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CPO-2 Conflict of Interest and Commitment

Conflict of Interest and Commitment

Policy Number:  CPO-2

Effective Date:    July 1, 2014

Responsible Officer:  Chief Compliance Officer

I.     Purpose

Drexel University (the “University”) occupies a position of trust and responsibility in the community. It has obligations to external organizations, government entities, donors, parents, students, patients and the community to use its resources responsibly and, where required, for designated purposes. In meeting its obligations, the University expects all members of the University community to carry out their responsibilities with the highest level of integrity and ethical behavior.

In conducting its affairs, the University is subject to many complex laws, regulations, and contractual obligations.  For faculty and professional staff, whose broad activities are essential to the success of the University, it is important that there is cognizance of all legal and regulatory requirements associated with activities undertaken.

The University's policy is to comply with all laws and regulations affecting its activities. This policy on conflict of interest and commitment is intended to satisfy compliance requirements and guide University personnel in avoiding those situations that can result in a conflict of interest or commitment.  The key to avoiding these situations is awareness of what constitutes such conflicts, disclosure of potential situations before activity is undertaken, and a review of the situation.  After review, a determination may be made in certain cases to permit an activity, which may otherwise be considered a conflict, if it is beneficial to the University and can be effectively controlled to ensure compliance with all legal, regulatory and other requirements.

In its endeavors to advance knowledge through research, it is the University’s policy to follow policies and practice that will ensure the integrity of the research conducted at the University.  As such, and as a result of this being a highly specialized area with unique requirements, the University has established separate policies and procedures covering research conflicts of interest and commitment, which can be found here: 

http://www.research.drexel.edu/administration/Compliance/FCOI_Policy.pdf  

Any research-related potential conflicts of interest that may arise or be disclosed through the Annual Conflict of Interest process will be immediately forwarded to the Senior Associate Vice Provost for Research for further processing and resolution in accordance with the above-referenced research policies and procedures.   

In addition, this Conflict of Interest and Commitment policy should be considered supplementary to other University policies that may obligate Members of the University Community to disclose information, including, but not limited to:

 HR-46 (Nepotism/Employment of Relatives & Consensual Amorous Relationships):

 http://www.drexel.edu/hr/resources/policies/dupolicies/hr46/

CPO-1: Code of Conduct

II.    Applicability/Scope

This policy applies to Drexel University and its subsidiaries and affiliates and governs activities wherever they are conducted, both in the United States and abroad.

III.   Policy

It is the policy of the University that all Applicable Members must discharge their duties in the best interests of the University.  

In this Policy, the following definitions shall be used:

The term “Applicable Members” includes the following:

A.  Trustees

B.  President, Officers, and all professional staff

C.  Full Time and Part-Time Faculty;

D.  Any other members of the University community who have been notified by the University that disclosure is required.

The term “Immediate Family” includes the following:

The Applicable Member’s spouse, parents, children, children of spouses, siblings, aunts, uncles, and cousins and any entity with which he or she may be associated.

Therefore, each Applicable Member must:

  1. Refrain from putting the interests of any individual, agency, organization, above the best interests of the University.
  2. Refrain from any activity or transaction that could influence or cause an Applicable Member not to act in the best interests of the University, including, without limitation, any personal business transaction or private arrangement, whether direct or indirect, for personal profit which accrues from or is based upon a position of authority with the University or upon confidential information which is obtained by reason of such position of authority.
  3. Disclose any financial, ownership, or management interest in any entity engaged in the delivery of educational services or in the delivery of goods or services to the University.
  4. Refrain from participation in a transaction with the University for personal profit except upon the written approval of the Applicable Member’s supervisor. Such approval shall be disclosed in a Conflict of Interest Disclosure Statement (“COI Disclosure Statement”).
  5. Disclose any personal activity or business opportunity, which is within the scope of the activities of the University and refrain from exploiting such opportunity except upon written approval of the Applicable Member’s supervisor.
  6. Refrain from accepting any personal gift, gratuity, meal or entertainment from any person or entity that can influence the exercise of the employee's professional judgment on behalf of the University except as permitted under the University’s “Acceptance of Personal Gifts” policy, which can be found here Acceptance of Personal Gifts.
  7. Refrain from making or tendering payments, gifts or services to or for the benefit of any government or accrediting agency official, employee or designee who is in a position to influence directly or indirectly, any government or accrediting agency action or decision.
  8. Refrain from entering into any transaction with any employee of a community organization which receives funding from the University in such employee's individual capacity, or with any entity owned in whole or in part by such employee, unless a written certification from the community organization has been obtained in which the community organization confirms that the transaction is permitted and in compliance with any policies and procedures applicable to the community organization, including without limitation, conflicts of interest policies and procedures.  The Drexel employee responsible for the transaction shall obtain such certification.
  9. Refrain from making or soliciting contributions, in the name or on behalf of the University or with University funds or facilities in any form to, or in aid of any political party, group, candidate or cause.
  10. Have gifts arranged through the Office of Institutional Advancement (OIA).  Any Applicable Member who becomes aware that an organization or individual desires to make a gift to the University shall contact OIA to make the necessary arrangements.
  11. Refrain from entering into any transaction with any governmental official or employee in such person's individual capacity, or with any entity owned in whole or in part by such governmental official or employee, unless a written certification from the governmental agency has been obtained in which the governmental agency confirms that the transaction is permitted and in compliance with any policies and procedures applicable to the governmental agency, including without limitation, conflicts of interest policies and procedures.  The Applicable Member responsible for the transaction shall obtain such certification. 
  12. Refrain from participating in any employment, salary, or other important decision regarding an Immediate Family Member. Members of the same Immediate Family may not be employed in a situation where one member of the family works under the administrative supervision of another. See the University’s policy titled “Nepotism/Employment of Relatives & Consensual Amorous Relationships” (HR-46). 

