Conflicts of Interest in the Conflicts of Interest in the Academy: Recognition and Academy: Recognition and ManagementManagement

Dave BroomeSenior Associate General Counsel

NC State University

20 March 2002

Introduction Introduction

What are Conflicts of Interest and Conflicts of Commitment?

Why is the university concerned?What is the process for identifying them?Once identified, how handle? Consequences if not handled properly?

Overview Overview

Conflicts of Interest in the academic community concern:– Government (State and Federal)– Press – Publishers– Peers– Public

How these conflicts are managed determines perception of integrity

Conflict of Commitment Conflict of Commitment DefinedDefinedWhen pursuit of outside activities involves

an inordinate investment of time that interferes with one’s obligations to University responsibilities

Managing Conflicts of Managing Conflicts of CommitmentCommitment

External Activity for Pay (Consulting) Review

“Time” related

Generally more easily dealt with

Conflict of Interest DefinedConflict of Interest Defined

Financial or other considerations that may compromise (or have the appearance of compromising) one’s objectivity or independent professional judgment in meeting university duties or responsibilities

FEDERAL REQUIREMENTSFEDERAL REQUIREMENTS

National Science Foundation

Public Health Service

Both require recipients of federal research $$ to have policies and require reporting of financial conflicts of interest.

Managing Conflicts of InterestManaging Conflicts of Interest

Annual Report of Activities (all faculty and EPA Professionals)

Immediate updates as circumstances changeDepartment Head and Dean decisionsGuidance:

– UNC OP Policy– NCSU Implementation

UNC OP CATEGORIESUNC OP CATEGORIES

Allowable, with no reporting required – Receiving royalties from copyrighted works or

patented inventions under UNC Patent and Copyright Policies

– Ownership of a corporation, if its function is to accommodate the employee's consulting activities.

– Receiving nominal compensation (e.g., honoraria or expense reimbursement) for service to professional associations, on review panels, presentation of scholarly works, etc.

UNC OP CATEGORIESUNC OP CATEGORIES Require disclosure but generally manageable

– Serving on the board or scientific advisory board of an enterprise that provides financial support for university research, where the employee receives the support.

– Serving in an executive position or having ownership in a business that conducts research or other activities in an area related to the employee’s university duties.

– Having a financial interest in a business that competes with services provided by the university.

UNC OP CATEGORIESUNC OP CATEGORIES Require disclosure and presumptively not allowed

– Participating in research involving a technology owned by or licensed to a business in which the individual or an immediate family member has a consulting or ownership relationship, or holds an executive position.

– Participating in or assigning students, post-docs, etc. to research projects funded by a business in which the individual or an immediate family member has an ownership interest.

NCSU IMPLEMENTATIONNCSU IMPLEMENTATION

Questionnaire

“Yes” answers trigger use of appendices with more detailed questions.

Full disclosure gives “coverage.”

NC Gen. Stat. 14-234NC Gen. Stat. 14-234

Statutory Conflict of InterestRewritten in last sessionViolation is a misdemeanor, andA contract made in contravention of the

statute is void.

NC Gen. Stat. 14-234 (Cont.)NC Gen. Stat. 14-234 (Cont.)

“No …employee who is involved in making or administering a contract on behalf of a public agency may derive a direct benefit from the contract.”

“Administers” = oversees performance, or make decisions about the contract.

“Direct Benefit” = >10% ownership in other party, or derives income directly

NC Gen. Stat. 14-234 (Cont.)NC Gen. Stat. 14-234 (Cont.)

Even if not involved in “making or administering” the contract, it’s illegal for one getting direct benefit to “attempt to influence” any other person who is involved in making or administering the contract.

ONCE IDENTIFIED, THEN WHAT?ONCE IDENTIFIED, THEN WHAT?

REDUCE

MANAGE

ELIMINATE

TYPICAL METHODS TO TYPICAL METHODS TO REDUCE OR MANAGE REDUCE OR MANAGE

CONFLICTS OF INTERESTCONFLICTS OF INTEREST Full disclosure; Perhaps intrusive, but also

protective (personnel record = confidential) Use a different Principal Investigator Ad Hoc Committee to insulate the employee

with conflict (e.g., project management/publication oversight)

MORE METHODS TO REDUCE MORE METHODS TO REDUCE AND MANAGE CONFLICTS OF AND MANAGE CONFLICTS OF

INTERESTINTEREST Letter to Students/Trainees explaining the

conflict

Management of Equity

Burden is on the conflicted employee to satisfy administrators

CASE STUDIESCASE STUDIES

SEE HANDOUTS

More InformationMore Information

http://www.ncsu.edu/sparcs/policy/policies.html

Contains UNC Policy and NCSU Implementation

SummarySummary

Lessons Learned: – What are conflicts of interest and commitment?– Why is it important to identify and manage them?– How are they disclosed and handled at NCSU?

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