Mechanism to manage conflict of interest
23
blue-section deep-blue
Company should adopt a “three-step mechanism” in managing conflict of interest
- Avoid – All directors and staff should remain alert to and avoid any actual, potential or perceived conflict of interest situation;
- Declare – If the conflict is unavoidable, the director or staff member should report it to the designated approving authority once he becomes aware of the conflict; and
- Mitigate – The designated approving authority, after assessing the impact of the conflict and the risk of impropriety, should take appropriate mitigating measure as early as possible.
fade-up
container
Declaration and mitigation
The mitigating measure to be taken would depend on the circumstances of individual cases and the level of mitigation should commensurate with the severity of the conflict, the interest involved and others' perception
Proper documentation of the declaration, the rationale for the decisions made and the course of mitigating measure taken should be maintained.
Depending on the operational needs and circumstances, companies may require a staff member who participates in projects involving sensitive issues or information to declare whether or not they have any conflict of interest (i.e. positive declaration) on the matter in order to protect the interest of the companies.
Please click here for a sample code of conduct.
