THE MAGAZINE FOR PROFESSIONAL ENGINEERS 11
specialized knowledge (see Section III. 4.a
of the Code) as a board member of the
utility that the utility would likely engage
in a project that would need engineering
services, which he could provide. The facts
of the case do not indicate whether Chance
had informed the board at the time of the
vote that he had started his own engineering firm, as could have been required
by Section II. 4.a of the Code.
In any case, Chance’s actions could
result in public suspicion that he had
created a competitive advantage for
himself due to the particular and specialized knowledge of the project he had
acquired during his service to the utility.
While arguably Chance’s objectives as a
director of the public utility who voted to
approve financing for the new plant may
have been completely pure, his decision to
resign from the board following the vote
and thereafter submit a proposal to serve as
the owner’s representative for the utility on
the project at the very least calls into question his objectives and suggests possible
impropriety on his part.
It was not ethical for Chance to submit a
proposal to serve as the owner’s representative for the utility on the project.
NSPE Code References
Section II. 3.a., Section II. 4.a, Section II. 4.d.,
Section II. 4.e., and Section III. 4.a.
For more information, see Case No. 13-1.
What Do You Think?
Was it ethical for Chance to submit a
proposal to serve as the owner’s representative for the utility on the project?
What the Board of
Ethical Review Said
As a general matter, a conflict of interest is
considered to occur when an individual or
organization is involved in multiple interests, one of which could possibly corrupt
the motivation for an act in another. The
presence of a conflict of interest is independent from the execution of an impropriety.
Therefore, a conflict of interest can be
discovered and voluntarily defused before
any corruption occurs.
A widely used definition of a “conflict
of interest” is a set of circumstances that
creates a risk that professional judgment
or actions regarding a primary interest
will be unduly influenced by a secondary
interest. Primary interest refers to the prin-
cipal goals of the profession or activity,
such as the protection of clients, public
health and safety, and the duties of public
office. Secondary interest includes not only
financial gain but also such motives as the
desire for professional advancement and
the wish to do favors for family and friends,
but conflict of interest rules usually focus
on financial relationships because they
are relatively more objective, fungible,
and quantifiable. The secondary interests
are not treated as wrong in themselves,
but become objectionable when they are
believed to have greater weight than the
primary interests. The conflict in a conflict
of interest exists whether or not a partic-
ular individual is actually influenced by the
secondary interest. It exists if the circum-
stances are reasonably believed (based
on experience and objective evidence) to
create a risk that decisions may be unduly
influenced by secondary interests.
The key to understanding this case,
according to the Board, relates to the
fundamental question as to whether
Chance’s professional judgment and actions
regarding his primary interest (i.e., serving
as a director of the public utility) was unduly
influenced by a secondary interest (being
retained to serve as the owner’s representative on the contract for the new power
plant). It is the Board’s view that Chance’s
actions in serving as a director of the public
utility, voting to approve financing for the
new power plant, and then resigning and
submitting a proposal to serve as the
owner’s representative on the power plant
project at a minimum creates the appearance of a conflict of interest and suggests
more improper motives.
Chance may have intended to resolve
the conflict of interest by resigning from
the board of the utility prior to submitting his proposal to provide engineering
services for the project, as would be proper
under Section II. 4.e of the Code of Ethics.
However, at the time Chance formed
his own company, he had particular and
A Question of Motives
An engineer wants a piece of a local power plant project. But where do his interests lie?
Engineer John Chance is appointed
officer and partner at a full-service
design, engineering, and construction
firm in his hometown. Chance is also
appointed by the mayor to the board
of directors of a local public utility—
the state’s largest. Coinciding with
Chance’s service on its board, the
utility spends three years researching
options for a new power-generation
plant. Two years into project research,
Chance resigns his professional position to form his own engineering-construction management company.
However, Chance remains on the
public utility board. The public utility’s staff informs Chance and other
board members of its decision to build
a new power plant and asks for immediate incremental approval to advance
financing. Chance votes to approve
financing and the vote passes. After
the vote, Chance resigns from the
board, and about a month after his
resignation, he submits a proposal to
serve as the owner’s representative
for the utility on the project.