Conflict of Interest
Policy number: 1.3
Policy section: Institutional Affairs
Revised Date: January 2, 2019
Definitions of capitalized terms used herein are set forth in Appendix A.
The purpose of this policy is to ensure that whenever a Conflict of Interest arises, the University’s interests will not be compromised and will be treated by University Representatives as paramount to all other interests. All decisions and actions of University Representatives involving a Conflict of Interest are to be made in a manner that is consistent with this policy. This policy shall apply to all University Representatives. The Board of Trustees from time to time may adopt supplemental or alternative policies related to particular conflict of interest situations and issues such as conflicts of interest relating to the research activities of the University or the investment activities of the University.
3. Policy Statement
Since no conflict of interest policy can anticipate and specifically address every situation that may give rise to a conflict of interest, this policy is intended to provide guiding principles to University Representatives whenever a Conflict of Interest issue arises. University Representatives are encouraged to consult the General Counsel whenever there are any questions about whether a particular situation, relationship, arrangement, set of circumstances or transaction falls within the scope of this policy and how this policy is to be interpreted with respect to it. The University desires for Conflicts of Interest to be identified early and then to be properly disclosed and appropriately addressed in accordance with this policy. A Conflict of Interest shall be deemed to exist with respect to a situation, relationship, arrangement, set of circumstances or transaction if reasonable observers, having knowledge of all the relevant facts, would conclude that such matter does give rise to a Conflict of Interest.
4. Required Approval for Conflicts of Interest
No situation, relationship, arrangement, set of circumstances, or transaction giving rise to a Conflict of Interest shall be permitted without the prior approval of such Conflict of Interest by the Conflicts Committee or the General Counsel, as the case may be, in accordance with Section 6.
5. Required Disclosure of Potential and Proposed Conflicts of Interest.
- Trustees, Board Committee Members, Executive Officers and Deans. Each Trustee, member of a committee of the Board of Trustees, Executive Officer and Dean, after learning of any potential or proposed Conflict of Interest involving his or her personal interests, the interests of an Immediate Family Member or the interests of an Associated Entity of his or hers or of an Immediate Family Member, shall promptly make full disclosure of such matter to the Conflicts Committee.
- Faculty and Staff. Each faculty member and staff employee of the University, after learning of any potential or proposed Conflict of Interest involving his or her interests, the interests of an Immediate Family Member or the interests of an Associated Entity of his or hers or of an Immediate Family Member, shall promptly make full disclosure of such matter to the General Counsel.
- Disclosure of Potential or Proposed Conflict of Interest. Each University Representative, who becomes subject to the disclosure obligation under Section 5(a) or 5(b), shall promptly complete, sign and file with the Conflicts Committee or the General Counsel, as the case may be, a Potential/Proposed Conflict of Interest Disclosure Form (Appendix C) relating to the subject Conflict of Interest.
6. Approval Process
- Trustees, Board Committee Members, Executive Officers and Deans. With respect to any proposed Conflict of Interest involving the interests of a Trustee, Executive Officer, Dean or a member of a committee of the Board of Trustees of, the interests of an Immediate Family Member of any such person or the interests of an Associated Entity of any such person or of an Immediate Family Member of any such person, the Conflicts Committee shall, promptly after being notified of such Conflict of Interest, review the material facts and decide (i) whether such facts give rise to a Conflict of Interest and (ii) if so, whether such Conflict of Interest should be approved or disapproved.
- Faculty and Staff Members. With respect to any proposed Conflict of Interest involving theinterests of a faculty or staff member of the University, the interests of an Immediate Family Member of any such person or the interests of an Associated Entity of any such person or of an Immediate Family Member of any such person, the General Counsel shall, promptly after being notified of such Conflict of Interest, review all the material facts and decide (i) whether such facts give rise to a Conflict of Interest and (ii) if so, whether such Conflict of Interest should be approved or disapproved. The General Counsel shall provide to the Conflicts Committee a written report of all such determinations on December 31st and June 30th of each year for the respective prior six month period ending on each of such dates.
7. Terms and Conditions
The General Counsel and the Conflicts Committee shall have the authority to impose such terms and conditions as they deem appropriate, in their sole discretion, for granting approval to any proposed Conflict of Interest including implementing monitoring plans for such Conflict of Interest and imposing restrictions and reporting requirements on the University Representative, and on each Immediate Family Member and/or Associated Entity, involved in such Conflict of Interest.
