Conflict of interest in the connection between employee and an enterprise has not been recorded in labor laws. It also makes it difficult for the enterprise to enforce sanctions with the employee when he/she engages in conflict of interest. To avoid the emergence of these acts, the enterprise shall take the appropriate precautions to prevent apparent conflict of interest in practice. The article following will show you how to avoid conflict of interest in your business.

1. Disclosure relevant interests

Members and shareholders of a business are typically required to disclose their related interests. However, many enterprises now apply this legislation to other management positions at the time of recruitment and updating during the working process. As a result, the enterprise will acquire information on enterprise and projects in which employee holds or participates as member, shareholder, mentor, and supporter… outside the scope of current activity under the Labor Contract. The enterprise also collects and evaluates information about the employee’s relevant folks.

Based on this information, the enterprise shall decide whether to accept or reject employees during the recruitment or job adjustment process or apply another strategy to limit risks and prevent conflict of interest when enterprises identify this risk.

2. Regulation on anti-conflict-of-interest policies in internal document of enterprise.

Employee works depending on their commitment to and compliance with the enterprise’s commitments. As a result, in case the enterprise want to bind an employee’s duty for conflict of interest, or has a basis for recognizing and handling such behavior, the enterprise shall concretize such acts in internal documents.

Depending on each act of conflict of interest, the level of influence and recognition of the labor law, the enterprise shall allocate such conflict-of-interest acts into documents such as internal regulations, agreements against conflict of interest, labor contracts, and labor regulations… to ensure that, when an actual conflict-of-interest event occurs, the enterprise has sufficient grounds to handle employees and ask them to take responsibility. In fact, the enterprise ‘s regulations simply make employee fearful of complying when he/she discovers that the organization has restrictions on activities that fail to comply and that there will be grounds to take responsibility in the case of prescribed conduct.

All conflict-of-interest regulations shall be established in any form that allows the enterprise to apply them in practice and will no longer be regulations that “intimidate” personnel.

3. Periodic propaganda

The following is a weekly or monthly reiteration and updating exercise inside each department or throughout the organization to remind employee about  the company’s anti-conflict of interest policy. When an employee infringes, the enterprise  has the authority to take action to comply with regulations, which may result in legal penalties that employee may face when violating restrictions against the enterprise’s conflict of interest.

All of these issues shall be promoted, updated, and restated on a regular basis for employee, particularly employees working at the enterprise after the anti-conflict of interest policy is released. We believe that frequent propaganda will help to improve worker compliance.

4. Performing periodic inspection and monitoring

The enterprise shall have oversight to ensure that the individual is adhering to the regulations imposed by the enterprise, including conflict-of-interest issues. Monitoring is defined here as checking on workers’ compliance. The enterprise shall decide on the strategy of cross-monitoring or top-down monitoring based on an assessment of the role’s vital enterprise information. The enterprise shall select whether to use cross-monitoring or top-down monitoring, based on an assessment of the roles most likely to have conflict of interest. Periodic inspection and monitoring of enterprise will assist in detecting and rapidly resolving cases of conflict of interest with the enterprise, particularly for management positions holding vital enterprise information which really necessary.

Finally, avoiding conflict of interest in business is critical to ensuring the business’s effective and sustainable development. The steps mentioned above will assist enterprises in creating a great working environment, increasing employee engagement, improving work performance, and achieving their goals. Only when the enterprise’s operational departments work together to achieve common goals, the enterprise shall grow sustainably and compete in today’s more competitive market.

Time of writing: 29/03/2023

The article contains general information that is of  the reference value, in case you want to receive legal opinions related to the issues that you are having trouble with, please contact our lawyer at email: info@cdlaf.vn