Conflicts of Interest (COI) are a natural byproduct of doing business in an interconnected and highly regulated world. The question isn’t if a company has conflicts of interest, but whether or not that company can successfully mitigate conflicts as they arise. This is the challenge facing compliance managers and their teams: to develop a program that’s easy to use yet comprehensive enough to resolve conflicts at scale.
Technology can ease much of that burden. But there are actions you can take now to ensure your incident management process has a strong foundation, one that will only continue to scale once you do adopt a software solution.
Start by taking the following six steps in pursuit of company-wide best practices for your conflict of interest program.
Download our white paper on the best practices compliance managers should incorporate into their conflict of interest program.
1 – Clear Conflict of Interest Policies Can Drive Participation
Successful conflict of interest programs start with clear policies that everyone in the company can understand and follow. These policies should make clear what constitutes a conflict of interest, when an employee may have one, as well as how the company will handle perceived conflicts of interest.
Ensure your policies are specific about how your company defines a conflict. In most cases, a conflict arises when the interests of an employee are at odds with the interests of an organization. Since this standard is rather broad, include relevant examples in your conflict of interest policies and procedures so employees can better identify when they’ve encountered a situation worth reporting.
In addition to your company’s definitions, your policies should require all covered employees to disclose their conflicts of interest, then explain the procedures for review. Documenting the entire review process can drive participation by putting employees at ease, since fear of punishment might make them reluctant to report their conflicts of interest. Demystify the entire program by being clear about the policies that govern every step from report to resolution.
2 – Conflict of Interest Forms Should Be Easy to Submit
Every covered employee should submit an annual disclosure form. But they shouldn’t have to jump through hoops to do it. Since conflicts of interest are wide ranging and can be complicated in and of themselves, compliance officers should make the actual act of submitting a COI form as simple as possible.
Technology is the best way to take the burden off of your covered employees. One of the examples we mention in our white paper is smart forms, which use branching logic to adapt form fields every time an employee submits a response. The goal here is to guide the employee through the process so that all they really have to consider is what their conflict of interest may be.
The goal of a conflict of interest program should always be 100% participation. You’re more likely to generate this level of compliance if your employees can easily submit the right information at the right time.
3 – Simplify the Review of Conflict of Interest Forms
Once you achieve a high level of participation, you’ll likely be flooded with submissions. While this is a sign of a culture of compliance at work, sifting through forms might not feel like a success. Compliance offers should seek to not only make the form submission process easy on employees, but make the review process just as simple for compliance teams.
The benefits of a clear and effective review process are twofold. Compliance teams won’t be buried under a pile of submissions, and can instead give submissions the follow through they deserve. This, in turn, will reassure both employees and regulators that this program is functioning as intended.
The best way to simplify the review of disclosures is technology. Machine learning can actually automate the most time intensive steps in the process by sorting and documenting the disclosures that don’t qualify as conflicts of interest and escalating the ones that do. Automated alerts for the submissions that are verifiable conflicts of interest will keep compliance teams on a path to act quickly.
4 – Establish a Formal Review Structure for Conflicts of Interest
Employees, regulators, and even consumers should be able to see that your organization takes conflicts of interest seriously. A formal, transparent review structure is the best way to instill confidence in your conflict of interest program, which, in turn, creates a strong foundation for a culture of compliance. Your review process should be objective, impartial, and consistent for each and every disclosure.
A good formal review structure is as much about the steps involved in that process as it is about who within the organization is accountable for each of those steps. We give several more examples in our white paper, but one role common to all conflict of interest policies is establishing one independent executive to review all submissions.
This may be the compliance officer themselves, but what’s important is that this person is always the go-to for reviewing disclosures and identifying whether they’re actual conflicts before escalating them to the next step.
5 – Automate Mitigation Measures
Mitigation is what actually reduces the possibility of harm due to conflicts of interest. But many compliance officers don’t know that this step can be automated, too. While simply disclosing might be enough to resolve some conflicts, others require a significant, company-wide response; an employee may need to be reassigned, or the company may need to cut ties with a vendor. The enforcement of these steps can be aided by technology.
After the review process determines that a conflict exists and identifies the appropriate mitigation steps, conflict of interest software can assign those next steps to the relevant individuals. Each step must be documented, so if an individual doesn’t complete their step, conflict of interest software can send out automatic reminders until they do.
Automating your mitigation measures will make it easier to find and resolve all conflicts of interest because no part of the process will fall between the cracks. Unlike you or anyone else on the compliance team, conflict of interest software has a singular focus: ensure mitigation actually happens in a timely manner.
6 – Put COI Data to Work
If you implement a technology-driven conflict of interest program, you’ll have countless data about how the program is working. When properly organized, this data can reveal which conflicts are the most common, which mitigation measures are the most time consuming, and so on. Successful compliance programs use that data to think ahead.
Simply put, data analytics will give compliance officers insight into what within their organization needs attention. You’ll be able to pinpoint the best ways to improve policies, procedures, and even internal controls.
The goal of a conflict of interest program should be to drive 100% participation. That’s because it’s not a question of whether or not a business has conflicts of interest, but whether or not that business is effectively finding and mitigating those conflicts. While dedicated compliance teams can put clear and consistent processes in place, resolving conflicts at scale is impossible without technology.
It’s conflict of interest software that can drive participation by simplifying the submission and review process, increase the rate of resolution by automating mitigation measures, and build a better business by pinpointing strategic areas of improvement within the organization. That’s how a company can really reduce risk and improve operations.
Download Best Practices For Successful Conflict of Interest Program to learn more.