Conflict of interest management in public sector decision making

By Joanne Toon
TINZ Member with Delegated Authority

Integrity is at the heart of trust behind decision making in the public sector. Whether these are decisions made by our elected officials or by public servants, we all need to be confident that  decisions are made for the right reasons, rather than as a result of personal gain or bias.

A conflict of interest occurs when a person has interests or relationships in their personal life that directly affect (or have the potential to affect) their professional duties. The existence of a conflict is not in itself an issue; Aotearoa is a small country, and connections between public and private lives are almost inevitable in a public servant’s professional career. How they are managed and monitored makes the difference between a decision being made with integrity, and the erosion of trust and confidence.

We see potential conflicts called out and managed in our elected officials on a regular basis; for example, Minister Collins stepped back from her role as Attorney General for the Fast Track Bill because of a conflict, and more recently Tod Stephenson sold his shares in healthcare companies as they created a perceived conflict with his role as the Parliamentary Private Secretary to the Associate Health Minister.

Within procurement, where substantial public funds are at stake and decisions directly impact governmental operations or public welfare, we have to ensure that contracts are awarded fairly, impartially and transparently. The Office of the Auditor General’s recent report “Strengthening Government Procurement” underscores this necessity, emphasising robust approaches to identifying and mitigating conflicts of interest in government procurement processes.

When conflicts of interest are not declared, or are poorly managed, the consequences can be delays and erosion of public trust, as well as reputational impacts for the agency, the individual with the conflict and the organisation they are conflicted with. Even the perception of a conflict can have significant implications despite there being no impact of the conflict on the decision making process.

To effectively manage conflicts, proactive measures are essential. Agencies’ conflict management procedures need to require early declarations and management, and repeated reviews, particularly when the processes take place over a long period of time. Conflict management is not a “one and done” exercise!

It is also critical that anyone with an influencing or decision making role should be included in this process, whether they are supporting the requirements gathering and planning process, taking part in the evaluation panel, or signing off on recommendations. The procurement team must take the lead in ensuring these declarations are made and that appropriate mitigations are agreed for any actual, potential or perceived conflicts.

A range of strategies exists for conflict mitigation, including removing individuals from decision-making processes, limiting their roles, or engaging independent oversight such as auditors. Each approach should be tailored to the context and severity of the conflict.

Ultimately, successful conflict management hinges on clear documentation and adherence to established protocols. The responsibility falls not only on individuals to disclose conflicts but also on procurement leadership to ensure impartiality and transparency throughout the process.

The Auditor General has provided a range of resources to support the management of conflicts of interest. These include guides and interactive tools, as well as scenarios to explore and lessons from previous investigations. Using these resources will support procurement professionals to address conflicts effectively and maintain public confidence in the integrity of procurement processes.

Prioritising the declaration and management of conflicts of interest is essential for upholding integrity in procurement within the New Zealand public sector. By implementing robust processes, adhering to established guidelines and leveraging available resources, procurement professionals can mitigate risks, promote transparency, and safeguard public trust.

Blog Post written by:
No items found.