There has been much talk of late in Hong Kong about ex public officials leaving public service and joining the private sector. In some instances the person has been forced to resign from their newly appointed role following an allegation that they have a conflict of interest. In one case, the person concerned was forced to resign within days of starting their new role. The suggestion that a former government employee should be banned from moving to the private sector is a common misconception and is most likely an unreasonable restraint on the person’s ability to earn a living. With some common sense ethical principles and a high standard of integrity of the person concerned, such transfers are possible and are often a very good opportunity to bring business and government closer together.
Opponents to such public to private transitions often cite the argument that the person being transferred has an inherent conflict of interest and that any transfer is impossible. The fact that a person is in a position of conflict, or that other people may perceive him/her to be in a position of conflict is not of itself enough to disallow that person from working in the private sector. Conflicts of interest exist in everyday business and with simple procedures and common sense they can be managed. Managing conflicts of interest are one of the oldest principles of business and the law working together. There are some key ways to manage a conflict of interest including managing the specific area of work that the person works within and trying to limit and direct areas of conflict. For example, it is always best to put the person in a role that does not directly overlap with their previous position in Government. For example, if the person previously held the position of Secretary of Health for a region within Hong Kong, their private sector role might be in a different region or a different faculty.
Opponents also suggest that the person in their public sector role would have had access to certain types of confidential or state secrets. In many senior government roles, this would certainly be the case, however, this fact alone does not mean of itself that the person could not be employed, it simply places an additional onus on the person to make sure that they exercise extreme caution around the use of that information, including that which is in their own residual unaided memory. While sometimes difficult, this sort of issue is dealt with daily by anyone in business that has ever changed companies and moved to a competitor. It is a basic principle of ethics and personal integrity and can certainly be managed with some good common sense.
In some cases a person in a perceived or actual conflict of interest may need to further protect themselves and their image of impartiality by choosing not to vote in certain decisions or partake in certain meetings if doing so would create a conflict or otherwise increase the perception of a conflict. Members of company boards are quite commonly excusing themselves from meetings when transactions are being discussed in which they have an interest. These good governance principles have existed for many decades.
There is also a view that ex public sector employees are unable to join the private sector because they continue to receive ongoing payments from the Government. This is also a misconception. In the government sector, it is common for senior long serving employees to receive some form of benefit when their employment finishes. This is often some known as a government pension or other form of regular payment. Historically, Governments paid such benefits to employees, as, unlike the private sector, Governments were not required to contribute to retirement benefits (like the statutory mandatory provident fund in most countries). In order to provide some retirement benefit many governments provided a percentage of pre-retirement income as an ongoing pension post retirement. In most cases, the rules surrounding such payments do not prohibit the person from carrying on other employment.
There is a long held legal doctrine that placing restrictions on post employment are unenforceable unless they are reasonable and the employee receives a direct benefit for giving up that right. In the absence of any valid restraint, restricting an ex official of the Government is unfair and unreasonable. Good ethical principles and a high standard of personal integrity should allow that individual to respect their previous employment and work in the public sector to their benefit and for the benefit of shareholders and taxpayers alike.
Scott Lane is the Principal of The Red Flag Group. This article is a series of Articles previously published in The South China Morning Post.
