You Collect Conflict of Interest Disclosures – Then What?

by NAVEX Global
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It has become industry best practice to collect conflict of interest disclosures. Usually, organizational codes of conduct require all employees to disclose any potential conflicts of interest (COIs) they may have with their employer. Often, in addition, organizations ask management (at a minimum) to annually disclose in writing any actual or potential COIs. This is all well and good. But what happens next behind the compliance office curtain? How is the information compiled and processed? Is it made accessible and easily searchable in real time? And who can access the information?

For a moment, let’s imagine the ideal situation. Compliance collects the disclosures into a file system within a database. Hopefully these are electronic forms to avoid a data entry headache. Maybe they are simply filed on a SharePoint site by date, perhaps by name of the disclosing employee or by name of the other party creating the conflict (i.e. giver of refused gift, relative of an executive hired by the company, community board on which a manager is a director, etc.). Or maybe, with electronic disclosure forms, they are collected into a directly searchable database. This data is accessible only by select staff in compliance, legal and perhaps HR. This is the best case. Let’s not even mention the worst case scenario where disclosures are paper forms that need to be scanned or transcribed into a database.

Next, think about the real purpose of collecting this data and how it can be used in real time. The goal is prevention. You want to know about people or entities that could pose future COIs to your organization. But how can compliance staff filter every relationship and business partner through your current COI data filing system on a real time basis?

What if management, procurement and others who enter into these relationships could access the COI database, in a way that protected any confidential information, to check for potential COIs themselves?  And what if all searches were flagged for review by compliance as an audit tool? For example, what if your procurement folks could log onto the database as a restricted user (masking, for instance, the employee disclosing the conflict)? Procurement could run a quick search on the database for all new vendor companies and their owners. And compliance would know about the results.

But most organizations already have too many separate databases. What if COI collection, maintenance, searchability and reporting were just one partition of a larger document management database? It can be. State of the art policy management software systems are capable of delivering on this wish list, for COI disclosures and more – legal documents, proposals, continuing education unit tracking and of course policies, etc. – really any document collection that is critical to your organization.

Technology can be a big help if your goal in data collection is to make it accessible and usable in real time. Software is certainly revolutionizing many aspects of the ethics and compliance function.
It seems we are only beginning to find new and creative ways to harness these new tools to prevent, detect and correct misconduct. 

- See more at: http://www.navexglobal.com/blog/2014/02/20/you-collect-conflict-interest-disclosures-%E2%80%93-then-what#sthash.gw9VRyP1.dpuf

It has become industry best practice to collect conflict of interest disclosures. Usually, organizational codes of conduct require all employees to disclose any potential conflicts of interest (COIs) they may have with their employer. Often, in addition, organizations ask management (at a minimum) to annually disclose in writing any actual or potential COIs. This is all well and good. But what happens next behind the compliance office curtain? How is the information compiled and processed? Is it made accessible and easily searchable in real time? And who can access the information?

For a moment, let’s imagine the ideal situation. Compliance collects the disclosures into a file system within a database. Hopefully these are electronic forms to avoid a data entry headache. Maybe they are simply filed on a SharePoint site by date, perhaps by name of the disclosing employee or by name of the other party creating the conflict (i.e. giver of refused gift, relative of an executive hired by the company, community board on which a manager is a director, etc.). Or maybe, with electronic disclosure forms, they are collected into a directly searchable database. This data is accessible only by select staff in compliance, legal and perhaps HR. This is the best case. Let’s not even mention the worst case scenario where disclosures are paper forms that need to be scanned or transcribed into a database.

Next, think about the real purpose of collecting this data and how it can be used in real time. The goal is prevention. You want to know about people or entities that could pose future COIs to your organization. But how can compliance staff filter every relationship and business partner through your current COI data filing system on a real time basis?

What if management, procurement and others who enter into these relationships could access the COI database, in a way that protected any confidential information, to check for potential COIs themselves?  And what if all searches were flagged for review by compliance as an audit tool? For example, what if your procurement folks could log onto the database as a restricted user (masking, for instance, the employee disclosing the conflict)? Procurement could run a quick search on the database for all new vendor companies and their owners. And compliance would know about the results.

But most organizations already have too many separate databases. What if COI collection, maintenance, searchability and reporting were just one partition of a larger document management database? It can be. State of the art policy management software systems are capable of delivering on this wish list, for COI disclosures and more – legal documents, proposals, continuing education unit tracking and of course policies, etc. – really any document collection that is critical to your organization.

Technology can be a big help if your goal in data collection is to make it accessible and usable in real time. Software is certainly revolutionizing many aspects of the ethics and compliance function.
It seems we are only beginning to find new and creative ways to harness these new tools to prevent, detect and correct misconduct. 

 

 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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