Governance, Ethics and General

Financial Conflicts of Interest for Senior Administrators

Section:	Governance, Ethics and General Policies
Policy Name:	Financial Conflicts of Interest for Senior Administrators
Policy Owner:	Vice President and General Counsel
Responsible University Office:	Office of General Counsel
Origination Date:	June 5, 1989
Revisions:	August 28, 2003; April 11, 2013; March 2016; August 29, 2018
Legacy Policy Number:	4-26

1. SCOPE OF POLICYThis policy addresses conflict of interest disclosure obligations and applies to all senior administrators as defined herein.
2. DEFINITIONSAs used in this policy, the following terms shall have the meanings indicated.
   1. “Officer” means an administrative officer of the University as designated under Section 3.3.1 of the Bylaws of the Board of Trustees and implementing resolutions adopted by the Board of Trustees pursuant to that Bylaw.
   2. “Senior administrator” means any officer; any University employee designated in subsections (1) through (5) of this section; or any other University employee who may be designated by the President to be a senior administrator for purposes of this policy because of such employee’s fiduciary, financial, or other duties. Without limiting the foregoing, the term “senior administrator” applies to a person holding any of the following positions, including those holding such positions on a temporary or interim basis:
      1. Deans, deputy deans, associate deans, and assistant deans;
      2. The Director of Intercollegiate Athletics and Recreation Services, Associate ADs, and Assistant ADs;
      3. The General Counsel and all attorneys reporting to the General Counsel;
      4. The deputy provost, associate provosts, and vice provost; and
      5. All vice presidents, associate vice presidents, and assistant vice presidents.
   3. “Organization” means an individual, company, association, partnership, or other entity, whether incorporated or unincorporated and whether for-profit or not-for-profit, that provides or has expressed an interest in providing goods or services to the University for compensation or remuneration.
   4. “Affiliate” means (a) an organization of which a senior administrator is an officer, director, senior administrator, partner, employee or agent; (b) an organization in which the senior administrator has a material interest; or (c) a family member of a senior administrator.
   5. “Material interest” means a financial interest in an organization by virtue of (a) ownership in excess of five percent of the organization’s outstanding stock or comparable ownership interest in a non-corporate entity; (b) a paid consulting or employment relationship with the organization; or (c) receipt of a gift, favor, benefit, or service from the organization if the cumulative value of all such gifts, favors, benefits, and services received by a senior administrator from such organization in any twelve-month period is $100 or more.
   6. “Family member” means spouse, parents, grandparents, siblings (whether whole or half), children (whether natural or adoptive), grandchildren, great-grandchildren, or any of these in step relationship. The term also includes spouses of siblings, children, grandchildren, as well as domestic partners.
   7. “Conflict of interest” means a situation in which:
      1. a senior administrator’s independence of judgment is compromised, the senior administrator exploits his or her position for personal or financial gain, or the University’s reputation is harmed because of: (a) the senior administrator’s material interest in a transaction for the provision of goods or services to the University for compensation or remuneration; (b) the senior administrator’s relationship with an affiliate; or (c) anticipated financial gain by an affiliate; or
      2. the personal, professional, financial or other interests of a senior administrator (including any family member of the senior administrators) may potentially or actually diverge from, or may be reasonably perceived as potentially or actually diverging from, the senior administrator’s professional obligations to the University of Delaware.
         A conflict of interest may exist whenever an independent observer might reasonably question whether the senior administrator’s professional actions or decisions, including the ethical and objective conduct of University business, are inappropriately influenced by considerations of personal gain, financial or otherwise.
   8. “General Counsel” means the University’s Vice President and General Counsel or designee.
3. POLICY STATEMENT
   1. It is the policy of the University that senior administrators shall act in a manner consistent with their fiduciary duty and responsibilities to the University, and that, should they have a conflict of interest, they shall promptly disclose the existence of the conflict and abide by the University’s decision on how the conflict should be managed.
   2. What constitutes conflict of interest or unethical conduct has a moral as well as a legal basis. The officers, faculty members, and other employees of the University are expected to maintain at all times relationships and practices in their University activities that are legal, ethical, and morally correct. It is essential that all employees of the University conduct University business and their private business and financial affairs that might impinge upon the University in a manner that stands the sharpest scrutiny by those who would seek to find wrongdoing.
   3. It is also essential that the University has on record a written statement of this expectation. The best way to ensure propriety and avoid even the semblance of wrongdoing is for all senior administrators to follow a practice of full prior disclosure in writing of any association, relationship, business arrangement, or circumstance that might suggest to disinterested and objective observers that decisions were made contrary to the best interests of the University and for personal gain or the gain of family, affiliates or non-University business associates at the expense of the University. Interests and actions that might otherwise be questionable may be judged to be entirely proper if the rule of full prior disclosure is followed.
