How Well Does Disclosure Really Mitigate Conflicts of Interest? (continued)

Earlier posts have questioned the efficacy of disclosure as a mitigant for COIs for several reasons:

Disclosure can “morally license” the conflicted party to act in a COI-based way.

– Individuals impacted by the COI may not fully understand /be aware of what is being disclosed.

– A “reverse conflicts of interest” could occur, meaning that an individual dealing with the conflicted party could over-compensate for it.

To this list a fourth area of concern should be added: “disclosure can place inappropriate pressure on the audience to heed the advice — for example, in order to avoid insinuating that the [disclosing party’s] advice has been corrupted,” as noted in this interview with Daylian Cain of Yale.

It is important to add that Cain (and the colleagues who collaborated in his research on conflicts) “still think that transparency is a good thing and agree that disclosure will surely be part of the solution. So now [they] are more focused on how to improve disclosure because the word is out that it is no panacea.”

But what does it mean to improve COI disclosure?

In the context of COIs in business organizations (the focus of this Blog), the issue is, I think, less a matter of how to improve disclosures themselves than how to improve the way in which disclosed COIs are addressed, with the possibilities including:

– Educating (through C&E training and other communications) those involved as to the generally under-appreciated dangers of COIs.

– Ensuring that decisions about COI waivers and COI management are made by those who are independent and possess relevant expertise (e.g., a C&E officer) – not line managers.

– Having a sufficiently rigorous COI management process.

Finally, the danger identified by Cain of, in effect, of feeling pressured to heed COI-based advice may seem inconsistent with the “reverse COI” concern of overcompensating for COIs.  But I think they are not inconsistent when viewed in their respective relevant contexts. That is, overcompensation is more likely to occur in the setting of a business organization  – with defined and enforced ethical standards regarding COIs, where one might be more concerned about looking bad to one’s colleagues (or bosses) than to the conflicted party.

More to come in future posts.

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