What do you do if conflicts of interest arise in your organization's Risk Management?

Few preventive & detective controls ; 1. Design & implement SOD (segregation of duties) as core principle in decision making process 2. Threshold based approvals / decision making process to cap the exposure 3. Exercise diversity in entire people life cycle (hire to retire) to prevent natural biases which often leads to CoI. 4. Strict & dynamic ongoing g disclosure on changes in roles, relationships, fiduciary aspects to identify potential CoI areas and remediation.

Quando surgem conflitos de interesse na gest?o de riscos da organiza??o, é essencial abordá-los com transparência e imparcialidade. Identificar os conflitos, comunicá-los abertamente e implementar medidas para mitigá-los, como estabelecer políticas claras e procedimentos de tomada de decis?o. Priorizar a integridade e a objetividade na gest?o de riscos é fundamental para garantir a credibilidade do processo.

When conflicts of interest arise in risk management, it is crucial to identify them, openly communicate them, and adopt mitigation measures such as procedure review and appointment of impartial leaders. Education on conflicts of interest, independent reviews, and continuous monitoring are essential to ensure transparency and integrity.

Conflicts of interest can undermine an organization's risk management. To mitigate this, establish a clear conflict of interest policy. Encourage employees to report potential conflicts related to risk management. Set up processes for independent review of conflicts. Communicate the commitment to addressing conflicts. Conduct training programs for conflict identification and management. Maintain documentation of conflicts and mitigation strategies. Enforce consequences for non-compliance. Managing conflicts promotes impartial risk assessments, enhancing risk management. Note that many industries have regulations governing conflicts, making compliance crucial.

To manage conflicts of interest within an organization's risk management, it's crucial to start with clear identification and disclosure. A robust policy outlining conflict of interest and its management is essential. Strategies such as recusal, third-party oversight, and adjusting responsibilities help mitigate potential impacts. Continuous monitoring and fostering an ethical culture support transparency and integrity in decision-making. Regular policy reviews ensure adaptability and relevance to organizational changes and challenges.

When faced with a conflict of interest situation, I suggest analyzing and classifying the conflict as real, potential or non-conflict. Carry out a 360 view analysis to understand the degree of risk, vis-a-vis the impacts, from when the conflict exists, who are those involved, what circumstances it materializes. If applicable, involve other professionals responsible in HR and Legal to seek additional elements. If it is a real conflict, it usually enables faster and more substantial mitigating action, such as relocating people to other areas, not accepting a gift, etc. If the conflict is potential, action is usually taken to monitor the scenario or create a new process, etc. It is essential to have a process to analyze and mitigate risks.

Conflict of interest can affect the independence, autonomy and objectivity of the decision-making agent. In this sense and in a practical way I suggest: - have conflict of interest policies disclosed in line with the company's code of ethics, - KYS and KYE activities (know your employee and your supplier) - processes for processing, receiving and offering gifts, sponsorships, representation expenses, bidding and purchases. - have a manual with examples of DOs and Don’ts in terms of conflict of interest to facilitate communication. - on the board of directors have policies of abstention from voting in the event of conflicts. - enable practices of segregation of functions, levels of authority, double approval, collegial decision-making, etc.

Conflict of interest situations usually would only arise under two key circumstances. Firstly, the absence or lack of a clearly defined, communicated and enforced conflict of interest policy causes situations whereby there are violations observed in organisations. Secondly, any conflict of interest policy mechanism is seen to lack effectiveness due to a weak or poor governance mechanism whereby enforcement accompanied by penalising breach of conflict of interest is not institutionalised in less risk mature organizations.

When dealing with conflicts of interest, one of the first thing to establish are the principles for managing them. There should be onus on individuals to declare any conflict of interest. This links to the transparency that needs to be exhibited by the concerned individuals. Once these are declared, they need to be viewed in relation to the organisation policies to understand any deviation. If there is a deviation or violation, necessary steps need to be taken to correct the position. The declaration from individuals needs to be recorded centrally and should be available for audit purposes.