1. Conflicts of Interest in the Academy: Recognition and Management Dave Broome Senior Associate General Counsel NC State University 20 March 2002

2. 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?

3. 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

4. Conflict of Commitment Defined When pursuit of outside activities involves an inordinate investment of time that interferes with one’s obligations to University responsibilities

5. Managing Conflicts of Commitment External Activity for Pay (Consulting) Review “Time” related Generally more easily dealt with

6. Conflict 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

7. FEDERAL REQUIREMENTS National Science Foundation Public Health Service Both require recipients of federal research $$ to have policies and require reporting of financial conflicts of interest.

8. Managing Conflicts of Interest Annual Report of Activities (all faculty and EPA Professionals) Immediate updates as circumstances change Department Head and Dean decisions Guidance: –UNC OP Policy –NCSU Implementation

9. UNC 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.

10. UNC 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.

11. UNC 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.

12. NCSU IMPLEMENTATION Questionnaire “Yes” answers trigger use of appendices with more detailed questions. Full disclosure gives “coverage.”

13. NC Gen. Stat. 14-234 Statutory Conflict of Interest Rewritten in last session Violation is a misdemeanor, and A contract made in contravention of the statute is void.

14. 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

15. 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.

16. ONCE IDENTIFIED, THEN WHAT? REDUCE MANAGE ELIMINATE

17. TYPICAL METHODS TO REDUCE OR MANAGE CONFLICTS 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)

18. MORE METHODS TO REDUCE AND MANAGE CONFLICTS OF INTEREST Letter to Students/Trainees explaining the conflict Management of Equity Burden is on the conflicted employee to satisfy administrators

19. CASE STUDIES SEE HANDOUTS

20. More Information http://www.ncsu.edu/sparcs/policy/policies.html Contains UNC Policy and NCSU Implementation

21. Summary 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? Please fill out evaluation form. Call or email me with additional questions.