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Conflict of Interest

Effective: Moved to Policy Library from UPM 2.5(3), UPM 3.1(3), UPM 3.1(4)
Contact: Office of the Executive Vice President and Provost (EVPP)

Contents

Introduction

It is the policy of Iowa State University to comply with state and federal law regarding conflicts of interest. University employees are required to comply with Iowa Code § 68B.2A Conflicts of Interest and the policies and rules of the Board of Regents, State of Iowa (Iowa Administrative Code Section 681-8.9 and Regents Policy Manual).
The federal government requires that universities receiving federal funding maintain a written and enforced policy on conflict of interest (OMB A110). Iowa State University has adopted policies consistent with state and federal law and Regents policies and rules.
See Resources section below for related laws, rules, and policies.

Policy Statement

As a land-grant institution with a strong commitment to research and outreach, Iowa State University and its employees have traditionally interacted with government bodies, private companies, and individuals external to the institution. As interest grows in stimulating technology transfer and encouraging economic development, the number and types of external relationships will grow correspondingly. The complexity of Iowa State University's increasing interactions with non-university entities confronts faculty and staff members with a variety of issues and concerns. Central to these is ensuring that all parties to an agreement are fully aware of any personal or contractual relationships that might have relevance to or compete with a particular project.
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Principles

A conflict of interest may take various forms, but arises when a faculty or staff member is or may be in a position to influence the university's business, research, or other decisions in ways that could lead to any form of personal gain for the faculty or staff member or others closely associated with that university employee.

Purpose

This policy provides a mechanism for:

  • Identifying conflicting non-university relationships
  • Informing those with a need to know about conflicting relationships through disclosure
  • Taking remedial steps to protect the interests of all concerned

Relationships

The nature of faculty and staff relationships varies widely, so it is not possible to define precisely and exhaustively all situations in which a potential conflict of interest may arise. The following categories do not constitute an exclusive listing, but they do represent the most prevalent types of relationships.

Consulting Activity
It is common for faculty and staff members to serve as consultants for non-university entities. Depending upon the entity and the nature of the activity, consulting may not cause any conflict of interest for a university employee. Payment or a retainer for a consultant's time and expertise is appropriate in many instances.

Equity Interest
University employees are free to own stock in private companies, and relatively modest holdings are not a matter of university concern. An employee who holds equity in or stock options that represent more than $10,000 or five percent of the total company equity is considered to have an equity interest in that company.

Management Role
A university employee may serve as a director, scientific director, board member, or line officer or hold another management position in a company.
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Assessment of Potential Conflicts

A faculty or staff member's consulting relationship with, equity interest in, or a management role within a non-university entity does not necessarily constitute a conflict of interest. A potential conflict may arise, however, when such relationships interfere or compete with one another or with an employee's relationship to the university. Again, because of the variety of possible combinations and complexities, it is not feasible to describe all potentially conflicting situations. Therefore, the following are to be viewed only as examples of relationships that may require disclosure.

Consulting Activity
A potential for conflict arises when an individual seeks or is awarded a contract for sponsored research through the same entity for which paid consulting is being or has been done. Similarly, if one person is serving as a consultant for two or more clients who are themselves in competing or conflicting relationships, the potential for a conflict of interest does exist.

Equity Interest
As with consulting, the existence of an equity interest does not alone constitute a conflict of interest. However, if an employee with such an interest is asked to consult for or is provided research funding from that company or one of its competitors, the potential for a conflict of interest does exist.

Management Role
If the management role is directly related to research, marketing, or other activities either for the university or for a competing company, the potential for a conflict of interest does exist.

