Conflict of Interest Resolution: A Step-by-Step Guide

Effective conflict of interest resolution can be a hard, complex process. They don’t call it a ‘conflict’ for nothing, after all. Certain conflicts of interest, if not quickly identified and effectively addressed, can pose serious ethical, financial, and legal complications for employees and organizations. That’s why it’s absolutely vital for businesses to identify and resolve conflicts of interest to maintain integrity and trust in organizations, and to successfully avoid any potential consequences. 

In this article, we’ll take a step-by-step look at the conflict of interest resolution process, and how your organization can navigate it, starting from identification and disclosure, all the way through investigation and decision-making, to resolution and documentation. 

COI Disclosure and Identification

Before your organization can do anything else, one of the most crucial steps in the conflict of interest resolution process is early disclosure and identification of potential COIs. This may come in the form of a checklist of questions to ask new and existing employees, a disclosure form or questionnaire, or other methods. Depending on the individual needs of a business and its employees, disclosure methods may vary, but no matter what method your company chooses, it’s vital that you ensure the disclosure process is consistent for everyone across the board within your organization. Nobody should be able to get ‘off the hook’ when it comes to disclosing conflicts of interest to maintain accountability at all levels. 

When COI disclosures are made, consider how these disclosures will be reviewed, and how conflicts of interest will be identified. It’s also important that confidentiality be maintained at this stage in the process, to ensure honest reporting and fair review of the COI in question.

Investigation

After identifying a conflict of interest, relevant managers or supervisors should initiate an investigation to gather all the facts. This process of investigation should be defined and formalized in detail so nobody under investigation feels unfairly scrutinized; crucially, an effective investigation should maintain impartiality and fairness at all times. 

Identify and explain to the person being questioned who is being involved in the investigation of the disclosure conflict (such as compliance officers or legal experts). Additionally, once completed, the outcome of an investigation should be clearly communicated to all involved parties. 

Resolution

Once identified and investigated, consider your strategies for resolving the conflict of interest in question. Possible strategies for an employee with a conflict of interest could include recusal from certain decision-making processes, or, if the COI is a financial one, having the employee divest or sell the holdings that are creating the conflict. The employee might also need to transfer certain responsibilities to one or more of their colleagues. 

If a conflict of interest cannot be completely avoided, instead consider creating a mitigation plan to help manage the effects of this COI on the organization. An effective mitigation plan could include setting up blind trusts, creating ethical walls, or establishing oversight committees to monitor certain decisions. 

These and any other relevant strategies for conflict of interest resolution should already be clearly stated in your organization’s COI policies. After action has been taken on addressing the conflict, explain to all relevant parties why the decision to take certain courses of action was made. Remember that as you implement your resolution strategy, maintaining clear communication is imperative! 

Documentation

Remember, it’s only science if you’re writing it down! Throughout the conflict of interest resolution process, you should be keeping comprehensive, organized documentation on the conflict of interest, what steps were taken to address the conflict, and the results and consequences once those steps were applied practically. This includes taking note and keeping copies of documents like disclosure forms, investigation reports, and resolution agreements. Good record-keeping is always necessary for ensuring both accountability and compliance. These records and documents can also serve as a useful reference tool should similar problems arise again within the organization. 

ComplianceBridge Ensures a Smooth Conflict of Interest Resolution Process

It’s the 21st century! We live in the future, and there’s just no good reason for the conflict of interest resolution process to be happening manually, with easily lost or damaged paper forms. Consider instead taking advantage of ComplianceBridge’s conflict of interest software, designed to help you manage and streamline the conflict of interest disclosure and resolution process.

Our robust COI software lets you design a conflict of interest resolution process designed to meet the exact needs of your organization. Create questionnaires to digitally distribute to employees, with the option of creating custom question sets and tailoring distribution to fit certain departments, groups, or locations. You also have the option of scheduling regular disclosure periods, so the process can adapt with your employees and business.

Our software also lets you see reporting in real time, making it easier for management to collect data and identify problem areas that may need further investigation, and also has the ability to flag certain responses or trends for closer inspection. Once collected, you can also use COI data to generate reports and export them for further study. And all of this is fully documented and stored in a centralized, secure location, so you never have to worry about not having access to important information.

Request a demo with ComplianceBridge to find out how we can start helping you perfect your organization’s conflict of interest resolution process today!