What counts as a conflict of interest policy?

Conflict of interest policies were in the news last week.   The first story comes from the world of medical schools. As described in a recent issue of Science Codex, “U.S. medical schools have made significant progress to strengthen their management of clinical conflicts of interest (CCOI), but a new study demonstrates that most schools still lag behind national standards. The Institute on Medicine as a Profession …study, which compared changes in schools’ policies in a dozen areas from 2008 to 2011, reveals that institutions are racing from the bottom to the middle, not to the top. In 2011, nearly two-thirds of medical schools still lacked policies to limit ties to industry in at least one area explored, including gifts, meals, drug samples, and payments for travel, consulting, and speaking. Only 16% met national standards in at least half of the areas, and no school met all the standards.”  This finding is unfortunate because –as discussed in an earlier posting – COI policies in medical schools have been shown by research to be effective in actually reducing COIs.

A different type of COI policy story concerned a whistleblower lawsuit brought by a “former senior bank examiner for the Federal Reserve Bank of New York [against] her ex-employer, which claim[ed] she was fired because she refused to change her findings that Goldman Sachs Group Inc. … lacked a firm-wide conflict-of-interest policy.”  As best I can tell from the various pieces about the case, the examiner felt that although the firm had divisional COI policies and a COI section in its code of conduct it was deficient in that it lacked a stand-alone, firm-wide document in policy form addressing COIs of the sort that was evidently common in other investment banks.    Of course, as with any lawsuit, we will learn more here as the case  progresses.  But the initial complaint alone does raise what is for the COI Blog an interesting question: what exactly counts as a COI policy?

The answer here will depend on the context.   For many (indeed most) organizations a code of conduct provision on COIs is policy enough.  Indeed, as can be seen from some of the links in this earlier post, COI provisions of a code can be as detailed as those in a stand-alone policy.

But for large, complex organizations – and particularly those with complex COI issues, as an investment bank likely has and Goldman Sachs clearly has had (see posts here and here) – a stand-alone, firm-wide policy seems like a good idea, as a way of ensuring sufficient attention is devoted to the area and that standards are applied thoroughly and consistently throughout the organization.   And, it is hard to see what the argument against having such a policy would be.

This is not to suggest that I think that there is merit to the whistleblower’s claim or that the firm was deficient in this respect.  Rather, as with most news-related posts on this blog, I’m only using the story of the day to make a more general point about COIs.

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