understood is a problem half solved”. To many times the conflict of interest is discovered late and or is hidden, ignored or avoided. I like the references to the code given by Mark, and the roadmap it gives us to follow after the COI was disclosed and also Gary’s supporting comments on distancing the individual from the project and the stakeholders. The fact that that a conflict of interest has been identified does not have a negative impact on the individuals ethical conduct but instead could have positive indicators, for the individual and the organization, as they followed the first step in the Code under “Fairness”. We also know a COI can occur with no ill intent and the individual could be a victim of changes in the situation beyond their control. Thank them for speaking up and taking the first step, and now the team has the “Responsibility” for the next steps and its outcome.
Alankar, the answers you have are spot on. Peter, Gary, Mark and John nailed it! I'll add to that - in my experience, the COI is seldom recognised by practitioners let alone declared! So having someone declares their COI in anticipation of stepping-down or stepping-aside is an honest and respectful gesture where the person is taking responsibility and exercising fairness to the project, the process and the integrity of the outcomes. Hence, dealing with the situation would require that the leader exercises also a high level of ethical standards and behaviours. Respect the level of honesty and responsibility that has been demonstrated for fair and equitable outcome. The situation needs to be evaluated, its impact to date as well as in the future needs to be assessed. In some instances, if the declaration is coming too late in the process, the whole process might have to be stopped/cancelled and a fresh start will be required.
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