[Osmf-talk] Conflict of interest (was: Remarks and question regarding board meeting minutes and circulars)

Frederik Ramm frederik at remote.org
Wed Dec 19 00:21:04 UTC 2018


Hi,

On 12/17/18 21:27, Christoph Hormann wrote:
> Frankly that reply is so amazing on so many different levels that i 
> would like to ask the other board members if that is the position of 
> the board.  Because if it is the problem is so much worse than it 
> seemed to me at first...

I'll answer with a longer treatise on conflict of interest in general.

We've had discussions on conflict of interest in the board for longer,
and these discussions have occasionally been difficult because more than
almost any other topic they have shown how individuals from different
cultural backgrounds perceive things differently.

We've also heard advice from our pro bono lawyer about what the UK
companies act has to say about conflict of interest, and frankly that
didn't exactly make things easier. The companies act has some very
drastic rules about conflict of interest, where not declaring a conflict
in certain situations can be a criminal offense. The act differentiates
between "transactional" conflicts (e.g. board wants to buy service from
a company in which one director holds a stake, board wants to hire a
close relative of one director) and "situational" conflicts (board
decides on a guideline that might affect one director's employer in one
way or another).

Studying the law can help us set a minimum bar, but while acting within
the law is necessary, it might not be sufficient (or, as a friend once
put it: "Is 'not being illegal' the standard you want to hold yourself
to?"). Opinions on the board vary wildly on what should be treated as a
conflict of interest, and what the consequences of such conflict should
be - for example, if it is found that someone should not participate in
a vote because of a conflict of interest, may they still recommend that
their fellow board members vote one way or another?

The discussion is not helped by often being mixed with the topic of
trust. The board cannot work without trusting each other; at the same
time, we want to make rules that do not *depend* on board members having
the highest moral standards. It's like in IT security where you always
have to assume everyone is a bad guy when in fact 99.9% of users aren't.

A frequent issue is also that "you have a conflict of interest" sounds
like an accusation and is perceived by some as such. A good
conflict-of-interest framework should benefit the organisation and the
individual but conflict of interest rules are sometimes seen as going
"against" an individual, "disqualifying" them from participation. Even
the term "conflict" itself is of course negatively connotated. Ways have
to be found to make conflict of interest resolution a routine issue and
not an accusation levelled against an individual.

I think that everyone on the board understands that you cannot
un-declare an obvious conflict of interest (like in your "ah, I don't
like by brother anyway so I can participate in the discussion about his
salary because both the OSMF and I privately have the same interest,
keeping his salary low" example). However, we will always need the
individual's cooperation in determining whether they have a conflict of
interest, and such cooperation can sometimes touch on issues that would
normally be viewed as confidential or private (and there has been
feedback from board members who did cooperate but found the process
intrusive). To give a hypothetical example: Say the board was discussing
whether to completely block a mapping firm from contributing to OSM
because they have been misbehaving too often. To determine whether a
board member has a conflict of interest, we would have to ask questions
like "do you have friends or family working for that company", "have you
ever contracted or recommended that company in the past", "has the
company you are working for contracted or recommended that company in
the past", "do you have any financial stake in that company", etc.etc. -
and this list could be expanded by indirection at will ("has your
previous employer worked with that company", "does a family member of
yours have a friend working for the company", ad infinitum.

The truth is that you would have to look into someone's head to
determine a conflict of interest - and at the same time, the only person
who *can* look into that head is often blind on the eye that judges
themselves.

So, long story short, it's a damn difficult topic and it is hard to come
up with an elegant solution that's easy to use and ruffles no feathers.
What is seen as practical by one person can be naive to the next, and
what one board member may think is prudent sounds like bureaucracy
madness for another.

Bye
Frederik

-- 
Frederik Ramm  ##  eMail frederik at remote.org  ##  N49°00'09" E008°23'33"



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