Conflicts of interest are a daily occurrence in the business world, but knowing how to manage conflicts of interest when they arise can make a big difference in how they affect your business. Failing to properly address conflicts of interest can harm your organization. Read on to learn how to manage conflicts of interest at work.
What is a conflict of interest?
Conflict of interest (COI) is a term often used in the workplace. This refers to situations where an individual’s personal interests conflict with their professional responsibilities. For example, if you are a researcher and consult a pharmaceutical company about a drug, you may have concerns about the objectivity of your research. When an employee has a conflict of interest, the employee is more likely to make decisions based on their own interests rather than the best interests of their employer.
To mitigate this, it is essential to have policies and procedures in place to manage conflicts of interest when they arise.
How to manage conflicts of interest
Managing conflicts of interest is essential for business because it prevents the emergence of corruption (or actual corruption) that can undermine public trust. It is also important that employees are not put in a position to choose between competing obligations. Understanding how to manage conflicts of interest is one of the hardest lessons to learn at work, but it’s also essential to protecting your company. Let’s take a look at some steps for managing conflicts of interest.
1) Identify conflicts of interest
The first step in managing employee conflicts of interest is to identify them. This can be straightforward, such as when the project or task for which the employee has COI is the company’s current focus and this is known to many people within the company. However, identifying conflicts can be difficult.
One way to try to identify conflicts is to require employees to disclose COI as part of their employment contract. When employees disclose potential conflicts, you can assess them more easily and, if necessary, quickly address them before they become a problem for you or your organization.
2) Make sense
Conflicts of interest are an issue that employers should not take lightly. It can lead to legal issues, lost revenue, wasted time, loss of trust and potential loss if employees feel they are being abused. It is therefore important for employers and employees to understand what COI is and how to manage conflicts of interest before they become an issue.
One thing to remember when dealing with conflicts of interest is the impact of COI. Once you get the hang of the situation, explain the potential consequences of this conflict in simple terms so everyone understands exactly how serious this is for both themselves and the company.
3) Inform employees
An important aspect of managing conflicts of interest is informing employees when a conflict of interest is discovered. If conflicts are found, employees should be notified so that they can decide how to manage their involvement. It is important to warn employees before taking disciplinary action against them. These warnings should always include the nature and scope of the conflict. This allows employees to decide how best to proceed.
Below are guidelines for notifying employees.
- Tell them what you discovered.
- Describe how the conflict might affect your business.
- Explain the importance of avoiding conflicts of interest.
- Provides actionable next steps.
Doing this will help resolve conflicts and keep employees from feeling unfairly treated.
4) Find ways to end the conflict
Once COI has been identified, the next step is to find ways to end the conflict. First, ask your employees to stay away from the conflict. This may include a leave of absence or a change of focus. Give them a chance to resolve the COI and avoid termination, and they may find that they can resolve it.
Where this is not possible, such as when they are partners in the company, their involvement in conflicts of interest should be limited. It is imperative that we be transparent about this restriction so that employees do not feel discriminated against. You also need to understand why the limits are in place, what are the possible consequences of violating the limits, and how long the limits will last.
5) If all else fails
Firing an employee for a conflict of interest can be difficult, but you should avoid potential legal issues and violations of company policy. After investigating the situation, you determine that the employee will not be able to meet the requirements in the future. In that case, they should be fired so that they cannot use their position in the company to further their profits. You should also ensure that all records regarding termination are properly documented. This includes how conflicts were attempted to be remedied before the employee was laid off.
