MICHIGAN
TECHNOLOGICAL
UNIVERSITY The Senate of Michigan Technological University
------------------------------------------------------------------------
(version of 3 Feb 95)
PROPOSAL 23-95
(Voting Units: Full Senate)
CONFLICT OF INTEREST POLICY
STATEMENT OF GENERAL PRINCIPLES
University conflict of interest is an extremely difficult subject, for it
touches on many different, but related, topics. Conflicts can be divided
into two basic categories. The first covers what many people
traditionally associate with the term conflict of interest--opportunities
for inappropriate personal gain during the pursuit of official duties.
These gains may be financial, but other forms of benefit (power,
political advantage, etc.,) might also be involved. Another form of
conflict has been labeled conflict of commitment, and refers to the
choices individuals make about their professional priorities, especially
the allocation of their time to the different institutions and
organizations they serve as professionals. Conflicts of commitment may
emerge when outside professional activities take priority over other
professional responsibilities of members of the MTU community to the
University. Attention to conflict of commitment is relatively recent,
but growing in importance.
This policy addresses conflicts emerging from professional activities.
(The distinction between professional and non-professional outside
activities is made clear below.) To be sure, conflicts of commitment
between one's university responsibilities and non-professional outside
activities (such as business enterprises unconnected to one's
professional career) can negatively affect performance of university
responsibilities. Members of the MTU community should be sensitive to
possible conflicts of commitment arising from such private activities and
exercise reasonable caution. But the University does not seek to
regulate the private decisions of individuals in areas completely removed
from their professional university functions. Conflicts of commitment
connected to non-professional outside activities are best addressed
through regular performance reviews, not conflict of interest procedures.
Michigan Technological University's conflict of interest and commitment
policies rest upon the following statement.[FOOTNOTE 1]
Upon becoming a member of the MTU community, every individual makes
a commitment to the University. Those who accept full-time
University appointments or employment are expected to accord the
University their primary professional loyalty. Every member of the
community is expected to arrange their personal interests and
activities so as not to conflict with their commitment to the
University.
This does not mean that members of the MTU community should avoid
involvement in outside activities both public and private. To the
contrary, such involvement often serves the University as a whole
and the greater public interest. Further, a state-funded, public
university such as Michigan Tech is expected to be broadly engaged
in meeting the needs of society for its improvement and enrichment,
including the application of new knowledge and improved
technologies.
Nonetheless, the efforts of members of the MTU community to balance
their commitments of time to the University and to outside
professional interests must result in their primary professional
commitment of time being made to the University. Similarly,
avoidance of conflict of interest requires that individuals not
realize gain, financial or otherwise, from the inappropriate use of
University property, funds, equipment, or prestige. Also,
individuals should not realize gain from outside professional
interests that would improperly influence the conduct of their
University duties.
The policies that follow are intended to assist members of the Michigan
Tech community as they carry out this complicated professional balancing
act. Detailed discussion is provided of many specific cases of conflict
of interest and of commitment. The content of these specific
recommendations is informed and connected by a set of general principles.
> It must be recognized that universities are not the same as other
institutions or organizations in society. Both the purposes and
goals of universities are different, as are the motives of
individuals working in universities, from other organizations. For
example, as a public university, one of the missions of Michigan
Tech is to serve the "public good" rather than narrow private
interests. For this reason, the public can expect--and universities
can establish--standards of professional conduct reflecting these
differences.
> Conflicts of interest will always exist, for they are inherent in
the requirements and expectations placed on members of academic
communities such as Michigan Technological University. Conflicts
are not always blatant; they are not always easily defined in terms
of obvious or absolute rights and wrongs. Indeed, many circumstances
exist where individuals can be involved in conflict situations
without realizing it. Because conflicts are unavoidable in many
instances, these conflict of interest policies are designed to
assist members of the MTU community to recognize and deal with those
real and perceived conflicts that arise. Efforts in this direction
should not be judgmental or punitive.
> The most basic and important procedure for achieving both a
balance of commitment and preventing conflicts of interest with
financial implications is full and open disclosure of potential
conflicts between an individual's public and official obligations
and responsibilities on the one hand, and outside professional goals
and interests on the other. Many conflicts are largely perceived.
The way to mitigate many of these is to disclose all outside
connections and relationships. Disclosure allows the University to
identify and address conflicts of interest.
> Recognizing and disclosing the existence of conflicts of interest
and commitment must be, primarily, the responsibility of individual
members of the Michigan Tech community. Individuals have to be
guided by a sense of professional responsibility, which must include
the recognition that they have a public trust as employees of a
public university and must be sensitive to potential conflicts. In
this respect, actions by individuals should protect the integrity of
Michigan Tech.
> Michigan Technological University has a responsibility to help
individuals resolve, or at least minimize, conflicts of interest.
Administrators have a special responsibility of creating both an
environment and the conditions that encourage full disclosure and
the mitigation of conflicts. Still, the resolution of conflicts
cannot and should not be left solely to administrators. A structure
and process should be created within the University to provide
assistance and guidance to the entire community.
POLICY OVERVIEW
Most situations that pose real or apparent conflicts of interest are
created by contacts or relationships between individual members of the
Michigan Tech community and external entities that compromise, or appear
to compromise, the judgment or activities of the individuals. Perception
is an especially slippery realm, for it is not guided strictly by "the
facts." And perception can be as damaging to the individual and to
Michigan Tech as clearcut, open conflicts. The standard that should be
applied in thinking about apparent conflicts of interest is how matters
will appear to an outside third party.
These policies primarily are intended to provide guidance for individual
members of the Michigan Tech community as they attempt to minimize those
conflicts of interest that will, inevitably, exist. A secondary goal is
to promote understanding of the difficulties associated with conflicts of
interest and to help faculty, researchers, administrators, the Board of
Control, and other members of the Michigan Tech community make decisions
that minimize, ameliorate, or eliminate those situations.
Conflicts of interest at Michigan Tech are divided into five categories
of increasing seriousness.
