The Essentials of Addressing and Managing Conflicts of Interest

Personal pursuits and relationships outside the workplace lead to richer, more fulfilling lives for employees. Inside the workplace, gifts and entertainment given or received in the course of a job can strengthen business bonds. This all adds up to a better working environment and balanced life for employees.

But what happens when these situations conflict with the interests of the organization, or put your organization at risk?

Disclosure of potential conflicts of interests (COI) is a necessary step in proactively addressing and mitigating negative consequences. Some examples of conflicts include:

  • Board participation
  • Outside employment
  • Gifts and entertainment
  • Advisory organizations
  • Outside investments
  • And many more

As you work to reduce risks to your organization, it’s important to ensure employees are also committed to the success of the business. Fostering an environment of transparency protects both the employer and employee – limiting potential conflicts and preventing clashes between the company and its employees. Integrating a holistic approach to COIs into your ethics and compliance program that defines, trains, and collects conflicts of interest is a simple process that can deliver powerful results. Properly managed with automation and efficiency in mind can give countless hours back to your team.

Where To Begin

The first step in addressing conflicts of interest is to clearly define what is considered to be a conflict for your organization. When drafting a COI policy, organizations should:

  • Clearly define “conflict of interest” as it relates to their business
  • State expectations of the workforce
  • Detail any related disciplinary actions for not disclosing conflicts
  • Provide steps for employees to take to disclose any real or perceived conflicts of interest

A robust COI policy serves as a point of reference for employees, should their situations change throughout the year. As a policy regarding conflicts of interest is an important piece of any organization’s overall set of policies, this resource should be made easily accessible to employees to drive adoption and commitment.

Ongoing & Comprehensive COI Management

After drafting a COI policy, the next step is to train employees with a tailored conflicts of interest course. This increases accountability and reduces risk – creating a culture where doing the right things inside and outside the workplace is second nature. Training employees on this topic is a strategic initiative and delivers positive outcomes for your organization. Before launching an annual conflicts of interest campaign, it’s important to deploy a course that trains on:

  • How your organization defines conflicts of interest
  • Examples of situations where conflicts may exist
  • Key questions to ask if you suspect a conflict
  • How to disclose actual or perceived conflicts

Training throughout the year to reinforce valuable lessons, as well as introduce relevant and emerging situations, such as declining a gift in the holiday season, is necessary to refresh employees on this process as situations change throughout the year.

Some conflicts of interest are unavoidable, and these details need to be disclosed in an effort to mitigate potential risks to both the employee and organization. To effectively capture potential conflicts, a disclosure management solution is a necessary tool. This provides a method of communication for the employees to disclose any conflicts and notifies managing teams when a disclosure is made. This prompts a deeper dive into the potential conflicts to identify risks.

Adopting an automated approach to identifying and managing conflicts of interest provides consistency and drastically reduces the hours devoted to launching an annual campaign through a traditional process, such as manual email or an online survey tool.

3 Core Components

Comprehensive COI management requires:

Managing COIs with an ad hoc system and inconsistent training leaves organizations vulnerable to risk. By implementing a COI disclosure and management system backed by policy and training, organizations are well-positioned to avoid consequences of backlash stemming from COI issues.

To learn more about how NAVEX solutions work together to define, train employees on, and manage conflicts of interest:

Download the COI Solution Brief

Chat with a solutions expert to learn how you can take your compliance program to the next level of maturity.

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