Conflict of Interest Management Software Speeds Up Disclosures

Conflict of Interest Management Software Speeds Up the Disclosure Process

Written by Risk Management Team on July 23, 2021

Everyone has a life outside of work — or at the very least, they should — and that means that everyone has external financial and personal relationships that could become a conflict of interest for them. A conflict of interest (COI) is any situation in which one of these financial or personal relationships compromises, or has the appearance of compromising, a person’s professional judgement. 

Having a conflict of interest is not necessarily unethical, but they do represent a risk to a company or organization when they are not appropriately identified and managed. That is what makes COI disclosure such an important risk mitigation process for all organizations, corporations, and institutions. Unfortunately, COI disclosure is a time-consuming, tedious process, especially when you do it the old-fashioned way with paper forms and filing cabinets. Conflict of interest management software makes this cumbersome task much more manageable and more effective as a risk mitigation tool. 

COI Disclosure

The COI disclosure process is designed to catch potential conflicts of interest employees may have before they become an issue for employers. The rules on who needs to disclose COI differs depending on the nature of your work; you may only have a few key personnel whose potential conflicts pose a risk to your business or mission, or you may require that everyone disclose conflicts of interest. 

The disclosure forms themselves also vary. Some organizations may feel comfortable with relatively simple questionnaires, while others may be more extensive. The most common type of conflict employers ask about is financial COI (FCOI). FCOI constitutes any financial relationship someone has with an external entity. Owning stock in a rival company, donating to an outside organization, or receiving gifts from vendors are all examples of FCOI. Other conflicts can be more personal, though, such as nepotism or self-dealing. It’s at the discretion of an employer what they ask employees to disclose and how much information to provide in an instance of COI. 

The process itself is normally conducted annually and follows these steps. 

  1. Employees fill out a COI disclosure form that includes questions about any relationships in which a conflict could exist. 
  2. After submission, the disclosure form must be reviewed by your Compliance Officer or similar entity. Most disclosures will be “negative disclosures”, meaning that an employee had nothing to disclose or that a disclosure did not constitute a conflict. 
  3. In the instances that an employee does have a qualifying outside interest to disclose, reviewers must consider factors such as the size of a financial transaction, the duration of a professional relationship, and how the public might perceive a situation to determine if it’s a conflict of interest. If reviewers determine an outside relationship is a conflict of interest, then it’s called a “positive disclosure”. 
  4. Positive disclosures must then be effectively managed in some way. Examples of managing a conflict of interest could be requiring an employee to sell off stock in a company, limiting their role and responsibilities in some way, or disclosing the conflict to stakeholders and the public before they find out another way. 

While the disclosure process may seem straightforward, when you start juggling responses on dozens of different questions from hundreds of employees, it becomes anything but. Conflict of interest management software will streamline the process, though. If we review the process with the addition of a software solution, we can see how it improves the experience for all parties involved and leads to more trustworthy results. 

The Benefits of Conflict of Interest Management Software

Eliminating Hard Copy Forms & Recordkeeping

Unlike some other risk management activities, COI disclosure typically occurs once a year. For that reason, many organizations don’t see the point in investing in a software application that could make the jobs of everyone involved easier. That means that administrators and reviewers are left to distribute physical disclosure forms, save submitted forms in filing cabinets, and track results in spreadsheets that must be manually updated. 

A manual system like this is rife with problems: an inability to ensure all employees have submitted forms, difficulty digging through filing cabinets to track down the right paperwork, and even mistakes made when inputting results into spreadsheets. All of these issues ultimately create an unreliable process that fails to uncover all potential conflicts of interest that pose a threat to your business. 

Conflict of interest management software eliminates hard copy disclosure forms, instead allowing you to conduct the entire process digitally. Share questionnaires online in a matter of minutes, easily track who has and hasn’t yet submitted their answers, and utilize a searchable database to find exactly what you’re looking for when you need it. Unlike physical files, software can’t be lost or damaged, and administrators won’t have to handle the input of information as much, which means there will be less opportunity for errors. 

Collecting Responses in One Place

Collecting and reviewing responses may be the most time-intensive part of COI disclosure. While the vast majority of personnel won’t raise any issues, it’s the needles in the haystack you have to look out for. This is made even more difficult with the involvement of multiple processes managed by different departments. 

The best way to ensure you haven’t passed over any responses is to collect them in a central location that all reviewers will have access to. As responses come in, conflict of interest software helps you easily analyze results for specific questions and from specific individuals. You’ll no longer need to worry about making sure a spreadsheet has been manually updated with the most up-to-date information. Instead, you’ll have real-time access to responses at your fingertips. If someone discloses a potential conflict, you can immediately react and investiagte further. 

Easily Assessing Compliance With COI Policies

The purpose of collecting COI disclosures is to ensure that you’re complying with all of the relevant policies you have on the books. These policies help you determine who in your organization is required to disclose, which types of conflicts must be covered, how you should manage positive disclosures, and how much risk you’ll tolerate on the matter of COI. In other words, there’s a lot to cover. Manually evaluating COI compliance with policies quickly becomes a tedious exercise, and often, you’re faced with low data integrity. 

Conflict of interest management software allows you to quantify responses. 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. At a glance, see the percentage of respondents who met compliance thresholds, which questions had the highest positive disclosure rates, and which employees were most likely to have a conflict of interest. 

A Better Way to Manage Conflict of Interest 

As a leader in compliance management software, we understand how burdensome the process of managing COI can become, but 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. You’re also able to include conditional questions and reference external documents for a more thorough disclosure process. After submission, dissect disclosures down to individual answers, identify trends and export data for further analysis.

COI disclosure is one of those risk management activities that only comes around once a year, so it can be hard to justify investing in a conflict of interest management software with all the bells and whistles. With MCOI, you’ll have access to an effective solution and experienced risk experts to help you manage the process for you — all at a low annual subscription. Request a demo with ComplianceBridge today to learn more about MCOI and see it in action.

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