Ways to mitigate conflicts of interestsRemoval The best way to handle conflicts of interests is to avoid them entirely. For example, someone elected to political office might sell all corporate stocks that he/she owns before taking office, and resign from all corporate boards. Or that person could move his/her corporate stocks to a special trust, which would be authorized to buy and sell without disclosure to the owner. (This is referred to as a " blind trust".) With such a trust, since the politician does not know in which companies he/she has investments, there should be no temptation to act to their advantage. Disclosure Commonly, politicians and high-ranking government officials are required to disclose financial information - assets such as stock, debts such as loans, and/or corporate positions held, typically annually. To protect privacy (to some extent), financial figures are often disclosed in ranges such as " $100, 000 to $500, 000" and " over $2, 000, 000". Certain professionals are required either by rules related to their professional organization, or by statute, to disclose any actual or potential conflicts of interest. In some instances, the failure to provide full disclosure is a crime. Recusal Those with a conflict of interest are expected to recuse themselves from (i.e., abstain from) decisions where such a conflict exists. The imperative for recusal varies depending upon the circumstance and profession, either as common sense ethics, codified ethics, or by statute. For example, if the governing board of a government agency is considering hiring a consulting firm for some task, and one firm being considered has, as a partner, a close relative of one of the board's members, then that board member should not vote on which firm is to be selected. In fact, to minimize any conflict, the board member should not participate in any way in the decision, including discussions. Judges are supposed to recuse themselves from cases when personal conflicts of interest may arise. For example, if a judge has participated in a case previously in some other judicial role he/she is not allowed to try that case. Recusal is also expected when one of the lawyers in a case might be a close personal friend, or when the outcome of the case might affect the judge directly, such as whether a car maker is obliged to recall a model that a judge drives. This is required by law under Continental civil law systems and by the Rome Statute, organic law of the Inernational Criminal Court. Third-party evaluations Consider a situation where the owner of a majority of a publicly held corporation decides to buy out the minority shareholders and take the corporation private. What is a fair price? Obviously it is improper (and, typically, illegal) for the majority owner to simply state a price and then have the (majority-controlled) board of directors approve that price. What is typically done is to hire an independent firm (a third party), well-qualified to evaluate such matters, to calculate a " fair price", which is then voted on by the minority shareholders. Third-party evaluations may also be used as proof that transactions were, in fact, fair (" arm's-length"). For example, a corporation that leases an office building that is owned by the CEO might get an independent evaluation showing what the market rate is for such leases in the locale, to address the conflict of interest that exists between the fiduciary duty of the CEO (to the stockholders, by getting the lowest rent possible) and the personal interest of that CEO (to maximize the income that the CEO gets from owning that office building by getting the highest rent possible). 3. Answer the questions: What are the ways to cope with conflicts of interests? What is the best strategy to handle conflicts? If avoiding is impossible what other good strategy What is “blind–trust”? What are officials and professionals required to disclose? When does it turn to a crime? What do officials and professionals recuse from? What does the imperative for recusal depend on? Why is the third – party involved in a conflict? 4. Match the following words with the translation: to mitigate– обнажать, раскрыть to takе office– воздерживаться board– законодательный акт trust– место действия stockholder– властный приказ to disclose– смягчать temptation– оценка evaluation– соблазн imperative– акционер to abstain– сдавать в аренду statute– совет, правление to lease– занимать должность fiduciary– очевидно locale– кредит оbviously– доверительный, конфиденциальный
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