Give it a Shot: Compliance Program Vaccination

Changing attitudes about compliance risk management and how it relates to the vaccine debate

Is managing conflict of interest (COI) risk akin to getting vaccinated?

As a Colorado-based company, my teammates and I are sitting—whether we like it or not—on the front line of this national debate about the necessity, benefits and (in some minds) detriments of vaccinations. Colorado has some of the lowest vaccination rates in the country, which has resulted in illnesses and medical costs. As we’re hearing from more and more companies about the increasing visibility, buy-in and budget for managing COI risk, we can’t help but draw parallels between the two trends. Let me explain.

Similarly to Aaron Carroll’s view in an article that ran in the New York Times last year, we don’t think there really is a “debate” when it comes down to the science of how they work or could potentially harm – the science here being experience in the field and the case studies (for example, the high-profile Morgan Stanley sales contest) we analyze over and over.

An Ounce of Prevention
Compliance, like our health, is a delicate thing, and requires consistent maintenance and oversight. We know all too well that even with a good diet and exercise regimen, your health can take a hit when it’s exposed to outside sources of contamination or infection, and most importantly, when you least expect it (public restrooms, anyone?). That exposure might escalate into a full-blown health issue—it might not. But by getting appropriate and timely vaccinations, we’re doing our best to fortify our immune systems against those environmental factors we have less control over. And even though some vaccinations don’t render you immune, they still significantly minimize the severity of the disease.

The parallels to COI and vaccines go further when you compare the benefits of a well-designed COI disclosure management program to those of getting vaccinated:

  • Prevention: COI isn’t just a risk and threat to organizations in its own right: it creates and exacerbates all other types of risk, some of them posing a severe threat to companies. IP leakage, insider trading and corruption are all types of issues that can be brought on by undetected or poorly managed conflicts. In this right, COI is akin to a corporate bacterial disease: you can try to treat the symptoms as they crop up, or you can take preventative measures against the disease itself.
  • Cost Savings: There are direct and indirect cost considerations that should come into play when weighing the costs of managing the COI disease. Direct costs are the sum total of the hard costs associated with the fallout from COIs. Think of the legal, consulting and remediation costs as your medical bills. Then consider the broader—and, likely, more expensive—indirect costs. When you get sick, that’s your time away from work and the added non-medical expenses you incur. For COI, these losses come in the form of hits to employee morale, productivity and retention; loss of partner, investor as well as other stakeholders, and customer confidence; resulting in a weakened competitive disposition (i.e. your company’s immune system).
  • ROI: It might seem like another line item to add to compliance budgets that are already bootstrapped (or medical bills that are already skyrocketing). But this is where that whole “ounce of prevention” phrase comes into play. Because for every dollar you invest to address issues where they begin, you save a multiplier of that down the road.
  • Avoiding Casualties: The potential costs of breakdowns brought on by unmanaged COI aren’t insignificant. We already walked through the costs, but what about the positive impacts? You’ll ensure that your employees, customers and business partners are getting a fair shake. And you’ll protect your stakeholder communities of investors and consumers as a result.

Leaving COIs unmanaged, like remaining unvaccinated, incurs costs that are, frankly, unnecessary in this day and age. Because not managing conflicts head-on flies in the face of research and evidence showing an irrefutable cause and effect relationship between conflicts and the risks they drive. And there have been advancements in technology (like medicine) and increased awareness of the risks and consequences that make tackling this important issue easier than ever.

Still not convinced? Join us for our upcoming webinar on this topic featuring experts from Forrester Research and USAA.

WEBINAR: Don’t Let the Tail Wag the Dog
How to Manage Conflicts of Interest and Mitigate Compliance Risk
March 30, 2016 at 1 p.m. EST

This interactive session will help you get to the bottom of each issue and features experts from Forrester Research, Convercent and USAA to present:

– Types of Conflicts of Interest and the risks they create
– What a well-designed COI management program looks like
– How to elicit, review, clear, monitor and manage disclosures of COIs
– Building the case (and budget) for COI management
– Reporting on results to proactively mitigate misconduct

REGISTER HERE