Transparency and integrity are crucial elements of any successful business. Companies that operate with these qualities build trust with their customers, employees, and stakeholders. One area where transparency and integrity are vitally important is in managing conflict of interest disclosure. Conflicts of interest can arise in any business setting and threaten a company’s reputation and bottom line if not managed effectively.
To maintain transparency and integrity in their operations, companies must have a robust conflict of interest disclosure process. While it wouldn’t be possible for a company to entirely prevent its employees from having a conflict of interest, it is essential to ensure that when a potential conflict does arise, it is handled responsibly.
So how can a company navigate conflict of interest disclosure in a way that reassures stakeholders and protects yourself from liability? In this article, we will explore why having a clear and competent system in place for dealing with conflict of interest is essential in the business world. Let’s take a look at best practices for identifying, disclosing, and managing conflicts of interest.
Establish Clear Guidelines for Identifying and Reporting Conflicts
While many employees understand that they have a duty to disclose any conflicts of interest, they may not know how to go about that process, or even what constitutes a conflict of interest. If an employee doesn’t know they have a potential conflict, how is a company supposed to know? Many companies often ask applicants to disclose any potential conflicts during the hiring process, but it’s not uncommon for organizations to forget to follow up on a regular basis.
In order to have the most current information on hand, it’s important to ensure that conflict of interest disclosure occurs at regular intervals. Additionally, standardizing the process of disclosure ensures that all employees understand what is expected of them. Another crucial step to promoting a culture of integrity and transparency within a company is to signal to employees that addressing conflicts of interest disclosure is a priority. By creating an environment that makes employees feel comfortable enough to come forward when they have a potential conflict, a company can prevent smaller, more manageable conflicts from developing into larger problems.
Create a Process for Evaluating and Addressing Conflicts
Once a company knows about a perceived or actual conflict of interest, what systems are in place to address them? This is where a lot of companies find themselves unprepared to deal with conflict of interest disclosure. Making sure there are formal, structured policies in place will clarify what is and what isn’t considered a conflict of interest. Having to decide on the fly whether a situation constitutes a conflict or not is less than ideal.
An established protocol ensures the company treats every case objectively and minimizes the chance of a situation being mishandled. An ideal code of conduct regarding COI policy should accomplish the following:
- Provide an explanation of an employee’s duty to disclose
- Clearly define how the company will investigate a COI
- Establish how the company will reach out to and communicate with an employee who has a conflict
- Determine what actions will be taken to mitigate the impact of a COI (ex: removal from certain projects, reporting directly to different supervisors, termination, etc.)
- Establish the disciplinary consequences of failing to disclose or resolve a COI
In each case, it’s recommended to consult a lawyer who will be able to provide specific guidance.
Providing Regular Training on Identifying and Disclosing Conflicts of Interest
In order to really snuff out employee conflicts within an organization, there needs to be a firm understanding of what conflicts of interests are and how they should be handled. It is vital that COI training should occur on a regular basis. It is most helpful to schedule this training prior to conflict of interest disclosure so the information is fresh and accessible when the need arises.
The training should cover common workplace conflict of interest situations and the circumstances in which they arise. For example, if someone in the company has shared confidential information with unauthorized personnel, employees at all levels should be aware of the necessary actions required to amend the situation. Employees should also be prepped on how to recognize personal, financial, or family-related interests and how to avoid both perceived and actual conflicts of interest. Conflict of interest disclosure training should also cover the unique consequences of conflicts both individually and on the business as a whole.
No potential dilemma regarding conflict of interest disclosure be overlooked. For example, companies may understate the importance of employee competency in navigating potentially awkward scenarios like accepting gifts from clients. Companies should also take care to reiterate the finer points of non-disclosure and non-compete agreements that employees were asked to sign.
ComplianceBridge is Your COI Roadmap
For a process that usually only occurs annually, conflict of interest disclosure can easily overwhelm you and your team, especially when done manually. Fortunately, there are tools available to help streamline and automate your efforts, such as ComplianceBridge COI software.
ComplianceBridge takes care of the heavy lifting by allowing companies to create custom question sets that suit the business’s unique needs. The software supports a wide variety of question types, including short answer, multiple choice, yes/no or true/false, fill in the blank, and ranking. Employers can also add conditional questions, which only appear depending on how a previous question was answered, and weighted questions to give certain answers more importance during scoring.
ComplianceBridge makes it simple to schedule collection periods, so they can be made to recur at regular intervals. And, results can be seen in real-time, either by looking at how an individual employee answered all questions or how all employees answered an individual question. This feature makes it easy to identify trends and spot areas that may need more focused attention. Companies are also able to generate reports and export them for further analysis in other applications or for presentations.
ComplianceBridge’s COI management software is a powerful tool for helping companies manage the spectrum of conflicts of interest disclosure. By providing a centralized location for employees to disclose potential conflicts, and automating the process of evaluating and addressing conflicts, our easy-to-use software can help companies maintain transparency and integrity in their operations. To see it in action, request a demo with ComplianceBridge today!