Conflicts of interest (COIs) are an ever-present priority for compliance departments. And as cross-organizational risks and threats grow, an effective conflict of interest disclosure management program is a key tool compliance professionals have to manage and minimize risk.
The differences between a good COI program and a great one come down to the education, implementation, and optimization of your program. Here’s how to ensure all these elements are working synergistically to support your COI disclosure management program—and boost compliance across the organization.
Education: How conflict of interest disclosure management can help mitigate risk
Awareness is the most effective tool at your fingertips. Make information about your conflict of interest disclosure process accessible, using language employees understand and meeting them where they are. Many conflicts of interest are harmless. However, certain conflicts pose a real business risk and open the door for potential misconduct—whether intentional or not.
Historically, one of the biggest reasons unethical behavior occurs in the workplace is because employees simply don’t know what defines ethical and legal behavior. Many conflicts of interest are harmless. It’s fair to assume employees may need additional education surrounding what might be a conflict of interest.
Here are some examples of COIs that may seem obvious to you, but may not be as obvious to employees:
- An employee accepting a gift from a vendor
- A romantic relationship between a manager and direct report
- An employee consulting for or working with a competitor company
- A manager is an investor in a company they select as a supplier
By identifying these conflicts early on and encouraging transparency in your organization, you can work with employees to mitigate risk and maintain a culture of compliance. The first step is making employees aware of your conflict of interest program. The second is providing high-risk offices or departments with training that covers situational conflicts and the reporting process.
Finally, your culture is also a powerful way to mitigate risks. A speak-up culture—one where employees feel confident and empowered to share concerns and raise issues—can encourage employees to submit and update disclosures. You can begin molding a speak-up culture by communicating frequently, practicing radical transparency, and humanizing your broader compliance program. These elements help build trust across your organization and make employees more willing and excited to participate.
Implementation: How to create a robust conflict of interest policy
At the core of an effective conflict of interest management program is a well-designed COI policy. This policy will ultimately inform and govern employee disclosures, so it’s in the best interests of your organization to come up with one that is easy to understand and relevant to how your company does business. But what does that look like in practice?
- Survey your industry and operations. Look at which departments inherently carry more risk (for example: sales). Think about employees doing business in geographical areas where there may be a greater risk for conflicts—such as countries where gift-giving is customary. Use all this information to inform your policies and define what a conflict of interest looks like at your company.
- Define the parameters. Identify what warrants a conflict of interest disclosure. For example, are employees allowed to accept gifts valued up to a certain monetary amount? Are employees allowed to have outside employment at non-competitive companies, given that it doesn’t interfere with their work? Consider also: at what stage a conflict of interest must be disclosed, how frequently employees must provide updates to their disclosures, and what the potential punishments are for failing to disclose a COI.
- Create cross-organizational policies. Though some departments pose greater risks than others, no one is immune to the risks associated with conflicts of interest. Your policies need to address the entire organization, and you should make sure all employees are aware of how to submit a disclosure. You may also provide third parties, like suppliers and vendors, with a code of conduct that includes COI-specific information.
- Reduce friction throughout the process. Reduce—or better yet, eliminate—friction in your COI disclosure process by making disclosures as easy as possible. Using digitization and automation can help leave employees with fewer questions and concerns as they comply. For questions that do come up, consider appointing a default ethics contact to assist.
Keep in mind that multiple people can be involved in one conflict. Your process needs to be capable of tracking complex and nuanced situations. The right disclosures management platform will centralize the process and enable you to track employee activity and collect a wealth of actionable data.
Optimize: Communicate, benchmark, and iterate conflict of interest disclosure management
Risk management is the primary goal of an effective COI program—but continuous improvement is nearly as important. To ensure your program and policies are working optimally, consider implementing the following safeguards.
- Monitor existing disclosures. Continue to monitor disclosures, especially those that are flagged as high-risk. Over time, an employee’s role or relationship to a COI may change, thereby increasing or decreasing the risk it poses. Staying on top of changes can ensure your program maintains an accurate view of risk across the organization.
- Track metrics via ongoing reporting. Collect program data, and then analyze trends over time. For example, are certain departments increasing their amount of COI disclosures? Is there a certain type of COI that’s becoming more frequent? These types of information can help you understand your risk profile as it changes and enable you to stay on top of potential issues.
- Perform an annual review. Capturing an annual program snapshot is a great way to identify if your program is effective and whether it’s gotten stronger (or weaker) since the previous review. Use data you’ve collected year-round to benchmark the program and set new goals for the following year.
- Communicate updates and source employee feedback. Create an open dialogue with your employees, especially those who have COIs or work in departments with greater COI risk. Communicate updates and policy changes in real-time, and listen to employees’ questions, comments, and concerns to ensure they feel heard.
Remember: a best-in-class disclosures program goes beyond the program itself. Boosting a program’s efficiency and effectiveness requires employee awareness and education, an easy-to-understand policy, and continuous performance tracking.
OneTrust’s Disclosures Manager streamlines the Conflicts of interest disclosure management process for both administrators and employees. Reducing friction at every stage makes it easier to manage and minimize risks. If you need to streamline disclosure workflows, improve data collection, and boost your program efficiency, we can help. Contact OneTrust for a Disclosures demo today.