> Exempt Activities: Almost all outside professional activities can
pose conflicts of interest, if an honoraria or royalties are
received, or conflicts of commitment. But participation in certain
traditional professional activities expected of all members of the
MTU academic community does not have to be reported or disclosed.
These include, but are not limited to
> attending professional meetings;
> writing books, articles, and research reports; or creating
works of art;
> giving lectures, symposia, speeches, colloquia at other
universities;
> conducting site visits and program evaluations at other
universities;
> refereeing manuscripts for journals and publishers.
> Category I: Professional activities and academic service that pose
very little conflict of interest in traditional financial terms, but
can create conflicts of commitment.
> Category II: External professional relationships with minimal
financial interests, such as consulting relationships or
royalty-sharing arrangements.
> Category III: Outside business activities, including
entrepreneurial activities such as ownership of outside companies,
that are connected to one's professional activities within the
University and that involve more complex financial relationships.
> Category IV: Outside professional activities that create
unacceptable conflicts of interest.
DISCLOSURE MECHANISMS
Depending upon both local circumstances and the specific aspect of
conflict of interest at issue, individual units (departments, schools,
institutes) or the University as a whole will develop the specific
procedures implementing MTU's conflict of interest policy. The
mechanisms identified in this policy provide a framework for developing
these procedures. All procedures covering the entire MTU community shall
be presented to the MTU Senate for approval.
The guiding principle for resolving or mitigating conflict of interest
difficulties is public disclose of all outside relationships and
activities that might create real or perceived conflicts of commitment or
interest. In most instances, prior public disclosure will resolve
concerns about conflict of interest, especially in cases where only an
appearance of conflicts of interest or commitment exists. All members of
the Michigan Tech community have a responsibility to publicly disclose
the existence of any real or potential conflicts of interest. But
different standards of disclosure should be applied as one moves from
Category I to Category IV, reflecting increasing degrees of seriousness.
Thus advance disclosure is recommended for activities under Category I,
but can be made after the fact. Activities listed under Category III,
however, can only be undertaken after individuals make public disclosure
of real or potential conflicts of interest and receive permission from
supervisors or a review committee.
Disclosure can be accomplished by reporting to an immediate supervisor,
department head/chair, director, dean, vice president, or provost the
existence of outside connections that constitute potential conflicts of
interest or commitment. The provost and president will make any
necessary disclosures to the Board of Control. Disclosure must be
written.
Finally, purchasing officials, upper-level administrators who approve
purchases, and members of the Board of Control shall file annual
financial statements, to be placed in the University Library for public
review. Amendments to these documents should be filed as necessary.
AUTHORIZATION
In most instances, members of the MTU community will not need
authorization or approval from their immediate superiors before engaging
in outside professional activities. Unless specifically stated,
disclosure will constitute compliance with University policy and be
viewed as mitigating conflicts of interest or commitment.
Conflict of interest issues shall be handled at the lowest appropriate
administrative level. Certain cases, however, may require detailed
scrutiny and greater care in handling to protect the rights of all
parties. Moreover, activities that fall under categories III and IV
cannot be resolved by disclosure alone. In those instances, a
University-level review committee will examine the circumstances and
provide direction aimed at insuring the amelioration of inappropriate
conflicts of interest. (See Category III.)
CATEGORY I: CONFLICTS ASSOCIATED WITH OUTSIDE PROFESSIONAL SERVICE
Faculty, staff, researchers, and administrators at Michigan Technological
University are expected to serve both their academic professions and the
wider community of the region, state, and nation.[FOOTNOTE 2] Nothing in
these guidelines should be interpreted as discouraging such efforts.
Indeed, Michigan Tech strongly encourages this professional activity by
faculty, staff, and administrators, for such efforts usually complement
the other responsibilities of members of the Michigan Tech community.
Many University employees, including most faculty, must perform outside
professional service as evidence of professional development and merit.
Service to professional organizations includes holding any elected
office, serving on boards of directors, and conducting editorial
activities for journals, among other activities. However, these outside
professional activities can generate complicated demands on the time of
members of the MTU community, creating potential conflicts of commitment.
These usually can be mitigated and resolved by disclosure of the
activities in question to one's immediate supervisor, department
head/chair, director, or dean.
DEFINITIONS
1. Category I includes occasional outside consulting related to one's
area of professional expertise. Such consulting normally will involve
one-time activities for businesses, non-profit entities, educational
institutions, or government agencies, as distinguished from the
continuing or on-going consulting efforts described in Category II.
2. Other activities under Category I include outside professional
service. This is defined as special work performed or rendered with or
without compensation for any non-university entity or organization,
whether or not the work is performed on campus. Work supported by grant
or contract awarded to the University and duly authorized under
University policies does not constitute outside service. To be
considered outside professional service, the activity or work must
require distinctive training, expertise and/or certification that
qualifies the employee for paid employment at the University, or where
such activity in itself is a basis for paid work in the larger community.
Such positions and activities include editorships, secretariats, and
other administrative functions in national or regional organizations and
academic societies. (EXAMPLE: A faculty member who teaches accounting
performs professional service when acting as treasurer for a National
Society of Certified Public Accounts).
3. Outside community service activities do not generally fall under this
policy and its requirements for reporting, as they are not considered
professional service. (EXAMPLE: A faculty member who teaches accounting
and serves as treasurer for a local volunteer service agency is
performing community service, not professional service.) For some
members of the MTU community, the distinction between community service
and professional service is difficult to determine. (EXAMPLE: A
technical communicator writes a brochure for the Audubon Society.) When
in doubt, it is best to disclose such activity.
GUIDELINES
1. Members of the MTU community involved in outside professional service
or community service should not allow their activities to interfere with
their other responsibilities to the University. The amount of time
devoted to outside service should be within limits regarded as reasonable
by co-workers and colleagues. All employees should be sensitive to the
perceived and actual imposition their activities may pose for co-workers
and others within the University, and whenever possible adjust their
activities accordingly.
