Hostname: page-component-cd9895bd7-8ctnn Total loading time: 0 Render date: 2024-12-23T05:33:27.406Z Has data issue: false hasContentIssue false
  • English
  • Français

Policy solutions to conflicts of interest: the value of professional norms

Published online by Cambridge University Press:  06 October 2017

SUNITA SAH
SUNITA SAH*
Affiliation:
Johnson Graduate School of Management, Cornell University, Ithaca, NY, USA
*
*Correspondence to: Sunita Sah, Johnson Graduate School of Management, Cornell University, Ithaca, NY, USA. Email: [email protected]
Get access Rights & Permissions [Opens in a new window]

Abstract

Advisors, such as physicians, financial advisors, lawyers and accountants, often face a conflict of interest – that is, a clash between their professional and personal interests. Such conflicts can lead to biased and corrupt advice. In this paper, I focus on how conflicts of interest can cause good people to unintentionally cross ethical boundaries and how we can avoid succumbing to this bias. I first discuss two mechanisms through which advisors may convince themselves to accept conflicts of interest while vehemently believing that they remain unbiased: (1) a sense of entitlement; and (2) a sense of invulnerability created by their belief in their own professionalism. I then discuss several proposed policy solutions to manage conflicts of interest, such as education and training, sanctions, second opinions and disclosure policies. These proposed solutions for dealing with conflicts of interest are largely based on inaccurate intuitions regarding the psychological processes that underlie them; consequently, these policies tend to fail or have unintended consequences. In the absence of eliminating conflicts of interest, solutions that are more likely to be successful consist of identifying and changing the professional norms that exert powerful influences on employee behaviour.

