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Interim Guidelines for Potential Conflicts of Interest in Academic Areas of the University

VI. RESEARCH AND CREATIVE ENDEAVOR (Cont.)

INTERIM GUIDELINES FOR POTENTIAL CONFLICTS OF INTEREST IN ACADEMIC AREAS OF THE UNIVERSITY

Commercialization by faculty/academic staff of their research poses special conflict of interest possibilities. These are dealt with through the following Interim Guidelines for Potential Conflicts of Interest in Academic Areas of the University approved by the Board of Trustees on October 22, 1982.

I. Preamble

Universities have very important roles in the societies which support them. Among these roles is honest and candid assessment of ideas, facts, the state of knowledge and of assessments made by other groups or organizations. This important role of certifying the accuracy, validity or status of information is only possible if those who perform the task are, and are perceived to be, free from bias and conflicts of interest.

Further, faculty and academic administrators in accepting full-time University appointments thereby make a commitment to the University that is understood to be full-time. Every academic member of the University is expected to accord the University his or her primary professional loyalty, and to arrange outside obligations, financial interests and activities so as not to conflict with this overriding commitment to the University.

At the same time, involvement of University professionals in outside professional activities, both public and private, often serves not only the participants but the University as a whole and the public interest as well. Further, a land-grant university such as Michigan State University is expected to be broadly engaged in facilitating the application of knowledge to new and improved technologies and to meet the needs of society for its improvement and enrichment.

The potential for real and perceived conflicts of interest and conflicts of commitment that can arise when academic employees are simultaneously involved in more than one organization must be clearly identified by the individuals themselves and made known to their chairpersons, deans or other administrators so that any potentially detrimental influences can be avoided.

The University already has several sets of policies and procedures for guiding activities in these areas. Among these are the Bylaws of the Board of Trustees, the MSU Faculty Handbook, Faculty and University Rights in University Sponsored Instructional Materials, Michigan State University Patent Policy, Basic Policies for Sponsored Research and Consulting Relationships, Outside Work for Pay, and others. It is the academic employee's responsibility to be aware of the content of these policies and guidelines, and when in doubt, to refer the full details of the matter to an appropriate academic administrator.

The growing frequency with which current or prospective faculty research provides a point of departure for commercial development of a technology is bringing new exposure of academic employees to potential conflicts of interest and conflicts of commitment. The University wishes to encourage the emergence of new high technology industries while avoiding the problems that potential conflicts of interest can bring. The following interim guidelines will provide a framework for handling these potential conflicts. Following review of these interim guidelines by appropriate academic governance committees, existing policies and guidelines will be amended to provide for these special cases.

II. Supplemental Guidelines and Procedures for Addressing Potential Conflicts of Interest and Conflicts of Commitment when Dealing with Firms in which MSU Faculty Have an Interest

A. Definitions

1. Conflicts of Interest are situations in which University employees may have an opportunity to influence University administrative, business or academic decisions in ways that could lead to personal gain or give improper advantage to others.

2. Conflicts of Commitment are situations in which a University employee's external activities, often valuable in themselves, and even when they result in no personal gain or improper advantage for others, nevertheless interfere improperly with his or her paramount obligations to students, colleagues and the University.

B. Proposed Guidelines and Procedures

1. The applicable laws of the federal government and the state of Michigan and policies of the Board of Trustees of Michigan State University shall control University guidelines and practices for addressing potential conflicts of interest.

2. Where faculty are participating in a firm wishing to negotiate a patent or copyright license or a contract involving some of those faculty, full written disclosure is required of all aspects of any and all participating faculty member(s)' relationship with that firm. Such written disclosure must be provided by the faculty member(s) and/or the company before any agreements with the company can be completed. Disclosed information must be provided in writing to the department chairperson, dean and the University officers negotiating the particular agreement under consideration.

3. If disclosure reveals that the potential for conflicts of interest is of a de minimis nature, the cognizant University officers may proceed to negotiate agreements and to institute appropriate safeguards. If the disclosures reveal that the potential for other than de minimis conflicts of interest or conflicts of commitment are present, an agreement may not be completed without a formal prior report by the president to the Board of Trustees. If acceptable means can be assured for avoiding undesirable consequences of the conflict situations, the president shall inform the Board of the proposed procedures. The Board may delegate the decision to approve the agreement to the president or reserve it for themselves.

4. De minimis potential for conflicts of interest shall be deemed to exist if a), b) or c) prevail:

   1. There is only one MSU faculty member involved with the company and all five of the following are true:

      1. The faculty member and his or her immediate family cumulatively own or have options to buy less than five (5) percent of the company's voting stock,

      2. The faculty member holds no executive office in the company and is not a member nor an officer of its Board of Directors,

      3. The faculty member contemplates no consulting arrangement with the company that exceeds the University's upper limits on number of days per month or the upper limits for rates of pay for consultants of comparable expertise and experience in the field,

      4. The faculty member agrees in writing to make no changes in any of these relationships during the period of any agreement between the company and the University without prior notice to and approval of the University,

      5. The faculty member agrees to report annually to the chair, dean and cognizant University officer on the agreement concerning his/her relationships with the company.

      - OR-

   2. If there are two or more MSU faculty members with relationships to the company and all five of the following are true:

      1. They and their families collectively do not own or have options to buy more than thirty (30) percent, nor individually own or have options to buy more than five (5) percent of the company's voting stock,

      2. They hold no executive offices nor board memberships nor board office in the company,

      3. They contemplate no consulting agreements that exceed University limits on days per month or exceed the rate paid to other consultants of comparable expertise and experience in the field,

      4. They each agree in writing not to change their relationships with the company without notification of and prior approval by the University,

      5. They each annually report to the cognizant University officer responsible for managing the agreement with the company concerning their relationships with the company.

      - OR

   3. A faculty member agrees to reduce his/her appointment in the department during the period of potential conflict and this is approved by the chairperson, dean and provost.

5. Other than de minimus potential conflicts of interest are those situations which exceed the limits outlined in B.4. These are to be handled as stated in B.3.

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