2. To avoid or reduce conflicts of commitment related to outside
professional service, members of the MTU community should disclose in
writing their involvement in such activities to their immediate
supervisor. The time and attention devoted to rendering an outside
professional service should not have priority over routine University
obligations, unless the individual is appropriately released from those
obligations.
3. Members of the MTU community must obtain approval in advance for
outside professional service that requires an unusual expenditure of
time, effort, and commitment.
4. Supervisors may request an alteration of patterns of outside
professional activity that, in retrospect, are deemed detrimental to the
college's, school's, department's, or individual's primary duties,
especially if they place excessive or disproportionate demands on the
time, energy, or intellectual effort of the individual involved. Members
of the MTU community may request a review off such decisions by the
University Conflict of Interest Committee. (See Review and Enforcement
below).
5. Individual members of the MTU community and supervisors share
responsibility for insuring that outside professional activities,
including limited consulting, do not exceed an average of one day per
five-day work week, and ten days per academic quarter. Faculty and
researchers, may, upon approval of their supervisors, be extended the
privilege of flexible scheduling of working hours so that some consulting
may be performed during otherwise normal working hours.
DISCLOSURE MECHANISMS
Members of the MTU community are encouraged to report outside
professional activities that create real or potential conflicts of
interest or commitment because they might influence proposed research or
involve substantial time or financial resources. Such disclosure may be
made after the fact to one's immediate supervisor--department head/chair,
dean, or director; disclosure may be either formal or informal. It is
recommended, however, that all activities requiring substantial amounts
of time be disclosed in advance and in writing.
CATEGORY II: EXTERNAL RELATIONSHIPS WITH MINIMAL FINANCIAL INTERESTS
Certain aspects of the efforts of members of the Michigan Tech community
to serve their professions or the wider community may create
opportunities for individuals to benefit from those efforts monetarily,
over and above their normal salary or regular compensation. These
opportunities include professional consulting, adoption of self-authored
textbooks, and royalties from patents. Michigan Tech encourages these
activities in the belief that such contacts and the activities benefit
both the University and the wider community. But conflicts of interest
and, more importantly, conflicts of commitment, are inherent in these
activities. When compensation is small, the primary conflict is likely
to be a conflict of commitment, as one diverts his/her time from regular
responsibilities at Michigan Tech to an outside professional activity.
The general solution is prior public disclosure of the activity to one's
immediate supervisor, department head/chair, director, or dean. Two
special cases in this category concern supervision of relatives and
research proposals.
1. CONSULTING [FOOTNOTE 3]
Michigan Tech encourages its employees to provide outside corporate,
government, educational, and non-profit agencies with the benefit of
their knowledge and expertise as a means of keeping faculty current in
their fields of expertise, of exposing students to the best practices
outside academia, and of expanding the visibility of Michigan Tech, its
faculty, and its researchers. Such professional work, when undertaken
for pay or external compensation not paid via the University, is
considered to be consulting. By definition, consulting is always in
addition to the full-time activities of members of the Michigan Tech
community. For this reason, consulting activities create potential
conflicts of commitment.
DEFINITIONS
1. This policy applies to consulting activities conducted during the
academic school year as part of an on-going relationship with a client,
as opposed to the one-time consulting visits described in Category I.
Professional activities or outside employment of any type undertaken by
faculty on nine-month appointments during their off-quarter (usually
summer) are not considered consulting, and are not subject to this
policy.
2. Consulting work should be undertaken by faculty on nine-month
appointments only when the individual's primary duties in the classroom,
research, and other academic areas continue to be performed at a high
standard.
3. Due to the greater demands placed on their time by the University,
faculty on twelve-month appointments should pursue consulting in a more
limited fashion.
GUIDELINES
1. Before beginning consulting relationships, members of the MTU
community must disclose their intentions to their immediate supervisors.
Supervisors may request termination or curtailment of consulting efforts
that are deemed detrimental to the college's, school's, department's, or
individual's primary duties, especially if they place excessive or
disproportionate demands on the time, energy, or intellectual effort of
the individual involved. Individuals may request a review of
supervisors' decisions by the University Conflict of Interest Committee
(See Review and Enforcement below).
2. Faculty members, upon the approval of their supervisor, may be
extended the privilege of flexible scheduling of work efforts so that
some consulting may be performed during what would otherwise be normal
working hours.
3. Individual members of the MTU community and supervisors share
responsibility for insuring that consulting activities do not exceed an
average of one day per five-day work week and ten days per academic
quarter.
4. Use of University Facilities
A. To protect the University from the appearance of inappropriate
endorsement of firms, products, or processes, consulting work should
be clearly separated from Michigan Technological University.
Correspondence and reports related to consulting activities should
not be written on University stationary, nor should the individual
be identified in such correspondence as representing Michigan
Technological University.
B. The University shall be reimbursed for the use of facilities,
including small-scale office or laboratory equipment, used in the
course of providing consulting services. If actual costs cannot be
determined, a rate of 15 percent of any consulting fee should be
used. Persons conducting projects involving more than minimal use
of equipment or University resources as determined by the
supervisor, department head/chair or dean, must make special
arrangements to schedule the use of those facilities or resources.
C. Members of the MTU community may not divert work from the
University into an external consulting situation for personal gain
for the purpose of avoiding payment of University overhead or to
reduce the cost to the sponsor or client. Faculty members and
researchers utilizing University facilities should be especially
careful to avoid the appearance of such diversion.
5. Other conflicts of interest can also emerge from consulting. To
avoid real or apparent conflicts, members of the Michigan Tech community
should:
> not compete with professional services offered through the
University;
> not accept consulting contracts that would be perceived by the
private sector as taking unfair advantage [FOOTNOTE 4];
> not accept consulting contracts that expose the individual to
actual or apparent conflicts arising from multiple concurrent
financial, recommendational, or occupational programs.
