The Dangers of Political Contributions and Outside Organizations

The Challenge

Recent political events in the United States have highlighted the need for companies to have a robust process in place for identifying the risks associated with political contributions and outside organizations. What can seem like a low risk opportunity to curry favor and influence with politicians or an employee’s association with outside political organizations can potentially be problematic for the company and its reputation with its employees, customers, and the community at large.

Were the political donations used to fund illegal, criminal or questionable activities? Are employees serving on Boards or engaging in pro bono work for organizations that don’t share the same values as the company? Any of these situations can cause permanent damage to a company’s reputation. And as we have seen, social media can inflame the public’s reaction to the company’s involvement.

The Solution

So, what is a company to do to prevent and mitigate these risks from occurring in the future. First, companies need a well-defined policy for political contributions and employee involvement with outside organizations. Second, companies need to train employees on the risks associated with political contributions and outside organizations. Third, companies need to put in place a robust process for disclosing and vetting political contributions and involvement in outside organizations.

informed360’s Dynamic Disclosures can help your company automate and manage the risks associated with political contributions and outside organizations. Our easy-to-use tool allows employees to request political contributions before they are made. Compliance and management can then review and approve or set automatic approval thresholds based on company policies. Employees can also disclose their involvement in outside organizations including for-profit and non-profit organizations. These disclosures can then be evaluated for compliance with company policies and tracked for potential risks in the future. informed360’s Dynamic Disclosures also comes with other pre-built and configurable disclosure forms including Conflicts of Interests, Gifts and Entertainment, Charitable Donations, Government Contacts, and many more.

The Conclusion

The financial and reputational risks associated with political contributions and outside organizations will only continue to increase in the current environment. It is more important than ever for companies and compliance teams to be proactive in addressing these risks.

To learn more about Dynamic Disclosures and how informed360’s suite of leading compliance tools and data integration services can help you be more effective, please contact us at info@informed360.com.

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