Conflict of Interest in Nonprofit Organizations

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Conflicts of interest do not only occur in profit companies, but also in non-profit organizations. The conflict of interest that involves the Canadian Prime Minister is one of the most well-known cases. News fromoccrp.orgstates that Justin Trudeau was proven to be involved in awarding a charity contract to “WE”, a non-profit organization that is tied with his family.

The charity “WE” is one of the largest non-profit organizations in Canada, and was given the task of managing $ 670 million dollars’ worth of scholarships without going through a tender process. Later, “WE” received $ 14.7 million due to Trudeau’s help. In addition, both Trudeau’s mother, Margaret and her brother, Alexandre, have received thousands of dollars to speak at events organized by the charity between 2016 and 2020. Her mother spoke at 28 events with an estimated salary of $ 230,000, according to the letterThe GlobeandMail news. Canada’s Finance Minister’s daughter was also involved with “WE”, by working in one of the charity’s departments.

Conflicts of interest are often the root cause in fraud cases  that involves corruption and bribery. Conflicts of interest do not always lead to corruption, but all   corruption cases are preceded by conflicts of interest. A senior investigator of the Organization for Security and Co-operation in Europe (OSCE) of Austria Paul Catchick, CFE said that all acts of corruption contained an element of conflict of interest and could go undetected for years.

As conflicts of interest result in fraud and large losses, organizations must take action to minimize the potential for conflicts of interest and prevent fraud. One method companies can take to prevent conflicts of interest is to implement an Anti-Bribery Management System (ABMS). In Indonesia, ABMS or ISO 37001 is a standard of corporate responsibility relating to PERMA No. 13 of 2016 concerning procedures for handling corporate criminal cases.

ISO 37001 requires companies to conduct background screening of prospective employees or employees who will be responsible in a department that has a high risk of bribery. Therefore, the case of the above-mentioned charity “WE” would not have occurred if the organization’s management had previously carried out background screening so that there are no family members in the organization.

Integrity Indonesia is ready to assist your company in setting up an Anti-Bribery Management System byproviding a comprehensive toolbox for the set up and implementation of an Anti-Bribery Management System according to the ISO 37001 framework. Contact ustoday for more detailed information about the Anti-Bribery Management System.

 

 

 

Written by: Aqilla N

Sport photo created by master1305 – www.freepik.com

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