These points are not absolute restrictions, but guideposts designed to
protect both the individual and the University from real and apparent
conflicts of interest. Special attention should be paid to the second
point; members of the University community must recognize that they can
gain unfair competitive advantages over the private sector because of
their affiliation with MTU. A good rule is to voluntarily forego
consulting contracts for services that would be perceived by the private
sector as taking unfair advantage.
DISCLOSURE MECHANISMS
In all cases, consulting work may be undertaken only after prior
disclosure of such activity to an immediate supervisor, department
head\chair, director, or dean. Disclosure should also include
information about the reimbursement of costs to the University. In most
instances, disclosure will remove apparent conflicts. But the disclosure
and review process also provides an arena for resolving questions about
the appropriateness of complex or difficult consulting relationships.
2. ADOPTION OF SELF-AUTHORED TEXTBOOKS
This policy governing the adoption by faculty of self-authored or edited
books and course materials recognizes the fundamental importance of
academic freedom and its attendant responsibilities. In a university
community, faculty have the freedom to, and the responsibility of,
selecting whatever textbook or course materials they consider the most
appropriate for their classes. All textbooks and course materials
adopted for a class should represent, in the teacher's professional
opinion, the most appropriate choice for that class and the students
within it. The university community has the related responsibility of
providing an environment that supports faculty as they make the best
scholarship and research publicly available for the review, and use, of
other scholars and students. Students have the right to expect that
instructors will select books and course materials according to the merit
and appropriateness of these items, not for personal financial gain.
DEFINITIONS
1. Textbooks are books published by commercial presses and sold to
students, including books from university presses; books assembled
and/or published within MTU or through local duplication services for a
cost to students.
2. Course Materials are instructional materials (e.g., workbooks;
laboratory assignments; coursepacks; audio or video tapes; course notes;
computer disks, CDs, or laser disks containing collections of
instructional materials; among other forms) published by commercial or
university presses; and sold to students; material assembled and/or
published within MTU or through local duplication services for a cost to
students.
GUIDELINES
1. Faculty are encouraged to author, or edit, textbooks and develop
course materials in support of instructional efforts. However, faculty
should not sell books or course materials directly to students.
2. Faculty who use personally authored or edited textbooks and course
materials and who receive royalties from the sale of those books or
materials are encouraged to donate royalties accruing from such adoptions
in MTU courses to the Michigan Tech Fund. Such action will eliminate
even the appearance of conflict of interest. Royalties placed in Tech
Fund accounts may be used for academic or development programs.
DISCLOSURE MECHANISMS
To avoid potential conflicts of interest in this area, faculty who
receive royalties from the sale of textbooks and course materials should
disclose their selections for review at the department level.
Departments may choose to establish faculty committees to conduct such
reviews; alternatively, faculty should discuss their intentions and
rationales for their choices with the department head/chair, before
making a final decision.
3. ROYALTIES FROM PATENTS [FOOTNOTE 5]
University policy provides that researchers, faculty, and other members
of the Michigan Tech community who develop inventions or software that
the University successfully licenses receive a share of the royalty
payments from the licensee. Although such activities have a relatively
low potential for conflicts of interest, conflicts may arise from the
continued involvement of those individuals with their original idea,
especially commercialization activities.
GUIDELINES
1. Under normal circumstances, members of the MTU community may continue
research on a technology, process, product, or software developed in
whole or in part by that individual to which they (or a member of their
family) are entitled to receive royalties, but in which they have no
other financial interests in that project.
2. Similarly, individuals may assign students, post-doctoral fellows, or
other trainees to research projects in which that individual (or a member
of their family) is entitled to receive royalties, but has no other
financial interests in that project.
DISCLOSURE MECHANISMS
Members of the MTU community who receive royalties and continue to
conduct research in the same field must first disclose the existence of
these royalty payments to their immediate supervisor in writing before
continuing their research or assigning others to the project.
Supervisors may suggest special oversight or management procedures in
some cases, subject to the approval of the University Conflict of
Interest Committee (See Review and Enforcement below).
4. SUPERVISION OF RELATIVES
This recommendation is intended to prevent supervisors from being accused
of unfairly or inappropriately advancing the interests of a family member
or relative. This policy also applies to principal investigators
conducting sponsored research.
GUIDELINES
1. Primary responsibility for avoiding situations that create the
appearance of conflict of interest falls on the supervisor or principal
investigator.
2. Under no circumstances may supervisors initiate or participate in
University decisions involving a direct benefit (initial appointment,
retention, promotion, salary determination, leave of absence, etc.) to a
member of their immediate family (spouses, partners, children, brothers,
sisters, parents, etc.).
3. Supervisors should exercise caution in their involvement with
University decisions that lead to benefits for members of their extended
family or to domestic partners with whom they have a relationship
comparable to marriage.
4. Principal investigators of research proposals funded by outside
agencies and operated through Michigan Tech must abide by the same rules
as regards hiring and supervision of family members, relatives, etc., in
the conduct of research during the life of the grant or contract.
DISCLOSURE MECHANISMS
Supervisors have the primary responsibility for avoiding this type of
conflict of interest, and should excuse themselves from any situation
that might create even the appearance of nepotism. When in doubt,
supervisors should step aside from potential conflicts of interest and
seek advice from higher administrators, who may appoint alternate
supervisors for such cases.
Principal investigators of research proposals must disclose in writing
their intent to hire of members of their immediate family, etc., at the
time they submit grant and contract proposals to the University for
approval, and justify such a hire.
5. RESEARCH PROPOSALS
All proposals from members of the MTU community seeking support for
sponsored research from public and private entities must include a
disclosure form that identifies any potential conflicts of interest in
any way related to the proposed research by the principal investigator or
project participants. Potential conflicts include, but are not limited
to, intent to hire a family member as a subcontractor for the proposed
research, the existence of financial connections between the project
staff, including the P.I., and the research sponsor or client; and
financial involvement by the P.I. and/or other members of the research
team with an outside business enterprise.
GUIDELINES
1. All research proposals through Michigan Tech shall be reviewed for
potential conflicts of interest issues.
