Question

Draft a conflict of interest policy for a profit-oriented company and the provision should cover the board and management.

Answer 1

The conflict of interest policy is designed to help different parties like directors, employees and management of a company to identify situation that will have a conflict of interest and to provide the organization with a procedure that, if observed, will allow a transaction to be valid and binding to all other officers, or director or any other person who has conflict of interest with respect to a transaction. A conflict of interest arise between the organization and any member of the organization or any other party outside the organization.

Purpose:-

Conflict of interest is relevant both for institutional and individual level. All employees are required to perform in the best possible manner manner with full integrity and honesty. In order to get this result it is necessary to have proper control and the governance over the interested parties.

Definition :-

It is a situation where a party potentially inappropriately influence a decision or activity.

Identifying Conflict of interest:-

Identifying and defining conflict of interest is of keen importance for an entity. A conflict of interest arise can arise in the context of any service, roles, customers etc.

Managing conflict of interest:-

All potential or actual interest must be appropriately measured so that the chances of conflicts can be mitigated and different measures can be taken to minimize the possibility of conflicts.

Documentation:-

Documentation of conflicts of interest shall include a statement that has potential customer impact. The record of all these documents shall include information regarding disclosure to customers .

Reporting:-

All the above stated documents should be disclosed or reported to the managers responsible for all the areas the conflict of interest has an impact on.