Conflict of interest

“Compete when you must; cooperate when you can” is a mantra we hear frequently now. Make no mistake, inter-business cooperation is the most profitable form of business. So much so that there are extensive laws to prevent any cooperation that would disadvantage the consumer. Rigging prices in a market is definitely out. And yet, cooperation is essential for modern business strategy. So where is the line between cooperation and theft?

The big tech companies compete fiercely and publicly. They cooperate, I am sure, on many matters that affect their independence, their relative lack of regulation and their relationships with state companies and independent organisations that have monopolies of supply sources or market outlets. Every business demands cooperation between competitors at times. There was a hilarious case in the 1960s/1970s when the three leading bread producers in the UK were taken to court for agreeing price increases. The case was complex since the volume of bread in the UK is somewhat like the volume of rice in Asia – considerable.

The court’s finding was that there had been collusion and each company was fined a derisory sum. But the ruling included instructions that the three companies must continue informing each other of any intended price increase in order to avoid upsetting huge product and labour volumes between the three companies. The ruling added that the information was to be communicated by letter, not verbally over dinner as it had been in the past! It cost £16M to reach this lofty conclusion.

Conflict of interests pervades all politics, all businesses and all media today. A non-executive director of a business, part of whose main, executive, work relates to supply that could be relevant to the company, must watch his involvement in matters where he can be thought to have a vested interest in the outcome of a discussion. In fact, we all have vested interests all the time. They must now be totally transparent. Cooperating businesses increasingly have directors sitting on each other’s boards. The scope for conflict of interests burgeons accordingly.

The trouble is that we have made so many laws about behaviour that we now consider it the case that if no law bans something, it is legal. This translates speedily into “Everything not forbidden is compulsory”. The areas of discretion are considerable, of course, and most people think that personal choice of good over evil is still an important part of life’s discipline. The development of robots and the advent of Artificial Intelligence will push for tighter rules since both these are dependent on input rather than self-generation.

AI, however, is moving quickly into a realm of its own where the initial fundamental inputs are critical to what subsequently develops and the constraints on that development have to be human-induced if robots are not to take over the policing of humanity. This neatly illustrates the conflict humans increasingly have between individuality and system. The concept of freedom is about the individual. System is about making rules that avoid the need for personal deduction – following the guidelines gets you where you want to go.

But does it do so with the level of fulfilment that comes from solving the puzzle yourself? The number of people now seeking a simpler and more self-sustained way of life suggests not. Since fulfilment is the key to happiness in this world we might suspect that self determination has much to do with satisfaction. It is only a short step from self determination to self-discipline. Which brings us back to conflict of interests. If rules do it we shall spend our time trying to circumvent them.

If we do it ourselves we will be able to hold our heads up as people of substance and character.

I know which I’d rather my business was.