Multiple Interests or Roles
An individual faculty or staff member may simultaneously become involved in consulting relationships, have equity holdings, and serve as an officer in one or more companies. Each of these relationships may well be independent of all the others and no conflict among them may exist. The independence or interdependence of such relationships may be difficult to assess, however, unless the individual fully discloses the nature and extent of the relationships.
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Disclosure

All parties participating in relationships involving university employees and non-university entities should be fully aware of the nature of those relationships if a potential for conflict exists. It is the responsibility of the individual who has entered into potentially conflicting relationships to disclose to his or her department chair or immediate supervisor the nature and degree of such relationships. Two avenues for disclosure are available:

  1. On a Gold Sheet
    Researchers who submit contract or grant proposal forms (Gold Sheets) must indicate on those forms if they believe that the proposed activity will constitute a conflict of interest. If they do so indicate, they must inform department chairs or other immediate supervisors of the details of the potential conflict. Disclosure is automatically required if the ISU employee has an equity interest or a management role in a company supporting research.
  2. Directly to a Department Chair/Supervisor
    If a faculty or staff member enters into an agreement to provide services such as consulting with non-university entities that do not normally require a Gold Sheet, any necessary disclosures should be made directly to the department chair/immediate supervisor. Disclosure is automatically required if the ISU employee has an equity interest or a management role in a company involved in the consulting activity.

Form of the Disclosure
A faculty or staff member may use the forms or write a memo addressed to the department chair or immediate supervisor, defining the nature and extent of any relationships and identifying the entities with which the relationships exist. Documentation such as a contract, letter, or other communication that specifies the nature and extent of the university employee's obligation and duties may be included as part of the disclosure.

Timing of the Disclosure
Disclosures should be made as early as possible to enable those reviewing them to consider what action, if any, needs to be taken regarding any potential conflicts of interest. At the latest, a disclosure statement should accompany the submission of a contract or grant proposal when it is submitted to a department chair for his or her approval.
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Review of Disclosures

Departmental Level

A department chair is responsible for reviewing any disclosures made. If, in his or her opinion, no potential or actual conflict of interest exists, further review is unnecessary. Where a potential or actual conflict exists, the department chair must decide if it is serious enough to require intervention or mediation. A department chair may choose to rely on the advice of a departmental ad hoc peer review committee to assist in the evaluation. Information contained in a disclosure statement accompanying a proposal shall remain confidential. If a contract or grant is awarded, however, any relevant disclosures shall be made public and the contracting or granting entity be informed. For employees not affiliated with an academic department, the immediate supervisor serves in place of a department chair as the reviewer of disclosures

College Level

If a department chair is unable or unwilling to deal with the actual or potential conflicts of interest that a disclosure reveals, he or she should forward the disclosure to the appropriate college dean for review. As in the case of departmental review, if a dean believes that no conflict of interest exists, further review is unnecessary. Where a potential or actual conflict exists, the dean should decide if it is serious enough to require intervention or mediation. A dean may choose to rely on the advice of a college-constituted committee in reviewing disclosures. For employees not affiliated with an academic department, the immediate supervisor may forward disclosures to the administrator to whom he or she reports.

University Level

If a dean or other administrator is unable or unwilling to deal with the actual or potential conflicts of interest that a disclosure reveals, then he or she should forward the disclosure to the executive vice president and provost (EVPP) for review. The EVPP will seek advice from a university committee constituted for that purpose to determine whether a conflict of interest exists and is serious enough to require intervention or mediation. For employees not affiliated with an academic unit, the vice president to whom their unit ultimately reports, rather than the EVPP, is responsible for review at this level.

If a conflict is deemed to be unavoidable or unmanageable, the university Office of Sponsored Programs Administration will notify the potential funding agency of the problem.

Appeal

If a faculty or staff member disagrees with a decision made at the departmental or college level, he or she can request that the disclosure be referred for review to the higher administrative level as described above.
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Special Cases

When the university engages in activities with university-employee-owned companies, a potential conflict of interest is possible in these relationships. Board of Regents' policy requires prior approval from the Regents before the university can make purchases from a company owned by an employee or an employee's immediate family. Oversight of research relationships with such companies comes under the Conflict of Interest Policy and requires special considerations.