A. The P.I. and other investigators involved with the proposal must
attach a financial disclosure form with each research proposal.
This form must be updated at least once a year. (See Disclosure
Mechanisms below.)
B. The University Conflict of Interest Coordinator shall review the
disclosure forms from all research proposals. This review is
analogous to University's review of budgets and financial materials
for sponsored research proposals.
C. If the Conflict of Interest Coordinator finds no conflicts of
interest exist, or that the conflicts have been ameliorated by
disclosure, the Coordinator shall sign the disclosure form to this
affect. In accordance with the requirements of some federal
agencies, the Conflict of Interest Coordinator shall be the
designated signatory concerning conflict of interest reviews.
Research proposals may not be submitted to granting agencies or
sponsors unless approved in this fashion.
D. If the Conflict of Interest Coordinator identifies the existence
of a conflict of interest in a proposal, the Coordinator will work
with the principal investigator to propose remedies. With mutual
agreement, the proposal can be submitted. For more serious
conflicts, or if agreement cannot be reached concerning ways to
eliminate, mitigate, or ameliorate conflicts of interest, the
proposal shall be referred to the University Conflict of Interest
Committee to recommend steps to resolve the impasse (see Review and
Enforcement below).
E. In instances where a satisfactory resolution of actual or
potential conflicts of interest still cannot be achieved through
this procedure, the University Conflict of Interest Coordinator
shall contact relevant funding agencies to inform them of the
circumstances surrounding such cases.
F. After receipt of the award, investigators must update their
disclosure forms as significant new financial interests are
developed. Updates must continue at least annually during the life
of the project. Disclosure of significant potential or real
conflicts of interest after an existing grant or contract has been
awarded may require another review in accord with sections D and E
above.
G. Failure to provide complete disclosure at the time of the
submission of the proposal, or to update disclosure forms during the
life of the grant may lead to disciplinary procedures. Given the
responsibility placed upon individuals for the operation of Michigan
Tech's policy, failure to make disclosure is especially serious.
Sanctions may be imposed by the University; steps might also be
taken by funding sources outside the University, including
disbarment from future grants. (see Review and Enforcement below).
DISCLOSURE MECHANISMS
Disclosure in the context of research and grant proposals is to include
all "significant interests," i.e., salary, payment for services,
honoraria, consulting fees, equity interests (stocks, stock options, or
ownership rights), and intellectual property rights. Disclosure need not
include salary or remuneration from Michigan Tech; or ownership in
interests in institutions that are applicants under the Small Business
Innovation Research Program or Small Business Technology Transfer
Program; income from seminars, lectures, or teaching engagements at
public or private nonprofit entities; income from advisory panels for
public or nonprofit entities; or financial interests in business
enterprises that would in no way be affected by the proposed activity.
Disclosure would not be required for involvement by investigators in
business enterprises connected to the proposed project if the value of
that interest is less than $5,000 or represents less than 5 percent of
the ownership interest in any one enterprise (when aggregated with the
shares of the spouse and dependent children). Disclosure forms must be
updated at least once a year; any changes in status that might create a
conflict of interest must be reported immediately.
CATEGORY III: COMPLEX EXTERNAL RELATIONSHIPS, INCLUDING OUTSIDE BUSINESS
ACTIVITIES AND ENTREPRENEURIAL PROJECTS [FOOTNOTE 6]
Certain external relationships entered into by members of the Michigan
Tech community by their very nature pose complicated conflict of interest
problems. For example, Michigan Tech, like most state universities, is
expected to contribute to the state's economic development by encouraging
the movement of new ideas, processes, and technologies developed by
members of the MTU community into the marketplace. On occasion, members
of the MTU community have sought to turn ideas into marketable products,
jobs, and profits. Yet a state university is also prohibited from
providing improper preferential treatment to individual business
enterprises. These sometimes contradictory goals illustrate the basic
difficulty that emerges when University employees also have private
business interests related to their professional university
responsibilities--delineating clearly where activities that are part of
one's University position end and where outside activities begin. The
possibility of financially benefiting outside entities, as well as one's
self, further clouds the issue. Finally, it is also possible for
research efforts by members of the MTU community who are connected to
outside business interests to take unfair advantage of the University's
facilities, since these facilities are not available to potential
competitors.
Individuals who have financial interests (beyond royalty payments from
the University) in outside business activities growing out of their
research and professional expertise, or who serve on the boards of such
businesses, must take special precautions to insure that their outside
connections do not compromise, or appear to compromise, their primary
affiliation and obligation to Michigan Tech. As always, individuals
should disclose the existence of any real or perceived conflicts of
interest. But the complexity of these relationships makes it difficult
to anticipate every conceivable circumstance. Therefore, disclosure of
activities under Category 3 must be made in writing and in advance, and
University approval must be given BEFORE such connections can be
developed between members of the MTU community and outside agencies. The
University Conflict of Interest Coordinator (see below) may be used as a
resource in making such disclosure and developing steps to minimize any
potential conflicts of interest. The University Conflict of Interest
Committee shall review and approve all activities under Category III.
The committee is charged with examining the circumstances of all such
cases and with recommending mechanisms that best protect the University
and the individual involved.
This disclosure, review, and approval process governing all outside
business and financial relationships is not intended to discourage such
activities. Michigan Tech strongly encourages attempts to move ideas,
inventions, processes, and other technology into the marketplace. But
conflict of interest questions arise when the relationships and
connections between University responsibilities and outside activities
are ambiguous or, more importantly, overlap. The University Conflict of
Interest Committee shall recommend, on a case-by-case basis, ways to draw
clear boundaries between each individual's university responsibilities,
including research and teaching, and outside professional and business
activities.
