Managing personal conflicts of interest in the workplace is not receiving enough attention.
Do you have a program to manage potential areas of conflict of interest?
Does your company have a policy to counter conflicts of interest? Who is responsible for its oversight?
Areas where potential conflicts of interest could occur
Here are a number of potential areas, but the list is not exhaustive:
- Board appointing a procurement committee to oversee the supply chain management.
- A personal gain accruing to an individual in his/her relationship with the employer, other than employment.
- Romantic relationships in the workplace, particularly between a senior executive and a more junior personnel member.
- All corporate activities where the company could be at financial risk, such as the supply chain department.
- Senior executives enjoying high levels of discretion as to operating decisions they are allowed to make.
- Senior executives who usually travel alone to meet with suppliers.
- Third-party vendors, as well as clients, could benefit from less-than-arms-length deals secured with the company. They should declare any direct or indirect interest in or relationships with company personnel.
- Family and/or romantic relationships involving a person from other companies, particularly competitors
- Financial pressure at home
- Family relationships at the company
- Accepting business freebies
- Several individuals serving together as directors on a number of boards.
How do you minimise these conflicts?
Firstly, Companies should develop and implement a structured program and policy to identify and counter possible areas of conflict of interest. This should include a lifestyle audit to be called entirely at the option of the company. It should be developed and managed by the HR department. Every single employee, including the CEO as well as the non-executive directors on the board, are subject to it.
Secondly, all members of staff and management should be briefed on the policy. They should be encouraged to report any matter of concern via the whistleblower system.
Thirdly, incorporate the policy and program into the company’s risk and compliance framework. Also include it in the incident management processes.