The university encourages interested employees to engage in entrepreneurial activities as a way of contributing to the economic development of Iowa. Occasionally, an employee-owned company will wish to establish a research relationship with the university and its employees. The university is willing to work with such companies on the same basis as work done with companies not owned by university employees. To ensure that such relationships do not harm either the university or its employees, special oversight is required.

Research relationships with ISU employee-owned companies usually take one of three forms:

  1. University research is sponsored by the company.
    An administrator at or above the level of dean establishes a committee of technically knowledgeable but disinterested faculty or staff. The committee will oversee the integrity of the research and assure the university that the work being done is that to which the university agreed.
  2. The company, in exchange for a fee, uses university facilities and/or equipment.
    Appropriate fees must be established by the department (unit) chair responsible for the facility and/or equipment and must be approved by the vice president for Business and Finance. Fees should be reasonable and in line with those charged for use by companies not involving ISU employees. A record of amount of use shall be maintained.
  3. The company employs individuals who are simultaneously university graduate students.
    The Program of Study committee and/or a committee named to oversee research shall be notified of the potential conflict and the student's work for the dissertation or thesis shall be monitored to assure that the quality of the student's research and graduate experience is not compromised by the connection to the company. Generally, it is inadvisable for the student's advisor to be the student's employer or supervisor in the employee-owned company, but exceptions can be sought from the department chair.
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Remedies

At any point in the process of reviewing disclosures, a department chair, dean, EVPP, or relevant nonacademic supervisor may conclude that remedial steps should be taken to protect the interests of all parties involved and to limit the negative impact of any unavoidable conflicts of interest. Such remedies may include, but are not restricted to:

  • An agreement signed by all interested parties that none of them perceive a conflict to exist.
  • Public disclosure by the university employee of the conflicting interests. For example, a journal article or public presentation should include a statement disclosing information about any financial support, consulting fees or other payments from any company that sponsored or supported the research described or that might benefit from the results of that research.
  • An agreement by the university employee (a) to withdraw from any existing consulting or management relationship that appears to conflict with a new relationship or (b) to sell or otherwise dispose of any equity interest in conflicting enterprises.
  • The negotiation of a suitable leave of absence, reduction of appointment, or other arrangements with the university that will reduce or eliminate the conflict of interest as it relates to a particular employee.
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Sanctions

As noted above, disclosure is the responsibility of the faculty or staff member who becomes involved in activities that may be in conflict. Failure to disclose those relationships is a serious matter that may, in certain instances, be considered an act of academic misconduct. Consequently, an allegation of a failure to fully disclose a potential conflict of interest should be brought to the attention of the university's Office for Responsible Research (ORR). The ORA will handle the matter in accordance with the Iowa State University policies and procedures on academic misconduct investigations. Employees who are not faculty members may be subject to Professional and Scientific conduct policies.

Implementation for Special Cases

See Special Cases section above.

If a faculty or staff member discloses a situation that may qualify as a special case as outlined within the Conflict of Interest policy, a meeting must be held with appropriate administrators to discuss the existing relationship, future plans, and the need for possible oversight of activities. At the end of the meeting, an official record is established that provides details of the decisions reached about management of potential conflicts of interest.

These meetings include:

  • The faculty or staff member's immediate supervisor, department chair and academic dean or appointed representative,
  • The director of the Office of Intellectual Property and Technology Transfer (if intellectual property is involved),
  • The Vice President for Research and Economic Development, and
  • Representatives of other offices that may be involved in the project, such as the Center for Advanced Technology Development or the Institute of Physical Research and Technology.

Any questions related to the Conflicts of Interest policy should be directed to the Office of the Vice President for Research and Economic Development. (For information regarding conflict of interest that arises when the university makes purchases from ISU employee-related companies, see the policy on Conflict of Interest Vendors/Employees, Procurement.)
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Resources

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