DEFINITIONS
1.Activities that fall under Category III include, but are not limited to
> participation in trials, evaluation, or development of a
technology, process, product, or software owned or controlled by a
business in which the employee, a member of his/her family, or an
associated entity (trust or any other enterprise over the individual
exercise a controlling interest) has a consulting relationship,
holds stock or similar ownership interest, or has any other
financial interest;
> assignment of students, post-doctoral fellows, or other trainees
to projects supported by a business (either as sponsored research or
as a gift) in which the individual, a member of his/her family, or
an associated entity (trust or any other enterprise over the
individual exercise a controlling interest) has a financial interest
other than royalties under University policies;
> participation in, or taking administrative action on,
University-supervised sponsored-research or research through gifts
from a business in which the individual, a member of his/her family,
or an associated entity (trust or any other enterprise over the
individual exercise a controlling interest) has a consulting
relationship, holds stock or similar ownership interest, or has any
other financial interest, other than royalties under University
policies;
> receipt of research support (sponsored research or gift) from a
business in which the individual or a member of his/her family
serves on the board of directors or advisory board;
> assumption of an executive position in a business engaged in
commercial or research activities related to his/her University
responsibilities;
> holding of a financial interest in a business related to the
individual's university responsibilities that competes or has the
potential to compete with services provided by the University;
> taking administrative action on behalf of the University that is
beneficial to a business in which the individual, a member of
his/her family, or an associated entity has a financial interest;
GUIDELINES
1. Early efforts to establish a business to commercialize the results of
an individual's university research may require some latitude in these
areas. But once an enterprise has been established (and no later than a
year after the firm's establishment), members of the Michigan Tech
community must clarify their relationship between the University and the
business with which they have financial interests.
DISCLOSURE MECHANISMS
1. Members of the MTU community who have a financial interest in any
outside professional activity that is related to their university
responsibilities, including research, are required to disclose in
writing, and in advance of pursuing that activity, the nature and extent
of their involvement with the outside entity.
2. This financial disclosure should include a description of the nature
of the relationship; information on the short- and long-term commitment
of time and effort to the relationship; the financial aspects, including
extent of compensation, equity, indirect, or potential economic value;
expected benefits to the commercial entity; expected benefits to MTU; and
expected benefits to the individual.
CATEGORY IV: PROHIBITED ACTIVITIES
Certain external activities constitute such a blatant conflict of
interest that they must be prohibited. These include recommendation of
purchases from companies with which the individual has a significant
financial interest, and making referrals to a business with which the
individual has a significant financial interest.
PURCHASING
Purchasing is an area where concerns about conflict of interest
traditionally have focused, given the opportunities that exist for an
employee to benefit inappropriately from official activities. This
policy is designed to protect MTU employees from the appearance of taking
unfair advantages or making inappropriate gains through their control of
University purchases. The policy also protects the University and insure
that individuals responsible for purchases are not in a conflict of
interest and abusing their position. Obviously, an unacceptable conflict
of interest is created when employees responsible for purchasing make
purchases from a firm with which they or members of their family have a
financial interest. But the committee does not recommend that MTU NEVER
make purchases from firms owned partially or wholly by members of the MTU
community; nor does it wish to establish allowable thresholds of
ownership using dollar amounts or percentages of ownership. It is
unreasonable to completely restrict or eliminate purchases with
employee-owned companies. All companies may play a regular role in a
natural competitive market. This policy seeks to use disclosure
mechanisms to insure that the marketplace, not personal financial gain,
guides purchasing decisions.
GUIDELINES
1. MTU employees are expected to avoid conflicts, or the appearance of
conflicts, of interest regarding purchase orders with companies in which
they have any significant financial interest.
2. The MTU Purchasing Department subscribes to the National Association
of Educational Buyers (NAEB) Code of Ethics, which outlines a philosophy
and conduct for buyers who are committed to
functioning for the greatest benefit to the University and in accord with
ethical practices of the purchasing profession. The committee believes
this statement provides all necessary guidance for avoiding conflict of
interest in this area. Under the NAEB Code of Ethics, buyers promise:
A. To give first consideration to the objectives and policies of my
institution.
B. To strive to obtain the maximum ultimate value of each dollar of
expenditure.
C. To cooperate with trade and industrial associations, promotion
and development of sound business methods.
D. To demand honesty in sales representation whether offered
through the medium of an oral of written statement, an
advertisement, or a sample of product.
E. To decline personal gifts or gratuities which might in any way
influence the purchase of materials.
F. To grant all competitive bidders equal consideration, to regard
each transaction on its own merits, to foster and promote fair
ethical and legal trade practices.
G. To be willing to submit arbitration over any major
controversies.
H. To accord a prompt and courteous reception insofar as conditions
permit to all who call on legitimate business missions.
I. To counsel and cooperate with NAEB members and to promote a
spirit of unity among them.
3. Members of the MTU community who advise the University or any unit of
the University (for example, members of departmental committees concerned
with laboratory equipment or computers) concerning the purchase of
equipment or services valued at more than $25,000 and who have any
interest in the entity providing that service or commodity, must disclose
that relationship in writing
at the time they offer that advice.
4. Purchases may be made from firms in which the buyer has a financial
interest upon disclosure and approval by the buyer's immediate superior.
DISCLOSURE MECHANISMS
1. Individuals at Michigan Tech responsible for purchasing equipment and
services for the University must disclose any significant financial
relationships with potential vendors in writing on each purchase
requisition. Disclosure should be made about any level of ownership in,
or control of, a company with which you intend to do business using
university funds, equipment, expertise, or influence.
2. Individuals purchasing supplies or services under research grants or
sponsored programs also must comply with the agency guidelines and
standards specified in the individual contracts, as well as with MTU
policy. Such disclosure should be made as part of the research proposal.
3. Individuals who exercise a significant measure of control over
purchases because of their positions (buyers, University officers,
members of the Board of Control, etc.) must file an annual public
financial disclosure statement.
BUSINESS REFERRALS
Except within the context of consulting activities that conform to the
University's policies on consulting, a member of the Michigan Tech
community, while acting in the context of his/her University duties, may
not make professional referrals to a business or outside entity in which
he/she, a member of his/her family, or an associated entity has a
financial interest.
