Policy, Program and Procedures

First, I would seek to identify the cause of the conflict of interest (COI). This would dictate my approach to obtaining Due Diligence documentation.

Does the COI stem from a conflict based on company's mission, company's financial interests, or based on a company's public stance on a particular matter? For example, does the outsourcing company work to promote a particular cause, such as ESG matters? If so, in an RFP before entering a contract (pre-contract), it would be strategic to ask about those matters of all prospective companies in the bidding process. This would enable a company to make a selection based on shared values.

Post-contract it is essential to review documented evidence of the governance of a specific issue.  In the Due Diligence stage of the TPRM Lifecycle, the outsourcing company could ask its vendor to submit its policies and procedures, workflows, screenshots, etc. to ensure that the vendor was complying with the mutually agreed upon values, obligations, and mission.

Large financial stakes (interests) in either the outsourcer and a vendor, outsourcer and prospective vendor, or a company's prospective vendor and a company's incumbent vendor that has the potential to carry many implications which can escalate quickly if not considered thoroughly.  I envision many COI scenarios concerning financial interests (shareholders) and, potentially, lawsuits. A consultation with inhouse Legal or outside counsel would be best to discuss and strategize. Financials are a Due Diligence staple which would reveal the Executive Board composition, the parent/affiliate relationships of the company, and legal history of mergers and acquisitions. This historical trail would be very helpful for delineating where the prospective or existing vendors' financial interests reside.

I hope you find this helpful, but I'd love to hear what other members are doing as well.