FCG’s leading experts share some key takeaways on how to work with conflicts of interest in your organization today:
It’s good for your brand and in line with UN’s sustainable development goals! Did you know that working actively to avoid adverse effects of conflicts of interest will help your organization to work in line with the UN’s sustainable development goal #16? Help your employees and board members to do right when it comes to conflicts of interest and your brand, reputation and sales as well as society will for sure benefit from it!
Culture is everything! Every organization has its conflicts of interest, so don’t try to hide or deny it. Company culture is everything, and it’s crucial that your employees and board members are empowered to freely discuss conflicts of interest.
The FSA loves to sanction bad management of conflicts of interest! The FSA has issued numerous sanctions related to bad management of conflicts of interest in the last 10 years*.
Use all means at hand to prevent conflicts of interest! The tendency in legislation implies stricter requirements on regulated companies who must use all means available to prevent conflicts of interest.
Identify and describe! Put effort into documenting descriptions of the potential and factual conflicts of interest in your organization in your conflicts of interest register. It is equally important to describe how you intend to manage your conflicts of interest to prevent adverse effects.
Name managers and board members! Don’t forget to include the names of the board members and management who are involved in conflicts of interest in your conflicts of interest register, if the conflict refers to the individual itself. Remember that only stating the position of the party involved might not be enough.
Follow-up regularly and especially amid changes like the Covid-19 pandemic! Invest enough time to maintain a proper management of your conflicts of interest. Follow-up your identified conflicts in the event of significant operational changes or at least annually with the right stakeholders present. When circumstances change, areas of conflict will need to be re-examined. For example, variable remuneration may be severely impacted by Covid-19 disruptions, and financial institutions should therefore consider adjusting sales targets and other KPIs. This to minimize any risk that employees feel the need to resort to non-compliant behavior to meet pre-Covid 19 performance targets.
FCG can help you facilitate conflicts of interest workshops and training, produce and review policies and much more! Feel free to contact us for a consultation.
*Swedish FSA Sanctions related to conflicts of interest: Sörmlands Sparbank FI Dnr 16-13661, Solidar Fonder AB FI Dnr 16-3001, Falck Försäkringsaktiebolag FI Dnr 15-6082, Skandiabanken AB FI Dnr 13-1074, Case Asset Management AB FI Dnr 11-6645, Mangold Fondkommission AB FI Dnr 11-5811, Folksam LO Fond AB FI Dnr 10-7704.