CEA Conflict of Interest Management 2 — Questions and Answers
Question 1: An employee on a vendor selection committee discovers the leading bidder is owned by her brother-in-law. What is her FIRST obligation?
- Recuse herself and disclose the relationship to her supervisor (Correct answer)
- Vote against the vendor to avoid favoritism
- Continue participating since the vendor may be the best choice
- Ask her brother-in-law to withdraw the bid
Correct answer: Recuse herself and disclose the relationship to her supervisor
Immediate disclosure and recusal are required before any participation in the decision continues.
Question 2: Which of the following BEST describes a 'potential' conflict of interest?
- A situation where a conflict has already influenced a decision
- A circumstance that could develop into an actual conflict if certain events occur (Correct answer)
- A conflict that has been disclosed but not yet resolved
- Any situation involving financial gain by an employee
Correct answer: A circumstance that could develop into an actual conflict if certain events occur
A potential conflict exists when foreseeable future circumstances could create an actual conflict.
Question 3: A hospital board member also serves on the board of a pharmaceutical company that sells drugs to the hospital. This is BEST classified as:
- An apparent conflict only, since no decision has been made
- A structural or positional conflict of interest (Correct answer)
- A personal conflict of interest
- A non-issue if the board member abstains from votes
Correct answer: A structural or positional conflict of interest
Holding dual roles that place competing loyalties in tension constitutes a structural/positional conflict of interest.
Question 4: After disclosing a conflict of interest, an employee continues to participate in the related decision with management's tacit approval. This approach is MOST problematic because:
- Disclosure alone is never sufficient without formal documentation
- Tacit approval does not constitute proper authorization or a managed resolution (Correct answer)
- The employee should have resigned rather than disclosed
- Management approval removes all ethical obligations
Correct answer: Tacit approval does not constitute proper authorization or a managed resolution
Informal or silent approval fails to create a documented, enforceable conflict management plan.
Question 5: A researcher receives a grant from a pharmaceutical company and later publishes a study on that company's drug. Ethics standards require her to:
- Decline the grant before beginning the study
- Disclose the funding relationship in the published study (Correct answer)
- Have a neutral party conduct the study instead
- Return the grant after publication
Correct answer: Disclose the funding relationship in the published study
Disclosure of funding sources in publications is the standard requirement to allow readers to assess potential bias.
Question 6: Which element is LEAST likely to be included in an effective conflict of interest policy?
- Procedures for disclosure and review
- Penalties for non-disclosure
- A list of approved vendors (Correct answer)
- Definitions of what constitutes a conflict
Correct answer: A list of approved vendors
Conflict of interest policies address disclosure, review, and penalties — not pre-approved vendor lists, which belong in procurement policy.
Question 7: An attorney represents both the buyer and seller in a real estate transaction without informing either party. This violates conflict of interest principles PRIMARILY because:
- Real estate attorneys are prohibited from earning dual fees
- The attorney owes undivided loyalty to each client, which dual representation compromises (Correct answer)
- The transaction value exceeds regulatory thresholds
- The attorney failed to file required government disclosures
Correct answer: The attorney owes undivided loyalty to each client, which dual representation compromises
Professional duty of loyalty requires that the attorney's representation not be compromised by competing client interests.
CEA Conflict of Interest Management 2
An employee on a vendor selection committee discovers the leading bidder is owned by her brother-in-law.
What is her FIRST obligation?