Type
Articles
Information
Behavioural Public Policy , Volume 1 , Issue 2 , November 2017 , pp. 177 - 189
Copyright
Copyright © Cambridge University Press 2017 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Aquino, K. and Reed II, A. (2002), ‘The self-importance of moral identity’, Journal of Personality and Social Psychology, 83(6): 1423–1440.Google Scholar
Arnold, C. and Geewax, M. (2016), ‘White House to financial advisers: put savers’ interests first’, NPR. Available at: http://www.npr.org/sections/thetwo-way/2016/04/06/473146587/white-house-to-financial-advisers-put-savers-interests-first [20 September 2016].Google Scholar
Babcock, L. and Loewenstein, G. (1997), ‘Explaining bargaining impasse: the role of self-serving biases’, The Journal of Economic Perspectives, 11(1): 109–126.Google Scholar
Bazerman, M. H. and Tenbrunsel, A. E. (2011), Blind spots: why we fail to do what's right and what to do about it, Princeton, N. J.: Princeton University Press.CrossRefGoogle Scholar
Cain, D. M., Loewenstein, G. and Moore, D. A. (2011), ‘When sunlight fails to disinfect: Understanding the perverse effects of disclosing conflicts of interest’, Journal of Consumer Research, 37(5): 836–857.Google Scholar
Campbell, E. G. et al. (2007), ‘A national survey of physician-industry relationships’, The New England journal of medicine, 356(17): 1742.Google Scholar
Chimonas, S. C., Brennan, T. A. and Rothman, D. J. (2007), ‘Physicians and drug representatives: exploring the dynamics of the relationship’, Journal of General Internal Medicine, 22(2): 184–190.Google Scholar
Cialdini, R. B. (2006), Influence: the psychology of persuasion, HarperBusiness.Google Scholar
Cialdini, R. B., Bator, R. J. and Guadagno, R. E. (1999), ‘Normative influences in organizations’, Shared cognition in organizations: The management of knowledge, 195–211.Google Scholar
Cohan, W. (2016), ‘Wells Fargo Scandal May be Sign of a Poisonous Culture’, The New York Times. Available at: http://www.nytimes.com/2016/09/17/business/dealbook/wells-fargo-scandal-may-be-sign-of-a-poisonous-culture.html [27 September 2016].Google Scholar
Cohn, A., Fehr, E. and Maréchal, M. A. (2014), ‘Business culture and dishonesty in the banking industry’, Nature, 516: 86–89.Google Scholar
Feldman, P. (2016), Drug companies pony up in illegal marketing cases, but critics wonder if penalties are enough, Available at: http://www.fairwarning.org/2016/05/drug-companies/ [19 September 2016].Google Scholar
Friedman, M. (2007), The social responsibility of business is to increase its profits, Springer. Available at: http://link.springer.com/chapter/10.1007/978-3-540-70818-6_14 [5 January 2016].Google Scholar
Gagnon, M. A. and Lexchin, J. (2008), ‘The cost of pushing pills: a new estimate of pharmaceutical promotion expenditures in the United States’, PLoS Medicine, 5(1): e1.Google Scholar
Gioia, D. A. (1992), ‘Pinto fires and personal ethics: a script analysis of missed opportunities’, Journal of Business Ethics, 11(5–6): 379–389.Google Scholar
Gunia, B. C., Barnes, C. and Sah, S. (2014), ‘The morality of larks and owls: unethical behavior depends on chronotype as well as time-of-day’, Psychological Science, 25(12): 2271–2274.Google Scholar
Hampson, L. A. et al. (2006), ‘Patients’ views on financial conflicts of interest in cancer research trials’, New England Journal of Medicine, 355(22): 2330–2337.Google Scholar
Lessig, L. (2013), ‘Institutional corruption defined’, The Journal of Law, Medicine and Ethics, 41: 553.Google Scholar
Levine, G. (2006), ‘Enron's Fastow slammed as slave of “insatiable greed”’, Forbes.com. Available at: http://www.forbes.com/2006/03/08/fastow-wed-one-cx_gl_0308autofacescan12.html [23 September 2016].Google Scholar
March, J. G. (1994), A primer on decision making: how decisions happen, Free Press.Google Scholar
March, J. G. and Olsen, J. P. (2004), The logic of appropriateness, Arena Centre for European Studies Working Papers. Available at: http://www.sv.uio.no/arena/english/research/publications/arena-publications/workingpapers/working-papers2004/wp04_9.pdf [16 December 2015].Google Scholar
Mayer, D. M. et al. (2009), ‘How low does ethical leadership flow? Test of a trickle-down model’, Organizational Behavior and Human Decision Processes, 108(1): 1–13.Google Scholar
Mazar, N., Amir, O. and Ariely, D. (2008), ‘The dishonesty of honest people: a theory of self-concept maintenance’, Journal of Marketing Research, 45(6): 633–644.Google Scholar
McKinney, W. P. et al. (1990), ‘Attitudes of internal medicine faculty and residents toward professional interaction with pharmaceutical sales representatives’, The Journal of the American Medical Association, 264(13): 1693–1697.Google Scholar
Moore, C. and Gino, F. (2013), ‘Ethically adrift: how others pull our moral compass from true North, and how we can fix it’, Research in Organizational Behavior, 33, 53–77.CrossRefGoogle Scholar
Moore, D. A. et al. (2006), ‘Conflicts of interest and the case of auditor independence: moral seduction and strategic issue cycling’, Academy of Management Review, 31(1): 10–29.Google Scholar
Ross, L. and Nisbett, R. E. (1991), The person and the situation: perspectives of social psychology, Mcgraw-Hill Book Company.Google Scholar
Ross Sorkin, A. (2012), ‘Conflicted, and often getting a pass’, The New York Times. Available at: http://dealbook.nytimes.com/2012/03/12/conflicted-and-often-getting-a-pass/ [10 June 2012].Google Scholar
Sah, S. (2017), ‘Conflict of interest disclosure and appropriate restraint: The power of professional norms, Cornell University Working Paper.Google Scholar
Sah, S. (2015), ‘Investigations before examinations: this is how we practice medicine here’, JAMA Internal Medicine, 175(3): 342–343.Google Scholar
Sah, S., Fagerlin, A. and Ubel, P. A. (2016), ‘Effect of physician disclosure of specialty bias on patient trust and treatment choice’, Proceedings of the National Academy of Sciences, 113(27): 7465–7469.Google Scholar
Sah, S. and Feiler, D. (2017), ‘Trust and the disclosure of conflicts of interest: The disclosure penalty and the altruistic signal’, Working paper.Google Scholar
Sah, S. and Fugh-Berman, A. (2013), ‘Physicians under the influence: social psychology and industry marketing strategies’, The Journal of Law, Medicine and Ethics, 41(3): 665–672.Google Scholar
Sah, S. and Larrick, R. (2017), ‘The invulnerability bias: self-perceived professionalism predicts increased acceptance of, and influence from, conflicts of interest’, Cornell University Working Paper.Google Scholar
Sah, S. and Loewenstein, G. (2015), ‘Conflicted advice and second opinions: benefits, but unintended consequences’, Organizational Behavior and Human Decision Processes, 130: 89–107.Google Scholar
Sah, S. and Loewenstein, G. (2010), ‘Effect of reminders of personal sacrifice and suggested rationalizations on residents’ self-reported willingness to accept gifts: a randomized trial’, The Journal of the American Medical Association, 304(11): 1204–1211.Google Scholar
Sah, S. and Loewenstein, G. (2012), ‘More affected = more neglected: amplification of bias in advice to the unidentified and many’, Social Psychological and Personality Science, 3(3): 365–372.Google Scholar
Sah, S. and Loewenstein, G. (2014), ‘Nothing to declare: mandatory and voluntary disclosure leads advisors to avoid conflicts of interest’, Psychological Science, 25(2): 575–584.Google Scholar
Sah, S., Loewenstein, G. and Cain, D. M. (2015), ‘Insinuation anxiety: fear of signaling distrust after conflict of interest disclosures’, Working Paper. Available at: http://media.wix.com/ugd/4aa4b7_ac680ce8d4224a46ab1f8cc54b684ab8.pdf [18 September 2016].Google Scholar
Sah, S., Loewenstein, G. and Cain, D. M. (2013), ‘The burden of disclosure: Increased compliance with distrusted advice’, Journal of Personality and Social Psychology, 104(2): 289–304.Google Scholar
Schweitzer, M. E., Ordonez, L. and Douma, B. (2004), ‘Goal setting as a motivator of unethical behavior’, Academy of Management Journal, 47(3): 422–432.Google Scholar
Sierles, F. S. et al. (2005), ‘Medical students’ exposure to and attitudes about drug company interactions: a national survey’, The Journal of the American Medical Association, 294(9): 1034–1042.Google Scholar
Tenbrunsel, A. E. and Messick, D. M. (2004), ‘Ethical fading: the role of self-deception in unethical behavior’, Social Justice Research, 17(2): 223–236.Google Scholar
Tenbrunsel, A. E. and Messick, D. M. (1999), ‘Sanctioning systems, decision frames, and cooperation’, Administrative Science Quarterly, 44(4): 684–707.Google Scholar
Tyler, T. R. (2005), ‘Managing conflicts of interest within organizations: does activating social values change the impact of self-interest on behavior’, in Moore, D. A., Cain, D., Loewenstein, G. and Bazerman, M. (Ed.) Conflicts of interest: challenges and solutions in business, law, medicine, and public policy, 13–35.Google Scholar
US Securities and Exchange Commission (2000), Hearing on auditor independence, Washington, D.C. Available at: https://www.sec.gov/rules/extra/audmin3.htm [16 September 2016].Google Scholar