Conflict of interest is one of the most common corruption risks. Therefore, every company should be aware of this potential issue and mitigate it properly. As part of Kimia Farma Group, PT Kimia Farma Trading & Distribution (KFTD) has developed a guideline against conflict of interest for organization members.
Defining Conflict of Interest
Defining conflict of interest is the first step to tackling this issue because it specifies the action. The company defines conflict of interest as when an individual (a commissioner, a director, or an employee) has personal interests related to their position or authority within the organization.
It may hinder them from performing their tasks objectively. It is because there is a conflict between what is best for the organization and their personal finance, group, or family interests. Those who choose their interests over those of the organization will likely conduct illicit activities like corruption.
How Does the Company Manage Conflict of Interest?
KFTD’s good corporate governance and code of conduct contain key points that make it imperative for upper management and employees to disclose potential conflicts of interest. An individual who is found to have a conflict of interest over a project is not allowed to perform their tasks for that specific project.
The company notes two important factors in ensuring the successful management of conflict of interest. The first factor is commitment and management’s example. Upper management should strive to showcase exemplary behavior, such as prioritizing the company’s interests over personal ones.
The second factor is employee participation and engagement. The company publishes guidelines about conflict of interest accessible to every employee. Supervisors are also asked to educate their subordinates about managing conflicts of interest based on the company’s policy.
An employee can report a potential conflict of interest to direct supervisors or anonymously via the whistleblowing system. KFTD also provides other guidelines in its corruption prevention effort, including an anti-bribery management system and a gratuities reporting mechanism.