If there is any doubt about a situation and whether it may constitute a conflict of interest, employees shall discuss it with their supervisors to determine what action, if any, needs to be taken. Applicable Members may also contact the Chief Compliance Officer (“CCO”) regarding a question in this area.

Applicable Members found to be non-compliant with this Policy may be subject to disciplinary action, including, but not limited to, loss of merit salary pay increases and termination of employment.

IV.   Procedures

The President of the University or his/her designees will administer the Conflict of Interest and Commitment policy. The President may, at his or her discretion, refer selected issues or matters to the Audit Committee of the Board of Trustees.

  1. This policy is to be communicated at least annually to all Members of the University Community by the administration.  This communication shall be in writing and may be done electronically.  
  2. A link to access the University’s COI Disclosure Statement will be e-mailed annually to Applicable Members. Completed COI Disclosure Statements are to be submitted by the due date set for the program each year.  However, Applicable Members shall access the COI Disclosure Statement to provide updated information, as required, at any time. The immediate supervisor, or his or her designee, of a newly hired Applicable Member (or, in the case of a Board member or the President, to the designee of the Board) will provide the Applicable Member with a COI Disclosure Statement within thirty (30) days of the Applicable Member’s commencement of his or her position. The Applicable Member must submit the completed COI Disclosure Statement to the immediate supervisor or designee for initial review within thirty (30) days of receipt. Subject to the other provisions of this Section IV, the CCO or his/her designee will follow up regularly with relevant Applicable Members or their supervisors in order to attempt to achieve full compliance by all Applicable Members.  The supervisor will maintain the completed and submitted COI Disclosure Statements. An employee’s supervisor or management may require an Applicable Member to complete these statements whenever a situation arises that may potentially involve this Policy.
  1. In order for a determination to be made as to whether a particular relationship gives rise to a conflict of interest, Applicable Members must disclose all Financial Interests in or with any outside person or entity engaged in the delivery of goods and services of any kind to the University, engaged in activities which could reasonably be construed to be in competition with the University, or which otherwise reasonably relate to the Applicable Member’s University institutional responsibilities. For the purposes of this policy, a “Financial Interest” means a relationship with any person or entity from which an Applicable Member or any Immediate Family Member derives something of value, including: (i) an interest of $5,000 or more in a publicly traded entity or any interest whatsoever in a non-publicly traded entity (but excluding any interest arising solely by reason of investment in such business by a mutual fund, pension, or other institutional investment fund over which neither the Applicable Member nor an Immediate Family Member exercises control); or (ii) Receipt of, or the right or expectation to receive, any income from such entity in one or more of the following forms: a consulting fee, honoraria, salary, allowance, forbearance, of technology or other processes or products, rent, capital gain, or any other form of compensation.
  2. A disclosure of conflict of interest or potential conflict requires that the supervisor review the situation and document a suggested resolution. The disclosure statement and suggested resolution shall be forwarded to applicable management for approval. Usually, the minimum level of such approval is Dean for academic areas and Vice President for administrative areas. It is expected that Deans and Vice Presidents will investigate the situation and confer with necessary personnel, including the CCO and an advisory committee as necessary. The Applicable Member making the disclosure will be notified of the resolution.  All resolutions must be made in the best interests of the University.
  1. Applicable Members may appeal a resolution regarding a disclosure. The normal channel for appeals is the next higher administrative level. For academic areas an appeal may be made to the Dean, Provost, and finally the President. Administrative areas may appeal to a Vice President, Senior Vice President, and finally the President. Each level of appeal shall arrive at a resolution within thirty (30) days from the date received by the reviewer. All appeals must be made in writing.
  2. The CCO will maintain a complete copy of all documentation resulting from COI Disclosure Statements in electronic format for a time period consistent with the University’s Record management policy.  All disclosure statements shall be available for review by appropriate University personnel and agents including the Office of the General Counsel (“OGC”), the CCO, and external legal advisors and auditors.
  3. Conflicts involving senior management who report directly to the President are to be resolved by the President in consultation with the CCO, the OGC, and the Board of Trustees if deemed necessary.
  4. Conflicts involving the President are to be resolved by the Audit Committee of the Board of Trustees whose recommendation shall be approved or modified by the Board of Trustees.
  5. An Applicable Member who is aware of a potential or perceived conflict of interest involving another Applicable Member(s) shall report the situation by filing a written notice with the supervisor of the person(s) potentially involved in the conflict of interest.  Reasonable supporting information or materials shall accompany the COI Disclosure Statement. It is a violation of University policy to retaliate against an Applicable Member who files such a statement raising a potential or perceived conflict of interest. It is also a violation for an Applicable Member knowingly to file a false statement. If such actions shall occur, they shall be brought immediately to the attention of the CCO.

V.    Disclosures

A conflict of interest situation or potential conflict of interest could arise at any time. It is therefore required that such a situation be disclosed before occurrence or as soon thereafter as possible. If an Applicable Member is in doubt about a situation it shall be fully disclosed so that a determination can be made.

VI.   Examples

The following are common situations (although these are not to be construed as a comprehensive list) involving a conflict of interest or commitment and as such must be disclosed and a determination made as to their permissibility:

  1. Providing consulting or managerial services to any organization doing business with the University, seeking to do business with the University, or which is a competitor of the University.
  2. Using University resources, facilities, and personnel for non-University related activities in more than a de minimus or incidental amount or fashion.
  3. Participating in any activities or transactions that would cause the relationship with a vendor to be other than “arm’s length.”
  4. D.  Faculty members assigning students the Faculty Member’s self-authored textbooks or computer programs or other course materials that require the students to pay a fee for such works.