8. Conflicted Person’s Limited Participation
A University Representative who is, or whose Associated Entity or Immediate Family Member or whose Immediate Family Member’s Associated Entity is, the subject of a Conflicts of Interest or a proposed Conflict of Interest that is being considered by the Conflicts Committee or the General Counsel pursuant to this policy, shall not attempt to influence and shall not participate in such consideration process, except where the General Counsel or the Conflicts Committee, as the case may be, requests that such University Representative provide information relating to the matter or be present at a meeting to explain the issues or respond to questions.
9. Disinterested Audit Committee
If any member of the Conflicts Committee would not be a disinterested party, with respect to a Conflict of Interest matter to be acted upon by the Conflicts Committee pursuant to Section 5(a), he or she shall excuse themselves from the process and not otherwise participate in it.
10. Disinterested General Counsel
If the General Counsel would not be a disinterested party with respect to a Conflict of Interest matter to be acted upon pursuant to Section 5(b), the President shall appoint another Executive Officer to act in the place of the General Counsel with respect to such matter provided such Executive Officer is a disinterested party with respect to such matter.
11. Record of Meeting
Whenever the General Counsel or the Conflicts Committee makes a decision as to whether to approve or disapprove a Conflict of Interest, the General Counsel or Conflicts Committee, as the case may be, shall prepare and maintain a written record of (i) the decision, (ii) the material facts relating to the matter and (iii) with respect to any approved Conflict of Interest, the terms and conditions, if any, imposed in the granting of such approval.
12. Annual Disclosure
- General. Each University Representative shall make, on a timely basis, all disclosures required of him or her under the provisions of Sections 12(b) and 12(c).
- Required Annual Disclosure Form. During January of each year, each Trustee, each member of a committee of the Board of Trustees, each Executive Officer, each Dean, and each person who falls within any of the categories of University Representatives that the General Counsel designates (by reason of their position within the University to sign contracts or to otherwise play a substantive role in the approval process for financial and other commercial commitments of the University) shall complete an Annual Disclosure Form (Appendix B) as provided to him or her by the University for that purpose and shall sign and file it with (1) the Chairman of the Conflicts Committee in the case of each Trustee, each member of each committee of the Board, each Executive Officer and each Dean and (2) the General Counsel in the case of each University Representative who falls within any of the categories designated by the General Counsel as being subject to this Section 5(b).
- Disclosure of Material Changes. Each University Representative shall complete and sign and file a revised Annual Disclosure Form promptly after the occurrence of any material change in the facts reflected in his or her most recently filed Annual Disclosure Form
13. Report to the Board of Trustees
In May of each year, based on disclosures made in the most recent Annual Disclosures filed pursuant to Section 5, the Conflicts Committee and the General Counsel shall report in writing to the Board of Trustees (i) all existing Conflicts of Interests, if any, involving a Trustee, a member of a committee of the Board of Trustees, an Executive Officer or a Dean and (ii) all Conflicts of Interest, if any, that the Conflicts Committee believes are material in nature to the University and that do not involve the interests of any Trustee, a member of a committee of the Board of Trustees, an Executive Officer or a Dean.
A University Representative shall neither encourage nor accept gifts, favors, services or gratuities from any person or entity, which to the knowledge of such University Representative, has or seeks a business relationship with the University provided, however, that a University Representative may accept gifts, meals, entertainment, and other social amenities having an aggregate value not greater than $250 per year from any single source.
15. Corporate Opportunities
If a University Representative becomes aware of a business, investment, or other potentially valuable opportunity that rightfully belongs to the University, and not to him or her or to an Immediate Family Member or an Associated Entity of such University Representative, such University Representative shall in writing bring the opportunity to the attention of the General Counsel or the Board of Trustees.
University Representatives shall not use confidential information acquired as a result of service to the University for any purpose unrelated to University business, or provide such information to any third party, without the prior written consent of the Board of Trustees or the President. Wrongful use of University information includes, but is not limited to, the use or disclosure of information to engage, invest, or otherwise participate in any business, project, venture or transaction.
17. Actions Not Valid
No transaction, arrangement, relationship, or action involving the University shall be invalid, or may be challenged by any person (other than the University) on the grounds that it is in violation of this policy or the principles set forth herein.
