Conflict of Financial Interest Policy for Employees

[Faculty Handbook Category #3]

Relationships between higher education institutions and government, nonprofit, and business sectors have increased greatly over the past several decades. St. Olaf College recognizes that many such relationships benefit the College’s mission and its students. At the same time, the College strives to vigilantly guard against both actual and perceived abuses of these relationships. As professionals, those engaged in relationships with external entities have a responsibility to ensure that those relationships do not create any actual or perceived conflicts of interest, and to fully disclose all relevant information about potential conflicts of interest.

Policy Statement. It is the policy of St. Olaf College that all employees who make decisions that influence the financial actions of the College or its students must do so in accordance with the highest professional and ethical standards. In order to preserve the integrity and reputation of the College, such an employee is expected to avoid giving an unfair advantage—or even the appearance of an unfair advantage—to any person or organization (a “Vendor”) doing business with the College or its students. To comply with this policy, an employee must be aware of and seek to avoid any situation where the employee’s personal interests conflict with the interests of the College and/or the students it serves, and where the College’s interests conflict with the purchasing interests of its students. It is particularly important for an employee to avoid conflicts of interest when the employee is in a position to:
1. enter into contracts on behalf of the College; or
2. influence purchasing decisions made on behalf of the College; or
3. influence the purchasing decisions of students at the College.
An employee who is in a position to do any of the above is referred to in this policy as a “Responsible Person.”
Procedure When a Conflict of Interest Arises. The College cannot guard against a Vendor’s improper influence over the actions of a Responsible Person unless the College is aware of potential conflicts of interest. Therefore, any employee of the College who becomes aware that a conflict of interest may exist, regardless of whether the Responsible Person is himself or herself, or another, must disclose to his or her immediate supervisor and the Vice President and Treasurer that an employee’s relationship with a Vendor may produce a conflict of interest. The supervisor and the Vice President and Treasurer will assist in determining whether there is a conflict of interest, and if there is, will determine the course of action necessary to protect the interests of the College and/or its students.
If a Responsible Person is uncertain about whether a relationship with a Vendor could create an actual or apparent conflict of interest, he or she should always err on the side of disclosure so that the College is aware of the situation. However, a Responsible Person is not required to disclose a relationship with a Vendor if he or she is certain that no actual conflict exists and that no reasonable person would perceive that a conflict exists.
Areas in Which a Conflict of Interest May Arise. A conflict of interest may arise when a Vendor has, or could reasonably be believed to have, improper influence over the actions or judgment of a Responsible Person.
Examples of Vendors – A Responsible Person should be especially alert to conflicts of interest that may arise in the Responsible Person’s relations with:
1. Vendors that supply goods and services to the College, or to students of the College in connection with their attendance at the College;
2. Vendors from whom the College leases property, equipment or real estate; or from whom its students lease property, equipment or real estate in connection with their attendance at the College;
3. Vendors of student loans or other financial aid, or representatives of such Vendors, with whom the College is dealing or planning to deal.
Examples of Relationships That May Produce a Conflict – A Vendor’s influence, or apparent influence, over a Responsible Person is most likely to result from either a personal or a financial relationship between the Responsible Person and the Vendor with whom the Responsible Person deals. A Vendor’s influence or apparent influence over a Responsible Person also can result from offers made by the Vendor to finance trips, travel, seminars, educational materials, or the like, that may in fact benefit the College or its students, but that also may be perceived as providing personal benefit to the Responsible Person or inappropriate benefit to the College. The following relationships commonly produce a conflict of interest:
1. A Responsible Person, or a family member of the Responsible Person, has an investment or ownership interest in the Vendor.
2. A Responsible Person, or a family member of the Responsible Person, has a compensation arrangement with the Vendor. A compensation arrangement specifically includes any payment to a Responsible Person from a Vendor in return for service on an advisory board or advisory panel related to the Vendor’s business.
3. A Responsible Person, or a family member of the Responsible Person, is an officer, director, or employee with substantial influence over the actions of the Vendor.
4. A Responsible Person, or a family member of the Responsible Person, has received a gift or favor of more than nominal value (in excess of $25) from a Vendor.
5. A Vendor has paid for, or reimbursed a Responsible Person for, goods or services of more than a nominal value, even if those goods or services assists the Responsible Person in carrying out his or her duties for the College, or lodging, meals, travel, or tuition in connection with a conference, travel abroad scouting trip, or training seminar.
6. A Vendor who offers services or goods to the College’s students in connection with their attendance at the College has provided a financial or other benefit to the College for which the College has not paid a fair market value price.
7. A Responsible Person, who is a faculty member, assigns a textbook that he or she has written and for which he or she receives a royalty payment from the publisher for each textbook sold. (The College recognizes that in almost all cases, such assignments are made for appropriate academic reasons. This policy is not intended to deter or prohibit faculty from assigning books or articles that they have written; it merely requires that such situations be disclosed so that the College is aware of them.)
Examples Where No Conflict Exists – Examples of situations where no actual or perceived conflict exists include:
1. The Responsible Person selects a vendor and it so happens that, unbeknownst to the Responsible Person, the stock of the vendor is among dozens of stocks that are selected by and held in a large mutual fund in which the Responsible Person owns shares.
2. The Responsible Person, who is a faculty member, receives no personal, financial, or business benefit from assigning a particular textbook that happens to be published by the same publisher that published a different book written by the Responsible Person.
3. A Responsible Person, or a family member of the Responsible Person, has received a gift or favor of nominal value (less than $25) from a Vendor.
Violations of the Conflicts of Interest Policy. A Responsible Person who fails to disclose a relationship required to be disclosed under this policy is subject to discipline up to and including termination or dismissal. Other employees who fail to make such disclosures also may be subject to discipline or termination or dismissal.