CONSULTANTS TO THE UNIVERSITY
A special case of the policy on business referrals concerns the
relationship of consultants retained by Michigan Tech. Consultants
(persons or firms) may not combine the role of adviser and provider of a
service. This division is designed to insure that the consultant does
not benefit improperly from the results of their advice. This rule shall
also apply when the consultant has a significant interest in a company
providing a service or selling a product to the University.
GUIDELINES
1. To eliminate or minimize potential or perceived conflicts of
interest, the principle of separation of functions should be applied in
employing consultants. In this context, the term "function" pertains to
advising versus performance of tasks.
2. A consultant who serves as an adviser to the University is
automatically disqualified from providing paid service (other than
advising) that has been the subject of his/her/their advice. Nor may the
consultant refer the University to an enterprise in which he/she/they
have a financial interest.
3. The individuals at Michigan Tech who contract for consulting services
are responsible to see that these rules are adhered to by outside
consultants.
DISCLOSURE MECHANISMS
Exception to the previous rule may be made if the contract for the
purchase of goods or services has been awarded through an open public
bidding process. However, such public bids must include public
disclosure, in writing, of the earlier advising service.
REVIEW AND ENFORCEMENT
Responsibility for dealing with and minimizing conflicts of interest
rests primarily on the individual members of the University community.
Nonetheless, it is clear that the University will increasingly find
itself held responsible by outside parties for insuring that conflicts of
interest are mitigated, minimized and otherwise addressed. Moreover, the
rights of individual members of the MTU community must be protected along
with the University's. Finally, cases will emerge requiring review by
the University to determine whether violations of policy have occurred.
Therefore, procedures must be established for the review of individual
disclosures, as well as the periodic review of the policies themselves
and the means of enforcing conflict of interest policies. Sanctions must
be established for the violation of those policies.
A series of steps shall be established as part of the University policy
manual to help members of the MTU community identify and resolve conflict
of interest issues, as well as to deal with cases of conflicts that
appear, including violations of University policy. These procedures
shall be approved by the University Senate.
UNIVERSITY CONFLICT OF INTEREST COORDINATOR
The University shall designate a Conflict of Interest Coordinator who
should be from an academic background and be familiar with the academic
and research process. The primary responsibility of this person shall be
reviewing disclosure forms from all grant requests and outside support
applications to identify cases that contain conflicts. The coordinator
will be designated by the University to sign the transmittal forms to
those federal agencies requiring certification that a conflict of
interest does not exist in the proposal. This person will work with
authors of proposals to identify means of minimizing or eliminating
potential conflicts of interest. When mutual agreement cannot be reached
on these steps, the coordinator will refer proposals that contain actual
or potential conflicts to the University Conflict of Interest Committee
(see below) for resolution and further examination. This person shall
also be designated to contact funding agencies in the event that
conflicts of interest cannot be resolved within the institution.
The coordinator will retain all records connected to conflict of interest
reviews for three years after all projects are completed. The
coordinator shall receive copies of other disclosure forms from within
the University and shall prepare annual reports on the incidence of
conflicts in research and other areas. Perhaps most importantly, the
Conflict of Interest Coordinator will serve as a resource for those
members of the MTU community seeking to gain more information about
conflicts of interest and commitment, how to avoid them, and how to
mitigate and resolve conflicts that appear. This person will assist in
the preparation of disclosure forms by investigators in a fashion
analogous to other MTU staff personnel who help prepare budgets and
financial statements for sponsored research proposals to outside
agencies. This person shall play the role of facilitator and educator on
the subject of conflict of interest at Michigan Tech, and shall work with
individuals, including department heads and administrators, in seeking
resolutions to potential conflicts of interest. Finally, members of the
MTU community who have concerns about potential conflicts of interest
involving other members of the MTU community may contact the coordinator
about their concerns. The coordinator shall contact immediate
supervisors so that possible conflicts of interest or commitment may be
examined in the normal fashion.
UNIVERSITY CONFLICT OF INTEREST COMMITTEE
1. All activities that fall under Category III, as well as research
proposals seeking outside support that contain conflicts of interest as
identified by the University Conflict of Interest Coordinator, will be
reviewed by a University Conflict of Interest Committee. This shall be a
permanent committee administered by the Senate. It is anticipated that
relatively few cases will require such a review. But for these reviews,
the committee shall add, on a case-by-case basis, additional members.
These additional members shall be appointed by the President of the
University Senate and the University administration for their knowledge
of the field of expertise as well knowledge of conflict of interest and
intellectual property issues.
2. The charge to this committee shall include the following:
> serve as an advisory committee for the Provost and to assess the
current situation in the University with respect to implementation
of the conflict of interest policy;
> inform the University Senate on the University community's
state-of-compliance with the conflict of interest policy;
> prepare recommendations concerning the modification of policy and
procedures pertaining to conflict of interest at MTU;
> review, in a timely fashion, all cases of Category III activities,
even those in which the Conflict of Interest Coordinator and a
member of the MTU Community have reached a satisfactory agreement.
In those cases connected to Category III activities where members of
the MTU community and the University Conflict of Interest
Coordinator cannot agree upon the steps that will best ameliorate
potential conflicts of interest or commitment related to, the
committee shall suggest steps to resolve an impasse. Either party
may request the involvement of this committee.
> help resolve, in a timely fashion, cases connected to research
proposals where members of the MTU community and the University
Conflict of Interest Coordinator cannot agree upon the steps that
will best ameliorate potential conflicts of interest or commitment,
the committee shall suggest steps to resolve an impasse. Either
party may request the involvement of this committee.