18. Policy Interpretation
The General Counsel shall have sole authority to make all interpretations of this policy. The General Counsel shall consult with the President and the Chairperson of the Conflicts Committee prior to making any interpretation of this policy that relates to a material matter involving a Trustee, Executive Officer or a member of a Committee of the Board.
The Board of Trustees shall have the authority to conduct an investigation of any suspected violation of this policy by any University Representative. A violation of this policy may be grounds for disciplinary action that the Board of Trustees deems appropriate against the subject University Representative.
Appendix A: Definitions
“Annual Disclosure Form” means, with respect to each University Representative, the Conflict of Interest disclosure form provided to such University Representative by the University as contemplated by Section 12.
“Associated Entity” means, with respect to any person, any corporation, partnership, trust or other entity (a) in which such person or an Immediate Family Member of such Person is a director, employee, officer, partner or trustee or holds another position in management or (b) in which such person or an Immediate Family Member of such person, directly or indirectly, possesses a Significant Interest.
“Board of Trustees” means the Board of Trustees of the University.
“Conflict of Interest” means a situation, relationship, arrangement, set of circumstances or transaction involving the interests of the University and with respect to which a University Representative, an Immediate Family Member or an Associated Entity of a University Representative or of an Immediate Family Member (a) may be perceived to have the potential to, or may actually, derive, directly or indirectly, a financial, occupational or other personal gain, benefit or advantage or (b) may be perceived to have, or may actually have, a personal interest in a matter that is inconsistent with or competes with the interests of the University.
“Conflicts Committee” means the Conflicts of Interest Committee of the University (which shall consist of not less than three and no more than five Trustees) that is established from time to time by the Chair of the Board of Trustees.
“Dean” means (a) the Dean of each University’s academic college/schools, (b) the Dean of Graduate Studies of the University, and (c) the Dean of Central University Libraries of the University.
“Executive Officer” means the President, the Provost, the General Counsel, the Treasurer, the Athletic Director and each of the Vice Presidents of the University.
“General Counsel” means the General Counsel of the University.
“Immediate Family Member” means, with respect to any person, the spouse, domestic partner, parent, stepparent, child, stepchild, sibling, stepsibling, grandparent, step-grandparent, grandchild, step-grandchild, father-in-law, mother-in-law, daughter-in-law, son-in-law, aunt, uncle, niece, or nephew of such person and any person who resides in the same household with such person.
“Potential /Proposed Conflicts of Interest Disclosure Form” means the form prepared from time to time by the General Counsel that is designated as the Potential / Proposed Conflict of Interests Disclosure Form contemplated under Section 5(c).
“Significant Interest” means, with respect to any person, (a) the, direct or indirect, equity or other beneficial interest in a corporation, partnership, trust or other entity owned by such person that, when combined with the, direct or indirect, equity or other beneficial interest owned in the same entity by such person’s Immediate Family Members and/or Associated Entity or by the Associated Entity of an Immediate Family Member of such person (x) when such interests have an aggregate value in excess of $5,000 (as determined through reference to public prices or other reasonable measures of fair market value) or (y) when such interests represent in the aggregate more than a 5% ownership interest in such entity or (b) the salary, royalties and other forms of economic benefits received from a corporation, partnership, trust or other entity by such person and his or her Immediate Family Members when the aggregate annual amount of such benefits exceeds $5,000, provided, however, that a University Representative or an Immediate Family Member shall not be deemed to have a Significant Interest in a publicly-traded entity by reason of an investment in that entity by another publicly-traded entity, such as through a mutual fund, of which the University Representative and Immediate Family Member do not, directly or indirectly, influence investment decisions.
“Trustee” means a member of the SMU Board of Trustees.
“University” means Southern Methodist University and its subsidiaries and affiliates.
“University Representative” means (a) a member of the Board of Trustees, (b) a member of a committee of the Board of Trustees, (c) an Executive Officer, (d) a Dean, (e) a member of the faculty of the University and (f) a staff employee of the University.
Appendix B: Annual Conflict of Interest Disclosure Form for Trustees, Members of Board of Trustees Committees, Executive Officers, Deans, and Other Designated University Representatives
Please visit this link for the Annual Conflict of Interest Disclosure Form.
Appendix C: Potential/Proposed Conflict of Interest Disclosure Form
Please visit this link for the Potential/Proposed Conflict of Interest Form.
Revised: January 2, 2019
Adopted: May 6, 2011