Implementing Confict of Interest Policy

Steve Charles: Implementing Conflict of Interest Policy

Issue

The main dilemma presented in this case is: was Steve Charles guilty of being caught in a conflict of interest between the company and his personal investments? Steve Charles admitted to buying a 20 percent ownership in Offshore Instrumentation Specialists of Texas (OIST) only following thorough Internal Security investigations. During the time period of his ownership (1987 to 1990) OIST worked for Ridgeway on at least two jobs, yet Charles never disclosed an ownership under the company’s Conflict of Interest policy. Was this an honest mistake or did he have other intentions?

Theory

A firm’s conflict of interest policy addresses situations in which the interests of its directors, officers, and key staff come into conflict with the interests of the organization. These policies help to ensure that no person benefits inappropriately from any transactions in which the organization is involved. In general, the conflict of interest policy prohibits an interested person from approving or voting on a conflicted transaction and requires that the interested person give full discloser of all facts to the appropriate decision makers. The fact that Charles failed to disclose any information of his current ownership (at the time) and investments in other companies was completely unjustifiable. You have a responsibility to your company to inform them of such investments.

Analysis

All evidence from this case points to the idea that Steve Charles did have intentions to unethically acquire profits through his investments in OIST and DEMC. Charles did not disclose information of these investments because he knew that Ridgeway would discover these outside profits. This is completely unethical and is an offense that should result in immediate termination. If he had ownership in other companies that weren’t directly collaborating with Ridgeway than there would not have been an issue at all, yet numerous...