We hear the phrase “conflict of interest” all the time, but we often take its meaning and importance for granted. At a company, a conflict of interest, or COI, arises when someone has a competing interest or obligation, whether it be personal, professional or financially related. Some popular examples include nepotism, accepting benefits from third parties, outside employment or maintaining close relationships with competitors, regulators or other business partners. Not all conflicts will negatively impact a company, but it’s still important to disclose all of them lest you be blindsided when something does happen.
COI disclosures are a regular and essential part of any compliance officer’s job, and there should be an appropriate system in place to manage the communication between them and the disclosing employees. Because the process is usually quite time-consuming and calls for a lot of followup to complete, most companies need the assistance of some kind of COI software to keep things moving along without completely eating up their time. Either that, or they find themselves neglecting the process, which leads to its own problems.
The Importance of COI
Conflicts of interest are unavoidable, and overlooking COI within your company, organization or institution leaves you vulnerable to many potential risks. Conflicts of interest can also mask more serious issues such as fraud, corruption or legal noncompliance. Therefore, COI should be a priority at every level from the board of directors to entry-level employees.
One of the biggest risks of a conflict of interest is unintentional bias that compromises the integrity of the work you’re doing. Even if an undisclosed interest didn’t actually lead to impropriety, the appearance of it is all that’s needed to make other employees, partners or the public question your integrity. Any potential bias – such as a manager showing favoritism to relatives or friends – can also escalate. Anyone who’s willing to cut corners for their family or friends may also be someone who’s willing to flaunt regulations or legal requirements.
Because a conflict of interest can be indicative of much more significant risks, proper assessment of COI and policy enforcement should be given the appropriate amount of attention. Your COI management program should include a variety of strategies including formal policies, companywide ethics training and regular COI disclosures. The right COI software solution can help you simplify these processes and procedures. A reporting tool will ensure you have a means to identify potential conflicts and take steps to proactively address them.
Relieve Pain Points With COI Software
While COI should absolutely be a focus of any compliance team, it is not always the easiest aspect of your compliance program to manage. To actually detect, prevent and mitigate the risk of COI effectively can become a huge undertaking. This is because each employee, department and level of an organization has its own risks. There are also different types of conflict such as financial, personal or business. This is where COI software can be your greatest ally.
Employees at all levels must regularly check in and report potential conflicts. Voluntary disclosures are not the totality of your COI program, but they are a vital factor. It’s very easy to fall behind on the process, though, especially for larger organizations. Each type of employee may have a separate assessment for their unique demands, and each type of employee may have their own check in schedule. Then, there may be special cases: new employees, contractors or business associates that come up sporadically. Keeping up with this process on your own easily leads to confusion as you juggle emails, assessments and spreadsheets.
COI software allows you to hand off the most tedious parts of the process. Automate the scheduling of COI assessments to go out on a regular basis for each type of disclosure. You can even schedule automatic reviews and republication of assessments, so you’ll know the questions your employees receive are up to date. With software managing the timeline, human brain power can be allocated to more higher-level tasks.
It’s an unfortunate commonality that much of the process of checking in with employees and ensuring they’ve fulfilled their obligations in disclosing conflicts is performed over email. As the process grinds along, your email inbox can become quite crowded. Keeping track of who has and has yet to respond to your outreach, not to mention keeping others abreast of your progress, requires an almost inhuman level of organization skills.
However, the notifications and reminders COI software provides will take the uncertainty and disorder out of the process. Stay on top of everything, including when disclosures are due, when they require review and updating, when employees fill out and submit their responses and when someone hasn’t met the threshold for compliance. Software can also manage followup with employees who haven’t completed their responsibility of voluntary disclosure.
After you track everyone down and have them submit their responses, the next hurdle is gathering all of this data into a spreadsheet for proper analysis. Evaluating data with the naked eye can be an art and a science as you attempt to identify trends and places where perhaps your COI policy is lacking. You also run the risk of making errors while transcribing responses or accidentally omitting data.
This is where the powerful reporting capabilities of COI software can come into play. Responses will be automatically collated, and you’ll be able to monitor progress from a visual dashboard in real-time. Analysis can occur as broadly or narrowly as your needs call for, and thanks to predetermined scoring thresholds, it will be easy to identify points of potential risk. You also won’t be required to manually transcribe employees’ responses at any point; fewer touches means less opportunity for human error to affect the process.
ComplianceBridge Takes COI Software One Step Further
For over a decade, ComplianceBridge has perfected policy and procedure and risk management. Now, through our powerful managed COI service, we’re addressing a critical weakness in every organization: maintaining timely disclosures of conflicts of interest. We understand how burdensome the process of managing COI can become, and it doesn’t have to be that way. Our ComplianceBridge Managed Conflict of Interest (MCOI) service, run with the assistance of our own risk experts, takes care of the entire process for you. Creation of assessments, collating responses, performing analysis and generating reports are all handled with minimal time and effort from your compliance team.
Assessments can be as simple or complex as needed with question types including multiple choice, fill-in-the-blank, ratings, yes/no and textual responses. Include conditional questions and reference external documents for a more thorough disclosure process. Dissect COI assessments down to individual answers, identify trends and export data for further analysis.
For a low annual subscription, your organization will finally have an effective solution to address potential conflicts of interest at every level. Never forego regular, proactive COI questioning due to time or personnel constraints again. Request a demo with ComplianceBridge today to learn more about how we can manage COI so you don’t have to.