An outline for core employee training on conflicts of interest

COI training is not a new topic for the blog. Prior posts have addressed training of board members  on conflicts;   cultural challenges to global COI training efforts  (through guest posts by Lori Tansey Martens); and  various forms of non-training communications addressed to COIs (through guest posts  by Joel Rogers), such as COI quizzes.  We have, as well, considered the implications of certain behavioral  ethics research for compliance training and communications generally  and recently done the same with respect to moral intuitionism.   Moreover, many of the various news stories covered in this blog over the past two years provide – we hope – useful material for some COI training.  However, we have never looked broadly at core COI training for employees, and so do that today.

What should such training entail? One approach would be to:

– Define COIs, perhaps using the fiduciary duty of loyalty (at least for US-based training) to underscore the potential seriousness of COI issues in the employment setting.

– Describe the potential harms that can be caused by COIs – not only in terms of corrupted decision making on the part of the conflicted party but also the potentially even greater harm that can flow from loss of trust by shareholders, employees, customers, suppliers and regulators, as well as the various ways in which COIs can give rise to legal liability for organizations and individuals. (Prior posts about some of these harms are collected here.)

– Explain what both apparent and potential COIs are and why they can be as harmful as actual  conflicts.  (Here are posts on apparent – and, to a lesser extent, potential – COIs.)

– Provide an overview of the organization’s abstain-or-disclose rules. (Here is a prior post on COI review processes.)

– Review need-to-know points about the most common forms of COIs  – conflicting financial/ownership-type interests conflicting employment-type interests; misuse of company resources; conflicts involving family members; and accepting gifts, entertainment, travel and the like (see posts collected here ).

– Depending on one’s industry, possibly explain the difference between individual and organizational COIs.

– If not already covered in other training  provided by the organization, include the mandate of  not  causing conflicts in others  (in effect, corruption-related risks  – although often a  more soft-core form than what is covered by anti-bribery laws) .

Finally COI training can provide a useful opportunity for discussing the important and interesting area of behavioral ethics, and particularly the overarching lesson of that field – we are not as ethical as we think, which underscores the importance of a strong approach to C&E programs generally and enhanced ethical awareness for managers in particular. (For more on this see behavioral ethics posts collected here.)

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