Some areas of compliance programs are more clear-cut than others. While it might be relatively straightforward to run an internal compliance investigation based on tangible evidence, other areas of compliance, such as conflicts of interest (COI), can be notably tricky to manage for compliance teams. The key to COI success? Understanding your conflicts of interest analytics.
A conflict of interest occurs when an employee's personal interest could interfere with or influence their conduct in the workplace. Managing conflicts of interest effectively involves much more than defining the right policy and integrating COI management into your broader risk assessment strategy. It ultimately involves effectively using the right conflicts of interest data and analytics. Assessing key metrics, especially with technology's help, can help you reveal patterns and manage risks before they escalate.
While most organizations are leveraging stop-gap technology like spreadsheets or email to manage COI, given the novelty of COI management technology, most companies are still not using tools specifically built for the effective management of conflicts. The lack of appropriate COI tools not only underlines the ineffectiveness of COI management, but it also limits an organization’s ability to access insightful conflicts of interest analytics.
Therefore, before talking analytics, it is crucial to think about where your current conflicts of interest data are being stored. For example, if you have one or two individuals on your compliance team managing conflicts, it is important to ensure that the data lies somewhere where it is easily accessible and auditable for the rest of the team, rather than in folders, hard drives, or emails.
Now, let's review. Which conflicts of interest analytics should you be looking at to drive maximum effectiveness across your compliance program?
Approval Process Insights
Number of Conflicts of Interests Submitted Over Time
Having a timeline of the number of conflicts submitted can provide useful insights into how well organizational changes related to COI-processes are received. If your COI program is new and you have recently started leveraging COI technology, having access to the aggregate number of submissions over time can help you conduct year-over-year comparisons and determine the responsiveness of employees to your COI policy.
Average COI Review Time
Scrutinizing the average time it takes to resolve COIs can help you uncover bottlenecks and quickly resolve these to get your process back on track. For example, considering that organizations manage conflicts of interests differently and involve various parties in the resolution process of a conflict, a long resolution time might indicate that compliance officers are either not involving the right stakeholders in the resolution process or that the process is unnecessarily complex. Understanding your average COI review time can help your team understand potential pitfalls and strike a proper balance between informing the right individuals and streamlining the process.
Identifying Conflict Underpinnings
Submitted Declarations Breakdown
Business relationships can vary vastly across an organization, so looking at the conflicts submitted by departments or employees is critical. While some units and managers might have more interactions with potential partners or competitors, others might have less frequent and more low-risk interactions. Noting departmental differences is fundamental when designing a COI process that employees will not perceive as overly burdensome. Understanding which departments and individuals might need more attention can help you automate low-risk interactions while devoting resources to departments that might need additional training, among other initiatives.
Submitted Declarations by Location
Similar to departmental differences, geographical variances are also an important element to track. Not only is it fundamental to keep in mind regulatory nuances when designing your COI compliance program, but it is also important to keep cultural differences in the back of your mind. Different cultures might have different definitions or perceptions of 'conflicts,' which might affect your COI policy's effectiveness across your global offices. Higher COI declarations in a geography compared to others might not only highlight the importance of having a strong COI policy to define your company's level of tolerance, but it might also mean that your compliance program should allocate more training resources in a particular office. Therefore, having analytics on the differences between the type and frequency of conflict declarations depending on geographies is relevant in terms of resource allocation.
Total Number of Declarations with Mitigation
Mapping out your organization's conflicts of interest is the first step in ensuring proper COI management, but having data on mitigation tasks taken after a high-risk COI declaration is even more critical. Having data on this trail of action is not only valuable for your team but can be an important asset for external reporting, especially if a regulator ever wants to access that information. Understanding the total number of declarations that needed mitigation and what percentage of all declarations resulted in mitigation actions provides you with essential information about your process that can help you determine the appropriate questions to ask when building a future COI disclosure framework.
Analyzing Conflict Types
Aggregate Number of Conflicts Based on Type
Types of conflicts of interest analytics you should track are actual, apparent, and potential conflicts. Actual conflicts refer to ongoing conflicts, perceived conflicts are risks that could exist but are not directly tied to the employee, and potential conflicts of interest inform about possible future risks. Looking at the aggregate number of conflicts broken down by type can help you dedicate the right amount of resources and effort to every COI risk.
Juxtaposed Annual vs. Ad Hoc Declarations
While it is recommended to review conflicts on an ongoing basis, most companies automatically send COI questionnaires annually. Looking at ad hoc declaration submissions vs. ones submitted during your annual review could help you identify patterns in how particular high-risk relationships develop at your organization. Are employees reporting conflicts ad hoc and giving the compliance team the possibility of investigating a potential conflict, or are they doing it retrospectively? Considering that ad hoc declarations can help compliance teams mitigate risks on an ongoing basis and prevent the escalation of a conflict, a high number of annual submissions, compared to ad hoc ones, might indicate a lack of awareness of different submission types or your COI policy in general. These insights could prompt you to take steps towards more comprehensive risk mitigation.
Reporting on Conflicts of Interest Analytics
Most companies are not yet leveraging tailored compliance tools for conflicts of interest management, which limits their access to centralized data – a crucial element of organizational risk management. Gathering the right information, and having an understanding of KPIs is not an easy task. To tackle this challenge, we developed a state of the art Reporting & Analytics experience that helps you track all critical information, including conflicts of interest analytics, to keep your compliance program on track.
Reporting and analytics on the Integrity Platform allow you to compile relevant analytics such as the number of conflicts based on type, or average COI review time and allows you to drill down to granular data points based on the indicators most relevant to your organization to drive a powerful COI management process.
The Integrity Platform offers configurable reports and dashboards for our Conflicts of Interests, Incident Management, Gifts & Entertainment, Third Party Risk Management, and Risk Management processes to fit enterprise needs. Book a demo to get in touch with one of our compliance experts and learn how we can help you drive data-backed decisions for your conflicts of interest process.
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