Conflict of Interest

[jhenbreak]

Question:
I referred my sister-in-law in our company, she's an admin assistant. She's the one getting the suppliers for our company. But, she and her husband put-up a business so they can be the one to supply the company's needs. She will get all the quotations from other suppliers first, and then her own company will then offer the lowest price to our company.
Is this considered Conflict of Interest?
Since the people here know that I am her sister-in-law, will I get involved?

[faye-tea]

I'm no lawyer or any expert but as I see it, yes it is considered conflict of interest. And not just that, issue with supplier confidentiality din yan.. If I am the supplier, gugustuhin ko bang hawak mismo ng competitor ko ang mga proposals, quotations and bids ko? gugustuhin ko din bang my competitor works INSIDE the company I want to supply for.

Again, this is just me ha. Hope we could hear from employer's point of view.

[aquacharly]

I am not a lawyer, but I am a successful business owner and manager of a not small company.
IMO, it goes beyond Conflict of Interest.
How stupid can a business be to allow such a rigged set-up, na pa-guisa ito sa sariling mantika?   lols
Na hindi mo kaano ano, it has no vested interest in that supplier business, eh this is the set up put up by a paid employee?  lols   

Let us talk of the basics of profitable business operations, 1 of which is efficient purchasing/sourcing  of requirements.
Basically,  a business aims for  a fair canvass from its short-listed suppliers and from major importers/retailers/wholesalers.   
It is not always the lowest priced supplier that gains the order, there are other considerations.
Yang manalo all the time as the lowest bidder ang company ng SIL mo --  that happens only in the government, lols.

The fact that your SIL is in charge of solicitation of prices/the canvassing of prices -- that works against the best interest of the company. . 
    Eventually, suppliers advantageous to your company will stop providing quotations since it is a waste of time, and as FAYE TEA revealed:  a supplier does not want its pricing scheme, offers/terms used as a pattern or even, just revealed to a competitor.
    Eventually,  because (excuse me ha, no offense meant),  greed, este ambition pala -- is a very human urge --  your SIL may fabricate suppliers with fabricated high prices so that even if her hubby's company quotes the lowest prices, eh mataas pa rin than going prices in the market.  Yan, double guisa na sa sariling mantika ang company.

For me, ako lang naman, who am I but 1 business owner/manager -- this is not conflict of interest. 
This is a betrayal of trust.
This is a case of  Estafa/deceit  I  will file against your SIL and you (the more the merrier eh) & whoever did not squeal on her in that purchasing dept.
     

[monbla]

^ she covered it all.

Not only is your SIL guilty of conflict of interest, she is also jeopardizing the company's image to business partners and the company will be exposed to accusations of unfair dealing. Not to mention, all of it is just in bad taste.

On the question of whether you'll get involved, most companies allow relatives to work, but limits are set in terms of number and reporting relationships. So in itself, relations within the company is not outright conflict of interest...

... However, if they found out that you knew and didn't tell... I don't know how the company will react to that.

Advise your SIL before it's too late.

[jojo2978]

IMHO, NO conflict of interest exist in the facts presented legally speaking but she may have violated something in your company's internal rules or code of conduct if you have one.  Your SIL is an admin assistant in the company, by no means she will be able to approve purchases unless it is sanctioned by person/s higher that her.

[monbla]

The SIL is planning to act in the interest of her own business. She is clearly favoring her own profit over the company's. Isn't that conflict of interest?

[k_heart]

This is a NO NO in our company. It's against our company policy. Even hiring nga your own kin is against our policy.
The very reason or situation  that you are asking in this thread is the reason kaya may ganyang policy yung company namin. Para walang conflict of interest yung employee, so that he or she will always act in the best interest of the company. Dapat walang kinikilingan.
Grounds for termination yan sa amin. Plus, kakasuhan pa ng company.

[aquacharly]

IMHO, NO conflict of interest exist in the facts presented legally speaking but she may have violated something in your company's internal rules or code of conduct if you have one.  Your SIL is an admin assistant in the company, by no means she will be able to approve purchases unless it is sanctioned by person/s higher that her. 

