REG 01.25.01 - Conflicts of Interest and Conflicts of Commitment
History: First Issued: April 16, 1993. Last Revised: February 18, 2010.
UNC Policy Manual 300.2.2 - Conflicts of Interest and Commitment Affecting Faculty and Non-Faculty EHRA Employees
UNC Policy Manual 300.2.2.1[R] - External Professional Activities for Pay by Faculty and Non-Faculty EHRA Employees
UNC Policy Manual 300.2.2.2 - Regulations for Senior Academic and Administrative Officers on External Professional Activities for Pay and Honoraria
UNC Policy Manual 500.6 - Equity Acquisition Policy
Guidelines for Conflicts of Interest in Research involving Human Subjects
UNC Policy Manual, 500.1 - University Research Relations with Private Enterprise and Publication of Research Findings
UNC Policy Manual, 500.2 - Patent and Copyright Policies
NCSU POL10.00.01 - Patent and Tangible Research Policy
Notice of Intent to Engage in Professional Activities for Pay
Conflicts of Interest (COI)
UNC-General Administration's - Guidelines Concerning Use of University of North Carolina Resources for Political Campaign Activities
Contact Info: Associate Vice Chancellor for Research Administration (919-515-2444)
1.1 This Policy is promulgated for the purpose of implementing the Board of Governors' (BOG) Policy on Conflicts of Interest and Commitment Affecting Faculty and Non-Faculty EHRA Employees and federal law and regulations applicable to all NC State employees or any individuals involved in the design, conduct or reporting of research at NC State.
1.2 The BOG Policy states that the primary responsibilities of Faculty and Non-Faculty EHRA Employees are teaching, scholarly research and publication, and professional service to the institution. The Policy also recognizes the importance of application of knowledge outside the institution and that this function may be enhanced by appropriate relationships between employees and private entities.
1.3 NC State employees are encouraged to engage in financially and professionally rewarding external activities, with the condition that conflicts or potential conflicts of interest and commitment be avoided, resolved or managed in a manner that ensures objectivity and meets the institution's responsibilities to external funding agencies and to the State of North Carolina.
1.4 When University research is funded by an external sponsor, including a federal government agency, such as the Public Health Service (PHS) or the National Science Foundation (NSF), a conflicts of interest disclosure is required prior to the submission of the research proposal to the agency and any conflict must be eliminated or managed prior to the disbursement of federal funds.
2. Applicability of the Regulation
2.1 This Regulation applies to all EHRA Employees (defined to include Faculty and Non-Faculty EHRA Employees).
2.2 The Regulation also applies to any individual, regardless of employment type or status, involved in federally funded research including the design, conduct or reporting of such research. A selective sampling of individuals anticipated to be subject to the regulation under this section include State Human Resources Act (SHRA) employees, students, visiting scientists or scholars, or trainees.
3. Responsibility for Compliance
3.1 The responsibility for compliance with the law, policy, and regulations on conflict of interest and commitment resides with the individual Faculty member or employee.
3.2 In the case of research, the Principal Investigator on a project is responsible for ensuring that any potential conflict of any member of the research team is reported and managed as required by this Regulation.
3.3 The review and oversight responsibility is that of the Dean of the employee's College. In the case of employees who hold administrative positions, Department Heads will report to their Deans, Deans and Vice Provosts will report to the Provost, directors will report to the appropriate senior administrator (depending on who has primary responsibility for supervision of the director), and Vice Chancellors and the Provost will report to the Chancellor.
4.1 Conflict of commitment relates to an individual's distribution of effort between obligations to his or her University employment and participation in activities outside of University employment. The latter may include such generally encouraged extensions of professional expertise as professional consulting. A conflict of commitment occurs when the pursuit of such outside activities involves an investment of time that interferes with the employee's duties and responsibilities.
4.2 Conflict of interest relates to situations in which financial or other personal considerations may compromise, may involve the potential for compromising, or may have the appearance of compromising an employee's objectivity in meeting University duties or responsibilities.
4.3 External professional activities for pay means any activity that 1) is not included within one's University employment responsibilities; 2) is performed for any entity, public or private, other than the University employer; 3) is undertaken for compensation, including an equity interest in an external entity; and 4) is based upon the professional knowledge, experience and abilities of the EHRA employee for which that employee is employed by the University. Activities for pay not involving such professional knowledge, experience and abilities are not subject to the advance disclosure and approval requirements of this Policy, although they are subject to the basic requirement that outside activities of any type not result in neglect of primary University duties, conflicts of commitment or interest, inappropriate uses of the University name or resources, or claims of University responsibility for the activity.
