Conflict of Interest Policy
Status: The Conflict of Interest Policy was established by the Audit and Risk Management Committee on April 19, 2007 and was last revised on May 11, 2011.
Article I: Purpose
DePauw University expects its trustees, officers, and employees to observe high standards of ethics and to report any conflict of interest, both in fact and appearance, while acting for or engaging in an activity affecting the University.
This policy sets forth DePauw University’s general policy and procedures regarding financial conflicts of interest in relationship to research or educational sponsored projects, as well as transactions and arrangements entered into that might benefit the private interest of a trustee, officer, or employee of the university or might result in a possible excess benefit transaction.
This policy is intended to supplement, but not replace any applicable state and federal laws governing conflict of interest. The University will fully comply with reporting obligations required by federal and state agencies.
Article II: Definitions
1. Person with Interest
Any trustee, officer, employee, principal investigator(s)/co-principal investigator(s) of an externally sponsored project (regardless of funding source), or member of a committee with governing board–delegated powers, who has a direct or indirect financial interest, as defined below, is a person with interest.
2. Financial Interest
A person has a financial interest if the person has, directly or indirectly, through business, investment, or a family member:
a) An ownership or investment interest greater than 5% in any business, investment fund, limited partnership, stock, separate account, commingled account, mutual fund, or other vehicle in which the University engages in a financial transaction, investment or business arrangement, or
b) A potential ownership or investment interest in (as defined in 2(a)), or compensation arrangement with any entity or individual with which the university is negotiating a financial transaction or arrangement, or
c) A role as an officer, director, trustee, or key employee of an entity that does business with the organization or is currently pursuing a business relationship with the University,
d) An arrangement as or through the principal investigator or co-investigator(s) responsible for the design, conduct, or reporting on research or educational activities funded or proposed for funding by an external sponsor.
3. Conflict of Commitment
A conflict of commitment exists when the external activities are so significantly demanding of the time and attention of the person with interest as to interfere with the responsibilities for which the individual is assigned.
4. Conflict of Interest
A conflict of interest arises when a person with interest is in a position to influence either directly or indirectly University business, research, or other decisions in ways that could lead to gain for the person with interest, the person’s family members, or others to the detriment of the University’s resources, integrity, mission, teaching, research or public image.
5. Conflict of Interest Committee
This committee shall consist of the Vice President for Academic Affairs and the Vice President for Finance and Administration.
Article III: Procedures
1. Duty To Disclose
In connection with any actual or possible conflict of commitment or interest, all persons with interest will be required to annually disclose, as well as immediately upon the identification of any apparent or implied conflict disclose, in writing the existence of any financial interest (see Conflict of Interest Disclosure Form).
In addition, with respect to sponsored programs, as required by Federal regulation, disclosure must be made prior to the time a proposal is submitted. All financial disclosures must be updated by the investigator(s) during the period of the award, either on an annual basis or as new reportable significant financial interests are obtained.
2. Determining Whether a Conflict of Commitment or Interest Exists
The Vice President for Academic Affairs and the Vice President for Finance and Administration will collect the annual Conflict of Interest Disclosure Forms and will conduct an initial review of each conflict of interest disclosure to determine if a potential conflict appears to exist, or, in fact, exists. Conflict of interest responses for the Vice President of Finance and Administration and the Chair of the Board of Trustees will be submitted to the Chair of the Audit and Risk Management Committee for review. In addition, a summary of all conflicts of interest will be presented annually to the Chair of the Audit and Risk Management Committee.
In addition to reviewing the conflict of interest submissions, the Finance Department will annually review a listing of vendors paid to identify any potential conflict of interests.
3. Procedures for Addressing a Conflict of Commitment or Interest
a) If a conflict appears to exist, the Vice President for Academic Affairs and the Vice President for Finance and Administration will consult with the other members of the Conflict of Interest Committee to confer, and if appropriate, discuss possible options to manage, reduce, or eliminate the conflict.
b) If such conflict involves the President or a trustee, the matter will be handled by the Chairman or a Vice Chair of the Board of Trustees, who is not involved in the conflict being investigated, with advice of the Chair of the Audit and Risk Management Committee.
c) If such conflict involves a member of the Conflict of Interest Committee, the Committee member involved will be excluded from consideration of the conflict.
d) During the course of the Committee’s investigation, persons with interest may be asked to provide additional information. It is understood that at this stage the committee members will share information so obtained only as necessary to resolve the conflict or as required by law.
e) After exercising due diligence, the committee shall determine whether the University can obtain with reasonable efforts a more advantageous transaction or arrangement from a person or entity that would not give rise to a conflict of interest.
f) The Committee shall, if appropriate, appoint a disinterested person or persons to investigate alternatives to the proposed transaction or arrangement.
g) If a more advantageous transaction or arrangement is not reasonably possible, the Committee shall determine by a majority vote whether the transaction or arrangement is in the University’s best interest, for its own benefit, and whether it is fair and reasonable. In conformity with the above determination, the Committee shall make its decision as to whether to enter into the transaction or arrangement.
In the case of funded or potentially funded grant projects, investigators will be asked to certify their familiarity with DePauw’s conflict of interest policy and disclosure requirements for each proposal submitted to an external funding source. If there is an apparent conflict to be disclosed, the investigator must complete the Conflict of Interest Disclosure Form and forward it to the Vice President for Academic Affairs.
Article IV: Violations
If the Conflict of Interest Committee has reasonable cause to believe a person with interest has failed to disclose actual or possible conflicts of interest, it shall inform the person of the basis for such belief and afford the person an opportunity to explain the alleged failure to disclose.
If, after hearing the response of the person with interest and after making further investigation as warranted by the circumstances, the Committee determines the person with interest has failed to disclose an actual or possible conflict of interest, it shall make a recommendation for disciplinary and/or corrective action to the person’s supervising University officer.