4. POLICY STANDARDS AND PROCEDURES
   1. DISCLOSURE
      Each senior administrator shall be required to file on an annual basis, and at such other times as a potential conflict of interest may arise, a Disclosure and Compliance Affirmation Statement disclosing his or her financial interest, or that of an affiliate, in a transaction for the provision of goods or services to the University for compensation or remuneration and affirming that (1) the senior administrator has read this Conflict of Interest Policy, and (2) the senior administrator will avoid participating in any University decision involving or affecting such transaction or any University decision as to which for any reason the senior administrator’s independent judgment could be affected by a conflict of interest. Disclosure forms shall be circulated no less frequently than annually by the General Counsel, and each senior administrator’s completed disclosure form shall be filed with the General Counsel. It shall be the responsibility of each senior administrator to correct, update, or revise his or her most recent disclosure form as circumstances warrant.
   2. RECUSAL
      A senior administrator shall avoid participating in any University decision in which, by any reasonable standard, institutional or other connections could influence his or her independent judgment. Where the senior administrator is in doubt as to whether he or she should avoid participating in a decision, the senior administrator shall raise the issue in advance with the General Counsel for determination.
   3. PROCEDURE FOR MANAGING A CONFLICT OF INTEREST
      1. If a senior administrator discloses an actual or potential conflict of interest or has reason to believe that an actual or potential conflict of interest exists, the disclosure shall be referred to the General Counsel for analysis. The General Counsel shall notify the senior administrator’s supervisor or department head of the existence of an actual or potential conflict of interest. While the General Counsel’s analysis is being performed, the senior administrator shall recuse himself or herself from any decision-making role involving the matter that is the subject of analysis.
      2. The General Counsel shall evaluate the risk of an institutional conflict, consulting with the senior administrator’s supervisor or department head and any other individuals and offices as necessary.
      3. If the General Counsel concludes that an actual conflict of interest exists and a management plan is appropriate, the General Counsel shall prepare a written report to the senior administrator’s supervisor or department head and shall provide a copy of the report to the senior administrator. The report shall contain factual findings concerning the conflict of interest and a recommended management plan. A management plan may incorporate any or all of the following elements, together with any other elements that in the General Counsel’s opinion are required:
         1. Requiring disclosure to all affected parties of the identified conflict of interest;
         2. Requiring decisions made by the senior administrator to be reviewed by an independent reviewer;
         3. Requiring the senior administrator’s disqualification from participation in some or all aspects of the matter giving rise to the conflict;
         4. Voluntarily divestiture by the senior administrator or affiliate of material interests relating to the matter giving rise to the conflict as a precondition for participating in University decision making with respect to the subject matter giving rise to the actual or perceived conflict of interest; or
         5. Agreement on the part of the senior administrator or affiliate voluntarily to sever or discontinue relationships that create the conflict of interest.
      4. The senior administrator’s supervisor or department head shall accept, reject, or modify the conclusions and recommendations in the General Counsel’s report.
      5. If, in the General Counsel’s judgment, an actual or potential conflict of interest raises serious policy issues or has a significant public impact on the University’s mission or reputation, or if the senior administrator disclosing an actual or potential conflict of interest is the University President, then the matter shall be referred to the Chair of the Board of Trustees for action consistent with Section 1.4 of the Bylaws.
      6. The General Counsel shall be responsible for ensuring that the management plan is instituted and adhered to, and shall determine whether and when the management plan can be rescinded.
      7. If the senior administrator who discloses an actual or potential conflict of interest under this policy is the General Counsel or any individual reporting to the General Counsel, then for purposes of Section VI the conflict shall be referred to the President, who, in consultation with outside counsel, shall evaluate the risk of an institutional conflict and, if appropriate, impose a management plan.
   4. FAILURE TO DISCLOSE
      If a senior administrator fails to disclose an actual or potential conflict he or she is aware of, such employee may be subject to penalties, including termination of employment.
   5. APPEAL
      Any senior administrator who believes that he or she does not have an actual or potential conflict of interest despite a declaration to the contrary, should not be required under this policy to recuse himself or herself from participating in a particular University decision, or should not be required to comply with a management plan or any aspect of a management plan shall be entitled to ask the President for reconsideration of the action complained of. A request for reconsideration shall be addressed in writing to the President within five business days of the action complained of. The President shall respond in writing within five business days of receipt of the request. The President, at his or her discretion, may consult with the General Counsel (or, if the senior administrator requesting reconsideration is the General Counsel, retained outside counsel) or the Chair of the Board. The President’s decision on any such request shall be final.