Today’s companies have to be more accountable than ever in their disclosure process, which includes managing conflicts of interest between the company and its employees, as well as its shareholders and board members. Conflicts of interest are inherent in many industries, but these conflicts can lead to potential legal issues if not properly disclosed and monitored. As a solution, companies are turning to conflicts of interest software to help them better manage the disclosure process by creating transparent information sharing throughout the company and by making it easier to understand their compliance risks.
This article discusses why conflicts of interest software can help improve the disclosure process for both compliance officers and employees, as well as why it’s essential to start using it today.
Conflicts of Interest
A conflict of interest exists when someone has a duty to more than one person or organization but cannot fulfill that duty without some type of compromise. For example, a corporate board member may be unable to vote on a particular issue because they have a financial stake in the outcome. Financial interests are not the only type of conflict of interest; personal relationships, loyalty to friends or family, and ideological beliefs can also create conflicts. In order to maintain trust with those outside of the company, it is vital for companies to disclose any potential conflicts of interest.
These conflicts can be harmful to businesses because they can lead to decisions that are not in the company’s best interest but instead in the best interest of the individual or organization with the conflict of interest. The disclosure process is designed to identify and manage conflicts of interest.
The Disclosure Process
Typically the process begins with a request for information from an employee. The employee will then fill out and submit a disclosure form asking them to identify any current or potential conflicts of interest. Following the submission of the form, an assessment from a compliance officer will take place, and they will determine whether or not a conflict truly exists. If a conflict is found, the employee may be asked to take measures to mitigate the conflict, such as selling investments or recusing themselves from certain activities.
While disclosing conflicts of interest is vital for maintaining the trustworthiness of an organization, it rarely receives proper attention. Employees are generally only required to disclose conflicts of interest annually. In this type of situation, a conflict of interest may emerge between disclosures and go unaddressed, putting a company at risk of potentially damaging legal repercussions and damaging its reputation. Another issue with its annual nature is that companies are often reluctant to invest in updating their processes. This means many organizations are still using paper forms, old spreadsheets, and filing cabinets, making keeping track of all potential risks incredibly challenging. However, by investing in software that helps to manage these conflict disclosures, businesses can improve their processes and protect themselves from potential legal trouble.
What is Conflicts of Interest Software?
Conflicts of interest software is a type of compliance software that helps organizations understand and avoid conflicts of interest. Typically, conflicts of interest software includes features for identifying and tracking conflicts, such as automated disclosure questionnaires, response tracking, automated reminders, and more. By using software to track disclosures, organizations can get a better sense of where potential conflicts may exist. With improved transparency around conflicts of interest, organizations can reduce the risk of legal and reputational damage.
How Does It Improve The Disclosure Process?
Utilizing conflict of interest software in your disclosure process is a quick way to make it more efficient and less time-consuming.
Here are a few ways that it can help:
Keeping track of conflict of interest disclosures can be difficult regardless of how many employees you have. This is especially true if you are still relying on paper disclosure forms. Paper disclosure forms are often ineffective because they are easily lost or misplaced. Additionally, paper forms can be time-consuming to fill out and submit. Employees may take shortcuts when filling them out, making it difficult for compliance officers to ensure that they have all the necessary information.
With conflict of interest software, there are no more hard copies of forms to keep track of, no more emailing PDFs that have to be downloaded, completed, and then re-uploaded. Instead, employees fill out a questionnaire they submit—after submission, these responses are automatically stored in a database that compliance officers can access. This means that no forms are floating around, being lost, or being forgotten. This relieves compliance officers of extra time and effort spent tracking down forms and reminding employees to fill them out.
Efficient Response Tracking
One of the many benefits of conflict of interest software is being able to track all responses and immediately flag those requiring follow-up. In a traditional disclosure process, after employees have turned in their forms, all of these responses must be documented and analyzed before any follow-up can happen. This means wasted time transcribing answers, manually identifying positive disclosures, and potential for human error—conflicts slipping through the cracks. With COI software, all responses are tracked immediately so that you can spend less time monitoring and more time acting on those results.
Centralized Records Storage
In a manual disclosure process, it’s up to compliance officers to keep track of and store all records. If it’s a spreadsheet, who owns and has access to it? Is it kept up to date? If you have paper forms, how and where do you store them? Who has access to them? With conflict of interest software, all of your records are centrally stored in an accessible place – no parsing through filing cabinets or hunting down an excel file. Instead, records can be stored for many years, allowing you to reference old disclosures when necessary.
ComplianceBridge Makes The Disclosure Process Simple
At ComplianceBridge, we know that managing conflict of interest disclosures can be a time-consuming process, especially when you’re doing it all the old fashioned way. That’s why we’re here: to help simplify the disclosure process. With ComplianceBridge’s Conflict of Interest (MCOI) solution, you can put the time-consuming process of manually coordinating COI behind you.
For a low annual subscription, you’ll be able to create assessments, collate responses, analyze answers, and generate reports. You can even schedule collection periods to recur at a regular interval, helping ensure you never forgo regular proactive COI questioning due to time or personnel constraints.
Request a demo with ComplianceBridge today to learn more about how we can simplify the disclosure process for you and your compliance team.
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