TRUST and Conflict of Interest

A conflict of interest exists when you are in a position to derive personal benefit (or prevent personal loss) from actions or decisions you make in a representative capacity.

Being in a conflict of interest is not a trust issue but rather a simple circumstantial one. But how you handle the conflict of interest is a trust issue. This article will explain what conflict of interest is, how it relates to trust, how the way you are handling it will affect your trustworthiness, and how to handle it to increase your trustworthiness.

What is a Conflict of Interest?

If I want to buy a new computer but don’t want to spend the money, I have a personal conflict of interests, but it doesn’t affect anyone else, so it doesn’t rise to the level of COI discussed here. Nobody will trust me less (or more) for my decisions. However, if I use my position as an elected official to make a decision that would affect constituents while affecting myself differently, and my personal benefit guides my decision—I’m definitely in a COI situation. The components of COI are, therefore:

  • Being in a representative decision-making position

  • Making decisions that would affect the people I’m representing

  • Being the beneficiary of my own decisions in a different way than the people I represent

  • Letting my personal benefit affect how I make those decisions

There is a range of making such decisions, with two extremes. One extreme is when I’m hurting people I represent unfairly for my benefit, and the other extreme is when I’m helping people unfairly, again, for my benefit. I can refer to the first as “persecution” and the other as “getting away with murder.” Those decisions are typically driven by my relationships with those affected by my decisions (for better or worse) or the relationships between them and people I care about (such as my political party). What’s common to both cases is that your vested interest is high. As a result, your decisions are made less on evidence, truth, facts, and objective analysis and more on emotions, with the end justifying the means.

In the middle is the objective, evidence-based decision-making, which is not driven by emotions. Unfortunately, almost any decision you make will affect you, even if very little, driving some emotional involvement, which would steer you slightly away from the pure objective, analytical decision-making.

The mechanism of COI typically uses a tool called Confirmation Bias. You need some evidence to justify your biased decision, whether to withstand public scrutiny or even just for yourself. However, when the conflict is high and your vested interest is high, you tend to be very selective in your choices of evidence you tend to rely on. You prioritize evidence that supports your pre-determined decision over evidence that would contradict it.

COI and Trust

When people who rely on the outcome of your decision-making process believe you were in a COI situation in which your decision was affected more by your benefit and that it conflicted with their benefit, they will not trust you. This can apply to either the process or the outcome of your decisions. People may not trust you because your process seemed biased (using confirmation bias, for example) or the outcome was not in their favor. They will not trust you due to two components in my trustworthiness model: the positivity of your interaction with them and your personality compatibility with them.

How to Handle COI and Stay Trusted?

There are cases where laws were created regarding COI, how to declare it, and how to avoid it. In this article, I will not refer to those.

Sometimes, a COI only appears to be that way. Certain circumstances may cause others to think you are in a COI situation when you are not. Given that your trustworthiness is assessed and considered through the eyes of the person wishing to trust you if it might appear to them that you are in a COI situation, then you need to address it.

There are several ways to address a COI while maintaining (or even increasing) your trustworthiness:

  • Disclose that you are (or appear to be) in a COI. Failing to disclose it and allowing the other person to find out independently indicates that you are hiding the fact. It doesn’t matter if you really are in a COI, or only appear to be in one, or whether you think you can remain objective and not be influenced by it. Disclose even a hint of the appearance of COI.

  • Recuse yourself or abstain from making a decision, if possible. However, remember that some people will trust you less if they don’t like your recusal’s effect on the outcome. For example, if a vote was going to go 5:4, and your abstention would change it to 4:4, where a majority is required, then the effect of your abstention is equivalent to voting against the decision. Those who expected you to support it might trust you less.

  • Provide transparency to both your decision-making process and the logical outcome. Showing that your decision is based on fact (sharing the facts) and on values (disclosing what those values are) and that the outcome is a logical outcome of that process would increase your trustworthiness. Keeping people in the dark on what you considered when you made a decision and how the evidence you considered logically led to the outcome rendered would reduce your trustworthiness. An exception to this transparency is when some or all of the information or process must be kept confidential for some reason that is outside your control. The trust you will maintain will depend on your trustworthiness in non-confidential COI situations.

  • Sometimes, you have no choice but to “take sides” even though you are in a COI. Know that you will be subject to increased scrutiny, so ensure the top bullets are met to the best of your ability. If that happens, challenge yourself to be objective and make a decision for the benefit of those you represent, even when it comes at the price of reduced benefit to you. Especially when the latter occurs, you will “buy” trust.

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Dr. Yoram Solomon is a trust expert, author of The Book of Trust, host of The Trust Show podcast, a two-time TEDx speaker, and facilitator of the Trust Habits workshop that helps build trust in organizations.

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