I beg to disagree.  She may not have final approval, yes -- but she is rigging the prices/canvassing to benefit their personal interest.  Whatever her position is, the TS stated that she is in charge of soliciting & screening proposals/prices from suppliers.   

[jojo2978]

^^^It is just my opinion sis based on the facts presented.  Perhaps I failed to understand my commercial law.  Admin assistant = NO conflict of interest.

[monbla]

Based on the heavy education we get in our company about corporate governance and specifically conflict of interest, it doesn't matter what your position level is. It's the nature of your job. In this case, even if she's only an admin assistant, the nature of her job is key to rigging the bidding process, as explained by TS.

Sa amin nga, running a business or having a part time job on the side is generally considered conflict of interest na e. Pero syempre may pinapayagan naman basta may proper disclosure.

Sa banko nga, dinidisclose pati kamag anak na politiko at kamag anak na mataas ang position sa ibang company.

[jhenbreak]

Thanks mga sis! kasi yung SIL, siya pa ang matapang at nagmamalaki sa akin. Parang pinagmamalaki niya na hindi ko siya kayang ipaterminate kasi hindi raw ako ang may-ari ng company, san ka pa!
I've been telling her and my brother before not to do it because it's illegal but they don't want to listen to me.

[faye-tea]

^hindi ka nga owner ng company BUT you always have the option to report on your HRD because once SIL get caught and proved that she violated company rules, guess what? Your SIL might also report that you know all her business and intentions. Like sis aquacharly said, doble aji ginisa on your own mantika. Damay-damay na, the more the merrier.

[aquacharly]

?..about corporate governance and specifically conflict of interest, it doesn't matter what your position level is. It's the nature of your job. In this case, even if she's only an admin assistant, the nature of her job is key to rigging the bidding process, as explained by TS.

Exactly. Even if she is called a janitor/even VP-Purchasing.

BUT you always have the option to report on your HRD because once SIL get caught and proved that she violated company rules, guess what? Your SIL might also report that you know all her business and intentions

Better save your own neck.  But then, Sabi -- blood is thicker than water

[snowberry]

Wow ,maliwanag pa sa sikat ng araw na conflict of interest nga iyan!
Lakas naman ng loob ni SIL . Admin assistant pa lang  ( hindi ko ibig sabihin na minamaliit ko position ng Admin asst). Paano na kung naging manager na ?

Mahirap ang kalagayan mo nyan . It's dam if you do and damn if you don't report to your HR ang situation. Siempre away pamilya iyan kapag nag sumbong ka . But if not, nasa peligro naman ang wok mo. Hay, minsan hirap talaga tumulong sa kaanak.

[agape]

Before she started, she should have disclosed that to the company lawyer if it's conflict of interest or not. And syempre, since conflict nga, di na yan papayagan. But since she's already started, sooner or later that will be discovered, so prepare for the consequences na lang.
Pricing Scheme Info are considered 'trade secrets' and usually employees are given NDA for such info.

[rae]

I don't know much about legal stuff, but as an ex-auditor, and based on the 'story', I would say that the situation would make the risk of fraud higher.

The company seem to have poor internal controls. The duties and responsibilities of a job post should be carefully considered to prevent him/ her to have the sole power of making business decisions.

And I think it's conflict of interest. In most companies I've audited, nasa employment contract usually na kapag may  controlling interest ka sa vendor, supplier, or customers ng company, dapat i-dedeclare mo.

Also, pwede din syang ma-qualify as conflict of interest kasi as an employee, kapag may iba kang source of income that would cause you to act against the best interest of your employer.

Most ng employment contracts may ganung clause. Kung hindi man nasa employmentc contract, nasa Code of Ethics. Hindi ko lang alam kung anong specific definition ng law sa conflict of interest. Pero kung nasa contract mo sa company na qualifiedas conflict of interest yung ganung scenario, IMO, it can be considered as such.