Conflicts are a fact of life in the business world, but knowing how to manage conflicts of interest when they appear makes a big difference in the impact they can have on your business. When conflicts of interest aren’t addressed properly, they can cause damage to your organization. Read on to learn how to manage conflicts of interest in your workplace.
What Is A Conflict of Interest?
Conflict of interest, or COI, is a common term in the workplace. It refers to any situation where an individual’s personal interests conflict with their professional responsibilities. For example, if you are a researcher and consult with pharmaceutical companies about their drugs, there may be some concern about your objectivity regarding research. When an employee has a conflict of interest, they are more likely to make decisions based on their own self-interest rather than the employer’s best interests.
To help mitigate this, it’s essential to have policies and procedures in place for how to manage conflicts of interest as they arise.
How to Manage Conflicts of Interest
Managing conflicts of interest is vital to a business because it prevents the appearance of corruption (or actual corruption), which can be detrimental to the public’s trust. It is also important because it ensures employees are not put in a position where they have to choose between competing obligations. Figuring out how to manage conflicts of interest can be one of the most challenging lessons to learn in the workplace, but it is also vital to protecting your company. Let’s look at some steps for managing conflicts of interest.
1) Identify Conflicts of Interest
The first step in managing an employee’s conflict of interest is to identify it. Sometimes this will be easy, such as if the project or task the employee has a COI with is a current focus for the company, and this is known by many people within the company. However, at other times identifying conflicts can be difficult.
One way to try and identify conflicts is by requiring disclosure of COI from employees as part of your employment agreement. When employees disclose potential conflicts, you will be able to assess them more easily and address them quickly, if necessary, before they become problems for you or your organization.
2) Understand the Implications
Conflicts of interest are an issue that employers should not take lightly. They can lead to legal problems, lost revenue, wasted time, a loss of trust, and the potential loss of employees if they feel they are being mistreated. That’s why it’s crucial that employers and employees understand what a COI is and how to manage conflicts of interest before they become a problem.
One thing to remember when addressing a conflict of interest is the implications of COIs. Once you’ve found out what the situation is, explain the potential consequences of this conflict in simple terms so that everyone understands exactly how serious this could be for both themselves and your company.
3) Inform the Employee
A critical aspect of managing conflicts of interest is informing employees about them once they’ve been discovered. Employees should be notified when you discover a conflict so they can decide how to manage their involvement. It’s important that you give your employees a warning before taking any disciplinary action against them. These warnings should always involve the nature and extent of the conflict, so the employee can make decisions about how best to proceed.
The following are some guidelines when notifying employees:
- Tell them what you’ve discovered.
- Explain how the conflict may affect the business.
- Explain the importance of avoiding conflicts of interest.
- Offer actionable next steps.
Doing this will help ensure that the conflict is addressed and that your employees don’t feel they’ve been treated unfairly.
4) Separate The Employee From The Conflict
Once a COI has been identified, the next step is to find a way to end the conflict. To begin with, ask the employee to separate themselves from the conflict. This may involve a leave of absence or a change of focus. When you give them a chance to resolve their COI and avoid termination, you may find they can resolve it.
If this is not possible, such as when they are a partner in the company, then you need to restrict their involvement with any conflicts of interest. It’s essential to be transparent about this restriction so the employee doesn’t feel singled out. They should also understand why the restriction is in place, what consequences may come of violating it, and how long the restriction will last.
5) If All Else Fails, Terminate
Terminating an employee for a conflict of interest may be difficult, but avoiding any potential legal issues or violations of company policies is necessary. Suppose you have investigated the situation and determined that the employee cannot comply with your requirements in the future. In that case, you should terminate them so they cannot use their position at the company to further their interests. You should also ensure that all records pertaining to the termination are appropriately documented, including how you tried to remedy the conflict before terminating the employee.
Manage Your Conflicts Of Interest With ComplianceBridge
The process of managing COI is a tedious one, but it’s also an important one. Companies that adhere to good COI practices can avoid fines, legal trouble, and other conflicts that can threaten the company as a whole. For this reason, it’s an activity that no business owner should ignore. With ComplianceBridge’s conflict of interest management software, your disclosure process will practically run itself.
First, get started by creating custom question sets. Available question types include multiple choice, short answer, fill-in-the-blank, yes/no, and ranking. From there, you have the ability to weigh questions based on importance and add conditional follow-up questions that will only be shown to employees based on how they answered previous questions. This allows you to collect more detailed information concerning COI disclosures and improves your reporting. The best part of our COI software is that you won’t ever miss another collection period again. Just schedule the disclosure form to be sent to employees at the frequency of your choice, whether that’s biyearly, annually, biannually, or something more frequent.
To learn more about how ComplianceBridge helps shoulder the weight of conflicts of interest at your company, request a demo today!