Recruitment Conflicts of Interest
The Independent Broad-based Anti-Corruption Commission (IBAC) report on ‘Managing corruption risks associated with conflicts of interest in the Victorian public sector’ has shone a light on some grave failings in identifying and managing conflicts of interest in recruitment.
Consider this, have you ever told yourself that:
Conflicts of interest can always be avoided.
There is no conflict because I can act fairly and without bias.
I told my manager about the conflict of interest, that’s all I need to do.
My interests are private and are not relevant to my role.
If you answered yes to any of the above, you have likely fallen face-first into some of the most common conflict of interest traps as identified by the IBAC.
The IBAC report outlines a number of findings which serve as a timely warning which wise recruiters should take heed of.
RECRUITING RED FLAGS
A 2016 IBAC survey found that approximately one-fifth of respondents had observed the practice of hiring family or friends for public sector jobs.
One case study exposed recruitment practices that emphasised personal friendships at the expense of fair merit-based recruitment processes. In one example, a senior executive put forward a former colleague to a CEO for a priority role. This former colleague was then hired without being formally interviewed and without providing any evidence that he held the necessary qualifications for the role!
The senior executive not only failed to disclose the extent of his friendship with the former colleague but failed to recognise a conflict existed altogether. Furthermore, the IBAC also uncovered a concerning lack of sufficient systems and controls within the organisation to address these conflicts of interest, coupled with a lack of awareness amongst senior executives.
The focus for recruiters should always be fair, merit-based and competitive recruitment, however conflicts of interests (especially those that go unrecognised or mismanaged) pose dangerous threats to an organisation’s integrity and reputation. In fact, even potential conflicts can wreak havoc on a business’ reputation if mismanaged.
One IBAC recommendation to help mitigate these risks is to require candidates to declare conflicts of interest during the application process and for organisations to monitor for current conflicts during reference checks.
IBAC investigations have also regularly uncovered organisational cultures of preferential hiring practices. These often go hand-in-hand with cultures of expediency and the idea that ‘getting the job done’ should take precedence over following the proper process. These beliefs create the perfect breeding ground for conflicts of interest and corrupt conduct.
SECONDARY EMPLOYMENT AND INTERESTS
The IBAC has recognised that a public officer’s public duties do not prohibit them from pursuing outside interests which may include working outside of the public sector. However, when such employment and interests are not disclosed and properly managed, they can pose significant conflict of interest risks for an organisation.
When these interests are not systemically disclosed in the recruitment process this can result in dangers relating to an employee’s access of resources, capacity to perform their duties or even impermissible private benefits. Moreover, these are all concerns that are shared across private and public sectors.
The IBAC has recommended that clear policies surrounding secondary employment should be implemented whereby employees, contractors, and candidates declare these interests (and where necessary) seek approval.
The IBAC report offers both food for thought as well as a timely wake-up call for the public sector and private businesses to seriously consider if they are doing enough to protect themselves from conflicts of interest.
Certex offers high-quality services to identify problems within an organisation’s recruitment processes and recommend solutions to help businesses adopt hiring processes that are thorough, credible, non-preferential, and consistent.
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