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Chapter 1A: Conflict of Interest in ARCHITECTURE

(Business Verses Profession)

I have always wondered about the essential differences between Business and Profession.

The thin line that divides the two could actually be resolved if some code of ethics for
Practising Architects could resolve the issue of Conflict Of Interest. This Conflict of Interest
is also a very visible feature of Practice of Law and Medicine. I have read some literature on
the same and reproduced an abridged version of the same below.

Conflict of interest is plainly important in the practice of architecture. Conflict of interest

should generally be avoided, but when avoidance is not possible or at least not reasonable,
the conflict must be fully disclosed to all appropriate parties and their consent must be won
before the architect can proceed.

Some typical cases of Conflict of Interest and circumstances are discussed below and Rules
Framed there under are discussed below

1. Rule 1: An architect “shall not accept compensation for services from more than one
party on a project unless the circumstances are fully disclosed to and agreed to … by
all interested parties” Both disclosure and agreement are to be “in writing”.
• An Architect has ordered a large number of windows from a supplier who later on
produces a rebate check in the name of the Architectural firm.
• The Architect cannot accept the check even if it comes as a surprise and has to
inform his client and all other interested parties. All these other parties must
approve of his action of accepting the payment.
• The rebate could be an incentive to the Architect for placing the order.
• The other window suppliers could be at a competitive disadvantage if they had not
been informed of the rebate earlier
• The contractor or petty contractor may be would complain of low quality of the
product when he starts using the same and the quality controlling authority i.e. the
Architect would have not much say as he had received a rebate check
• The notion that the Architect’s professional judgment will not be affected is not
relevant
• The client may, for example, require the architect to hand over the entire rebate (as
well as ask other suppliers whether they will meet the competition).
• However, because the architect’s fee is often a percentage of the total cost of the
project, this solution may not be the best. It would create a “perverse incentive” The
architect would, in effect, be punished for saving the client money. However an
Architect has to work in the best interests of his client.

Chapter 1A Conflict Of Interest in ARCHITECTURE (Business Verses

Profession) Complied by Ar. Arthur Cutinho
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2. Rule 2: An Architect must exercise discretion when recommending either a product in

which he has financial interest like shares in a company manufacturing architectural
products and also when recommending loans to Contractors.
• The architect must assess whether the interest (direct or indirect) is “substantial
enough to influence his or her judgment in the performance of professional services”
• The rationale for allowing some discretion (concerning whether an interest is
substantial enough) is that avoiding all financial interests seems too much to ask.
• If the interest is enough to influence the judgment, the architect must fully disclose it
in writing to the client or employer (thus creating a paper trail). If the client or
employer objects to the business association or the financial interest, the architect
must either terminate it or offer to give up the commission or employment.
• The client or employer may have good reason to accept the bifurcated loyalty that
the business association or financial interest in question creates, but the decision is
the client’s or the employer’s (or both, when an architect has both a client, the
person who has hired the firm, and an employer, the architectural firm).

3. Rules 3: Architects are simply forbidden to solicit or accept payments in return for
specifying or endorsing a supplier.
• Strictly speaking, this rule does not concern conflict of interest but concerns bribes,
kickbacks, and other side payments that buy the architect’s judgment.
• This Rule admits of no exception, even when all the relevant parties would agree to
the payment after full disclosure. So, for example, an architect cannot have an
agreement with a supplier that she or he will recommend a certain window frame
even if she or he fully informs the clients of that agreement and the clients say,
“Fine”.
• Even legal payments for specifying or endorsing a supplier (say, lending one’s name
to an advertising campaign) are forbidden.
• How come this conflict of interest is not allowed when the relevant parties have
consented after full disclosure? The answer seems to be this: conflict of interest
threatens professional judgment. It makes it less reliable than it would otherwise be.
The architect has, in this respect, signed away judgment. By the agreement, the
architect gives up future judgment of the appropriateness of the product in
question.
• Side payments for endorsement are also, in one respect, unnecessary. The client or
employer derives no benefit whatsoever from them, and (generally) the architect
does not need them to survive or prosper. They are simply not an essential part of
practicing architecture.
• Selling one’s judgment does not, in general, create a conflict of interest (that is, it
does not threaten professional judgment). However, sometimes it does. For
example, if Person A is paid to endorse a product as part of an advertising campaign,
Person A will have a greater tendency to specify that product than he or she
Chapter 1A Conflict Of Interest in ARCHITECTURE (Business Verses
Profession) Complied by Ar. Arthur Cutinho
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otherwise would. That tendency is what makes Rule 2.3 in part a rule concerned with
conflict of interest. Forbidding endorsements for pay eliminates one sort of conflict
of interest.

4. Rule 4: When acting in the role of an Arbitrator between Client and Contractor, an
architect is to “render decisions impartially, favouring neither party in the dispute”
• The architect is paid by the owner and owes loyalty to the owner, but has to settle
disputes between the owner and a contractor, subcontractor, or supplier concerning
whether work has been performed as the contract requires or whether the contract
requires this or that impartially.
• If the architect does not believe himself or herself to be capable of acting in that
way, he or she “may appropriately decline to act in those two roles” (as the agent of
the owner and as a judge between the owner and an adversary). The architect’s role
in such circumstances has a threat to independent judgment built into it (an interest
but not a “special” interest).
• Both architects and those they work with are aware of that threat to independent
judgment. They have traditionally tolerated it since the alternative is whatever delay
is necessarily consequent on seeking a truly impartial judge far from the work site.
• If the decision is obviously biased, the architect would be subject to discipline under
the rule, even though the architect believed himself or herself to be impartial.

5. Rule 5: An architect making a “public statement on architectural questions” (that is,

speaking publicly in a professional capacity) has to “disclose when he or she is being
compensated for making such statement or when he or she has an economic interest
in the issue”
• For example, an architect paid by a developer to testify on behalf of a project would
have to state that she or he is being so paid.
• An architect writing a journal article on behalf of a certain manufacturer’s product
would have to disclose ownership of even a single share of stock in that company.
• For public statements, the standard of disclosure should be more demanding than
for statements to client, employer, or to other private persons
• The public is entitled to know that the architect might have a certain bias (or even
that, from the public’s perspective, might seem to have a certain bias), a legitimate
bias if it is disclosed but otherwise an illegitimate bias.
• If architects routinely made public statements in the service of clients without
acknowledging that service or in the service of a private interest (however small)
without acknowledging that service, their public statements would eventually lose
the power that comes from their being thought to be independent.

Chapter 1A Conflict Of Interest in ARCHITECTURE (Business Verses

Profession) Complied by Ar. Arthur Cutinho