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Public Service and Fiduciary
EthicsMonday, September 17, 2012
Presented By:Scarlet D. Hughes, M.S.W.
San Joaquin County Public Guardian/Conservator
LEARNING OBJECTIVES
To become familiar with public service ethical concepts
To learn fiduciary duty conceptsTo learn the distinctions between
fiduciary duty and public service duty To learn as a public servant you are
held to a higher standard To learn the importance of public
perception regarding your ethicsTo encourage thinking beyond legal
restrictions Page 2
TABLE OF CONTENTS1. Public Service Ethics
Principles of Public Service Ethics Ethics vs. Ethics Laws Universal Ethical Values Values & Public Service Responsibility & Public Service Respect & Public Service Loyalty & Public Service
2. Fiduciary Ethics What is a Fiduciary? Fiduciary Obligation
Page 3
TABLE OF CONTENTS
3. Ethical Conflicts Dilemmas Ethical Conflict: Fiduciary Responsibility vs.
Public Interest Public Perception “No Perks” Rules
4. Helpful Concepts5. Questions/Comments/Corrections6. Credits
Page 4
Page 5
PRINCIPLES OF PUBLIC SERVICE ETHICS
Serving the Public InterestNot personal interest
How does one know “The Right Thing to Do”Laws are a guideBut only set minimum standards Ethics laws set “required conduct”Ethics law violations
Page 6
ETHICS VS. ETHICS LAWSThe Same Thing?
Ethical considerations go beyond the law’s minimum requirements
Ethics is what we ought to do – not just what we have to do
Legal doesn’t necessarily mean ethical
Ethical behavior is governed by “values”
Page 7
UNIVERSAL ETHICAL VALUES
Trustworthiness/HonestyFairnessResponsibilityRespectLoyalty
Page 8
VALUES & PUBLIC SERVICE
TrustworthinessBe truthful - don’t knowingly use or
give false or inaccurate information – keep your word
Avoid appearance of personal interest, bias, conflict of interest
Don’t accept giftsFairness
Merit based decisionsAgency policies applied consistentlyRefrain from decisions when there is a
conflict of interestPage 9
RESPONSIBILITY &PUBLIC SERVICE
ResponsibilityPromote the efficient use of agency
resources
Do not use agency resources for personal or political benefit
Represent your agency with professionalism, integrity, and appropriately as you are authorized to do
Page 10
RESPONSIBILITY &PUBLIC SERVICE cont.
Take Responsibility for your own actions, even when it is uncomfortable to do so
Disclose suspected instances of impropriety
Do not disclose confidential information without proper legal authorization
Page 11
RESPECT & PUBLIC SERVICE
Treat clients, family, public, peers and staff with courtesy, even when you disagree with them
Focus on merits, not personality traitsSolicit diverse opinions and build
consensus, when appropriateFollow through on commitments,
keep others informed, and make timely responses
Be approachable and open-mindedPage 12
LOYALTY & PUBLIC SERVICE
Hierarchy of Ethical Duty: whose interest do you service first:Hint – Always the Client First Over:
Co-workers/Sub-ordinates Supervisor Manager Director County Administrator Board of Supervisors Legislators
Page 13
Page 14
WHAT IS A “FIDUCIARY”?
Has the characteristics of trust Should inspire a feeling of confidence Requires “scrupulous good faith and
candor” Fiduciary laws are created to protect the
less powerful, fortunate and/or sophisticated
Undertaking “to act primarily for another’s benefit”
Your fiduciary duty to the client always trumps public interest
Page 15
WHAT IS A “FIDUCIARY”? cont.
A “Fiduciary” has 3 general duties:Loyalty–Maximizing the Conservatee’s or estate’s interests is primary (opposite of a “conflict of interest”)
Good Faith–Making the Conservatee’s or estate’s interests one’s own (opposite of “self dealing”)
There can be no “what do I get out of this?”Care – Exercising the same care and prudence as you would for yourself (opposite of neglect/negligence)
Probate Code §9600(a)–“…ordinary care and diligence …” means layperson or ‘non-expert’, not a lower, standard of care.
Page 16
FIDUCIARY OBLIGATION
Performance Standards Contrasted: Fiduciary Duty – the highest level of care and
due diligence; our constant goal
Fiduciary Breach – not exercising loyalty, good faith and due care; failure = surcharge;
Civil action-ability – engaging in carelessness or negligence; failure = loss of office;
Criminal prosecution – engaging in gross negligence or willful malfeasance; failure = jail and/or fine.
Page 17
Page 18
ETHICAL DILEMMASTwo Common Types
Right vs. rightSituations where we believe there are
two conflicting sets of "right" values Torn between loyalty to someone or
something and your responsibility to the client or public
Your responsibility to your client trumps the value of loyalty or friendship
Ethics requires you do what's right, regardless of the personal costs.
Page 19
ETHICAL DILEMMASTwo Common Types
Personal CostInvolves significant personal costAlso called moral courage ethical
dilemmasCost may be:
Financial – missed opportunity for financial gain Emotional – such as a loss of a friendship Social – loss of prestige, respect or social
position
The answer is usually simple but not easy!
Page 20
ETHICAL CONFLICT FIDUCIARY RESPONSIBILITY VS
PUBLIC INTEREST
Example of an ethical conflict between fiduciary duty and public service dutiesFees – we have an public service
obligation to not give a “gift of public funds”
Indigent client owes fees – how aggressive should you be?
Which obligation is highest?Your examples?
Page 21
Not only an introspective process We are stewards of the public’s trust The public must have confidence that
indeed the right thing has been done The “right thing” is for the public to know
that first the client’s and then the public’s interests are the guiding motivating factors in a public employees’ actions.
Err on the side of, when in doubt – don’t Ask yourself the hard questions
PUBLIC PERCEPTION
Page 22
“NO PERKS” RULES Underlying Principles
Statement of Economic Interests (Form 700)
Democratic notion that public servants should be treated just like everyone else
Should not receive special benefits beyond the compensation provided by law
The “no-perk” rules fall into two basic categories:Perks that others offer you, andPerks that you give yourself because of
your access to and decision-making discretion over the use of public resources
Page 23
HELPFUL CONCEPTS
First, Some Thoughts: Fiduciary obligations do not naturally
“flow” from societal norms They are created by the law to protect
the less powerful, fortunate and/or sophisticated from those who might take advantage of them.
Thus, “avoiding the appearance of improprieties” is an important concern
Page 24
HELPFUL CONCEPTS
Demonstrating care, loyalty and good faith are critical, yet these ideals are hard to visualize and implement at the operational level
Standardization and consistency help!
Page 25
HELPFUL CONCEPTS
Operational Controls That Can Help:
Dual Custody – requiring two people be present when carrying out key duties- Witnesses Back-up
Segregation of Duties – splitting work (especially work involving financial transactions) among diverse staff
No Delegation of Duties to Outsiders!
Page 26
HELPFUL CONCEPTS
More Operational Controls That Can Help:
Policies and Procedures – conforming performance to consistent standards
Screening/Background Checks – Deputies/Staff/Vendors
Physical Controls – pre-numbered bags, vault access, numbered cable ties, etc.
Page 27
HELPFUL CONCEPTS
More Operational Controls That Can Help:
Use your County Counsel! Document, Document, Document!
(Especially financial transactions!) Notice, Notice, Notice! Independent Audits Recourse to the Courts (petition for
instructions on noticed hearing)Page 28
Page 29
Credits
Craig Hendrickson, MBA, JD, Los Angeles County PA; a very special thank you for the use of his ethics training materials
State of California – Department of Justice, Office of the Attorney General; AB 1234 Ethics Training Page 30