Most organizations understand that they need conflict of interest policies. The systems that are in place for companies that actively manage conflict of interests versus those who merely “have a policy” makes all the difference. A written policy in an employee handbook does not mean much if there is not a system for collecting, tracking and addressing those disclosures when the time comes.
Conflict of interest management is far too complex to be adequately tracked using simple systems. Companies are facing more employees, more vendor relationships, more boards, and more regulations than ever before. Each of these elements is a source of potential conflict, and attempting to manage that through emails and spreadsheets just leaves companies vulnerable to situations that can quickly develop into crises.
Creating More Work – And Risk
The challenge is that when companies employ rudimentary systems for tracking disclosures, they are not only creating extra work for themselves, but extra risk. Someone has to disclose a potential conflict of interest, which means filling out a form and sending it via email to their manager. Their manager forwards it to HR. HR logs it in a spreadsheet. Three months later, someone has to come back and find that disclosure in order to make a decision.
In situations like these, people have to skim through old emails hoping that nothing has been deleted. These fragmented operations mean disclosures can go missing, questions might never be answered, and there is no idea of what each person on the team disclosed. When this happens annually, it becomes almost insurmountable when company personnel can’t even remember who disclosed and who never got around to it. Companies spend so much time tracking their team down to log disclosures that they forget the potential conflicts they are trying to investigate.
How Companies Benefit from Actual Systems
Moving towards coi disclosure management software has revolutionized how companies view this task. These systems create workflows for the company and its team members that automatically ensure disclosures make it to the right reviewers instead of relying on teams’ memories and good favors.
It’s not just the digital forms that replace piles of paper. These systems ensure companies have trails showing who submitted what information, when they did so, and what the company did with that information after the fact. When regulators come to investigate the company, they have all the proof they need as opposed to scattered bits of information.
The notification functionalities in these systems make an incredible difference. These systems can automatically notify employees when it is time to do their annual disclosures. It can alert reviewers about new disclosures awaiting their review. If there is an issue with a disclosed relationship affecting a currently active relationship with the company, these systems can catch it before it becomes a big problem.
Data That Spreadsheets Don’t Account For
Most people do not realize how many insights are hidden in the conflict of interest disclosures. It is easy to miss seeing potential patterns when the data is stored in spreadsheets. Companies cannot identify which departments log the most disclosures, which vendors are proving to be a problem time and again and which situation they have to mitigate more regularly than any other situation.
Companies can identify these patterns using an actual conflict of interest disclosure management system. Compliance teams can run reports and see the names of the departments that log the most disclosures on certain vendors. Companies can even use this information for valuable training insights to inform which departments could use a refresher course on the policies the company has set forth.
These reporting functions can also prove valuable for regulators auditing the organization. Instead of passing paperwork to regulators, companies can show regulators the effectiveness of these programs.
Integration Makes Systems Even More Intelligent
The best conflict of interest systems to use are not standalone systems. When companies integrate their systems, it only makes them that much more valuable. Companies can use their conflict of interest systems alongside other compliance programs, HR systems and vendor management systems. It is even more intelligent when systems are integrated.
Integrated systems can cross-reference the disclosures company employees submit with the contracts of the vendors the company uses most regularly. These systems can quickly alert the company to people who are engaging in activities that compromise the relationship between the vendor and the company.
There is no duplicate information entry, which is another time-consuming task that these systems eliminate. The systems pull the employees’ names from the HR databases instead of relying on their managers or departments to remember to log this information.
Companies can track who has completed the requisite training modules and who requires additional training. These training logs can even be cross-referenced with situations where the employees are under investigation and require conflict of interest disclosures.
An Infrastructure That Accommodates Change
Simplicity can work for a small company but as that company grows into a giant enterprise, things become exponentially more complex. Companies can effectively manage their conflict of interest situation with 50 employees using fewer formal systems, but it becomes troublesome at 500 people, and near impossible at 5000. Organizations that make use of the right systems do not have to face this painful transition at a later stage.
The same is true when it comes to changing companies and changing regulations. If something in the environment changes, or if the company has changed its internal regulations or policies, companies need to adapt their systems to accommodate these changes. Companies can only scrub through a few documents if something has changed in the company.
Less Busy Work Means Better, More Efficient Compliance Practices
People whose job it is to manage conflict of interests are not going to find themselves out of a job because of technological advancements. Companies will still need policies in place, teams with experience in managing conflicts of interest and people who can analyze complex situations. These systems do, however, eliminate most of the busy work that experts need to contend with, preventing them from addressing matters that truly require their attention.
There are intelligent systems available today that those who manage conflict of interests can use to become more efficient and effective in their roles. Companies can avoid operational chaos by using these systems correctly and those who have to address potential conflicts of interest on an ongoing basis will likely thank their employers in the future for relieving some of their busy work so they can do their jobs even better.
