How to Get More Conflicts of Interest Disclosures

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Broadcat LogoCourtesy of Broadcat
Ricardo Pellafone (ricardo@thebroadcat.com)

Do you struggle with getting employees to disclose conflicts of interest? Do your employees confuse “having a conflict” with “exploiting a conflict”?

If so, check your training: there’s a very good chance it only addresses half of the problem.

Most likely, it focuses on the “knowledge” part—presenting the analytical framework for identifying a conflict—and then jumps straight to telling employees to disclose their conflicts.

And of course, you need that part.

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But it’s only half the battle.

The other half—the tougher half—is emotional: getting a person to understand that it’s OK to have a conflict, as long as it’s disclosed.

This matters, and here’s why: confusing “having a conflict” with “exploiting a conflict” is not primarily a knowledge problem.

It’s a “but I’m a good person!” problem.

Here’s what I mean: most people assume that a conflict is automatically a Bad Thing that Bad People do—because that’s all they read about in the newspaper. After all, no one writes headlines like “executive’s conflict promptly disclosed, managed appropriately by compliance team.”

Instead, we read headlines about people that hide and exploit their conflicts—and so an ingrained belief that conflicts are Bad Things that Bad People do makes sense.

And of course, no one wants to view themselves as a bad person.

So, here’s how the logic goes: “bad people have conflicts. I’m not a bad person; I’m not going to exploit this situation! I’m sure I can keep my work and personal interests separate in my head. So, therefore, I must not have a conflict, and I have nothing to disclose.”

That’s why conflicts training has to not only explain what a conflict is, but stress that it’s a normal, common thing to have one—and so disclosing a conflict doesn’t mean that you’re saying you’re a bad person, just that you’re involved in stuff outside of work.

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Because that’s the reality, anyway: having a conflict means that you’re involved in the industry and community, and those are good things!  If no one at your company has any conflicts, you need a better HR team.

If you want more disclosures, you need to hammer on this in your training. It’s only when people feel that it’s OK to have a conflict that they’ll be willing to disclose it, and that’s all you really need as a compliance team. As long as you know about it, you can manage it with your normal processes.

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If you need some help here, we released a version of a training module that covers this exact topic to our newsletter subscribers—You can sign up for the newsletter at this link.

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7 COMMENTS

  1. I think this posting is a “keeper”.

    The idea that a person experiencing a conflict of interest does not equate to the person as being a “bad” person is such a simple concept and so key in helping people understand that conflicts of interest are “normally” encountered and do not have a you are a bad person connotation or association.

    When people begin to realize it is “OK” to have a conflict of interest and that this also makes it “OK” to report it so that it can be addressed…now you’ve reached COI Nirvana!

    Many thanks for sharing.

    • Thanks so much, Frank! I really appreciate that.

      It’s beyond the scope of this post, but this same message goes for hotline awareness. It’s great if people think that speaking up is the right thing to do, but it’s even better if they think it’s the normal thing to do.

      • You’re welcome!

        If I may…let me ask you your opinion as it relates to the use of the phrase or term “hotline”. I’ve read more articles than I care to remember by people that also feel that the term hotline has a negative connotation so they suggest “compliance line”, “concern line”, “ethics line”, “corporate call line”, “Have a good day line – OK…that was something I just threw in there – and on and on.

        What are your views, either way on the term “hotline”?

        • Great question. I think it depends on the overall experience.

          If you want to call it a helpline (or another friendly term), you need to have an option for people to use it as a help desk.

          Like, you need an option where they can ask a question (“do we have a policy on X?”) without having to fill out a bunch of data and read a legal disclaimer from your third-party provider.

          It should be email/name (or anonymous option), and a field for the question—that’s it. If you have that utility, then using a softer name makes sense, and I think that can be really helpful to normalize engaging with that process.

          On the other hand, if they have to click through a bunch of pages of forms or read a legal disclaimer before they can even ask a basic question, I’d just stick with “hotline” or “ethics line” or whatever. Softening up the name isn’t going to accomplish anything if the actual experience of reporting communicates the opposite.

  2. Great explanation – and new way of looking at Conflicts of Interest. Love the positive spin/ make it normal tactic. Thumbs up, Ricardo!

  3. My experience with SCCE Conference has been amazing. As an employee of New England College of Business, I have enjoyed sharing our Masters of Science in Ethics and Compliance with attendees. I also enjoy attendee’s positive reaction to our programs along with the level of interest. This conference also helps New England College of Business learn about upcoming trends and needs of people working in the field.

    In my second day of the conference, I am totally impressed with the agenda and the many breaks it gives vendors to share their product with attendees. The staff is amazing and have helped me every step of the way to make sure I set-up for success prior, during and after the conference. I have really enjoyed my time and look forward to many more conference in the future.

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