> hear requests from members of the MTU community for reviews of
decisions by immediate supervisors concerning conflicts of interest
at lower administrative levels. (see Category I and Category II);
If the committee, in considering cases of the first two types, finds that
a significant conflict of interest exists, it may recommend to the
Provost that a member of the MTU community take actions to ameliorate or
alleviate the conflict of interest. These actions include
> modification of the research proposal;
> monitoring of the research by outside or independent reviewers;
> disqualification of an investigator or investigators from
participation in that portion of the NSF-funded research which is
affected by the outside financial interest;
> stepping aside from direct management of the outside enterprise
while retaining financial interests;
> divestiture of financial interests in publicly trade business;
> divestiture of financial interests in privately held business;
> retention of financial interests, but withdrawal from University
activities, (i..e., alteration of individual's long-term research
program);
> resignation or leave of absence from the business in which the
individual has a financial interest;
Other possible avenues that individuals might choose to adopt to
eliminate real or perceived conflicts of interest include
> leave of absence from the University
> resignation from the University in order to pursue the interests
of the outside company.
VIOLATIONS OF UNIVERSITY POLICY
Specific and detailed procedures concerning disciplinary procedures must
be developed, including the sanctions that might be imposed for violation
of University policy in the area of conflict of interest. These shall
become part of the University Procedures manual, and should be subject to
approval of the University Senate.
1. All members of the MTU community, at the time they begin their
connection with the University, should be given copies of the University
policies in this area. Moreover, the import of these policies and the
procedures surrounding them should be explained. No member of the MTU
community should be able to say that they did not know about conflict of
interest issues or the policies governing this issue at MTU.
2. Michigan Tech has the authority to take action against individuals
who violate conflict of interest policy, if for no other reason than
requirements by some outside funding agencies require it to do so.
Sanctions ought to be graduated to reflect the seriousness of the
violation. Distinctions must be made between neglect, honest oversights,
or ignorance of procedures on the one hand and willful violations on the
other, especially deliberate failures to disclose relationships that
create conflicts of interest.
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FOOTNOTES
1. For purposes of this document, the MTU community includes everyone
with a professional or employment relationship with Michigan Tech,
including, for example, faculty, researchers, staff, students,
administrators, consultants retained by the University, unpaid advisors
to the University, and the Board of Control. The following statement is
adapted from the conflict of interest policies at Michigan State
University.
2. This policy replaces current Michigan Technological University
policies 5.1.7, 5.15.3, and 5.15.5.
3. This policy replaces University Policy 5.15.2 as well as the
statments in the Faculty Handbook on pp. 19, 21, and Appendix I,p.95
4. Examples of taking advantage include offering subcompetitive rates
for consulting services based on lower costs of doing business (lower
overhead, no charges for medical insurance, etc.), the use of University
facilities, or lower hourly rates for professional services. These
circumstances offer members of the University community an unfair
material advantage over professionals who must cover the full costs of
doing business.
5. This policy replaces current MTU policy as stated in the Faculty
Handbook, pp.22-23 and Appendices F and G.
6. The committee's recommendations in this section rest heavily on
guidelines developed at the University of Minnesota.
-----------------------------------------------------------------------
Development of Proposal
Apr 1993: Provost Dobney creates Ad Hoc Committee on Conflict of Interest
(below) to review and make recommendations for a conflict of
interest policy.
Bruce Seely, Chair
Tim Collins
Sherry Kauppi
Willie Melton
Karol Pelc
Rolf Peterson
Cynthia Selfe
Jon Soper
Nov 1993: Bruce Seely reports committee progress to the Senate.
Apr 1994: Bruce Seely reports committee progress to the Senate.
Sep 1994: Ad Hoc Committee forwards recommendations to the Senate.
Oct 1994: Bruce Seely presents recommendations to the Senate.
Feb 1995: Ad Hoc Committee forwards final recommendations to the Senate.
Feb 1995: Senate President Bornhorst designates document Senate Proposal
23-95.
------------------------------------------------------------------------
Appendix
Procedural Recommendations Accompanying
Draft Conflict of Interest Policies
Ad Hoc Committee on Conflict of Interest
February 3, 1995
1. General Disclosure Mechanisms
The committee believes that for most individuals, Quarterly Service
Reports will be a primary mechanism for disclosing potential conflicts of
interest or commitment. The existing form would have to be modified, but
this would provide a relatively simple and convenient way for most
individuals to disclose potential conflicts of interest.
An annual disclosure form must be developed for use by purchasing
officials, upper administrators, and members of the Board of Control.
The committee believes that a form used by Wayne State University offers
a good model for this form.
2. Category 1: Disclosure Procedures
It seems best to utilize the Quarterly Service Report as the primary
mechanism for the disclosure of Category I outside professional
activities, whether compensated or not. Category I activities also may
be reported using absence forms or other written communications with
immediate supervisors.
Disclosure of outside professional service that require a significant
time commitment should begin with the employee's immediate supervisor,
chair, head or director, and should include the name of the client or
organization, the nature, and the duration of the activity or commitment.
3. Category 2: Sponsored Research Disclosure
The first step here must be development of a University disclosure form
for research proposals.
This University disclosure form, which must accompany all proposals for
sponsored research support, shall be the primary means of disclosing
conflicts of interest in this area. Investigators must use this form to
disclose all significant financial interests (including those of their
spouses and dependent children) that would reasonably appear to be
directly and significantly affected by the proposed research or
educational activities.
Investigators also must disclose significant interests in entities whose
financial interests would be directly or significantly affected by the
proposed activities. This form should be updated at least annually, with
any changes in status that might create a conflict of interest reported
immediately on amended forms.
4. CATEGORY 4: Purchasing Disclosure
The best means of handling up-front disclosure for purchases would be to
modify the current purchase requisition to allow for disclosure for every
individual purchase.
5. REVIEW AND ENFORCEMENT
Detailed procedures need to be developed for the Conflict of Interest
coordinator's efforts, as well as for those of the University Conflict of
Interest Committee. Steps should be included to address concerns of
confidentiality and the protection of individual rights.
Violation of Policies
The committee believes that appropriate sanctions, the procedures
governing their imposition, and a specific appeals process to protect the
rights of those accused of violation of conflict of interest policy
should be modeled on those procedures proposed by the Committee on
Scientific Misconduct, or on procedures that govern other violations of
University rules.
Sanctions should range from warnings to temporary loss of the privilege
of applying for outside funds to termination of employment in the most
serious cases.
.