4.4 University employment responsibilities consist of the Realms of Responsibility promulgated in the Academic Tenure Policy, 05.20.1 and as further described, especially for EHRA professional employees, in an individual's job description or appointment letter.
4.5 Unit head refers to the person with supervisory responsibility for the employee, whether in an academic or non-academic department or administrative unit.
4.6 Inappropriate use or exploitation of University resources means the un-reimbursed use, for other than University employment responsibilities, of facilities, equipment, supplies or personnel which members of the general public may not freely use, unless such use is expressly authorized by state law, or by UNC or NC State University policy or regulation.
4.7 Significant financial interest throughout this policy shall have the same meaning as set forth in section 8 below, applicable to federally funded research.
5. Conflicts of Commitment
5.1 Prohibited Activities
External professional activities for pay, such as consulting or participation in a private business endeavor, involving time commitments that would interfere with an EHRA employee's accomplishing his or her university duties and responsibilities are unacceptable outside activities. Conflicts of commitment may also arise in connection with non-compensated activities. If an EHRA Employee's obligations to the University to teach, conduct research, or mentor students are not met due to time spent on an outside activity, a conflict of commitment exists notwithstanding that the employee may receive no economic benefit from the outside activity. The issue, in each case, is whether the employee is meeting his or her university employment responsibilities as defined in section 4.4.
5.2 Monitoring Conflict of Commitment
Although full-time faculty and other EHRA employment is not amenable to precise, time-clock analysis and monitoring, administrators at the department and school levels are charged with the evaluation of the work of employees under their supervision. The formal occasions for determining whether an individual is devoting sufficient time and energy to University employment include:
5.2.1 regular reviews of performance;
5.2.2 scheduled reviews incident to promotion, reappointment or tenure decision, or post-tenure review; and
5.2.3 review of Notices of Intent to Engage in External Professional Activity for Pay, which must be filed by the EHRA employee prior to engaging in external activities for pay. UNC 300.2.2.1[R]
Failure to meet full-time responsibilities to the University constitutes grounds under state law and the Code of the University of North Carolina for disciplinary action, up to and including discharge.
6. Conflicts of Interest
An EHRA employee has a conflict of interest when he or she, or any member of the employee's immediate family, has a personal interest in an activity that affects, or has the appearance of affecting, the objectivity of the employee's decision making with respect to the employee's university responsibilities.
6.2 Acceptable and Unacceptable Conflicts
6.2.1 Categories of Conflicts
Activities that may involve conflicts of interest can be categorized under four general headings: first, those that are allowable and do not need to be reported because, although they appear to involve such a conflict, they in fact do not; second, those that are questionable and must be reported, but that may be allowable with administrative approval; third, those that generally are not allowable because they have the potential for diminishing the public trust in the objectivity of state employees; and fourth, those that are prohibited by state law.
6.2.2 Examples of Conflicts
The examples cited below are merely illustrative and not intended to be exhaustive of all the potential conflicts of interests that may arise in the course of employment with the University. If there is any question about whether a particular activity might not be permissible or require reporting and management, employees should contact their respective Unit Heads.
126.96.36.199 Activities Allowable (No reporting required)
The examples cited below involve activities external to University employment which may appear to create a conflict, but do not have the potential for affecting the objectivity of the EHRA employee's performance of University responsibilities.
(a) An EHRA employee receiving royalties from the publication of books or as an inventor under NCSU POL10.00.01 - Patent and Tangible Research Policy.
(b) An EHRA employee having an equity interest in a corporation, the exclusive function of which is to accommodate the employee's external consulting activities.
(c) An EHRA employee receiving nominal compensation, in the form of honoraria or expense reimbursement, in connection with service to professional associations, service on review panels, presentation of scholarly works, and participation in accreditation reviews. Senior academic and administrative officers are subject to special regulations regarding honoraria and must comply with the Regulations for Senior Academic and Administrative Officers on External Professional Activities for Pay and Honoraria, UNC Policy Manual, 300.2.2.2.
It is important to note that any of the above situations might give rise to a conflict of commitment if the employee is not fulfilling his or her university employment responsibilities as defined in section 4.4.
188.8.131.52 Activities Requiring Reporting and Review
The examples cited below suggest a possibility of conflicting loyalties that can impair objectivity, but disclosure and resulting analysis of relationships may render the activity permissible, or the activity will be permissible with an appropriate plan for managing and/or monitoring the activity.
(a) An EHRA employee requiring students to purchase the textbook or related instructional materials of the employee or members of his or her immediate family, which produces compensation for the employee or family member.
(b) An EHRA employee receiving compensation or gratuities (other than occasional meals, gifts of desk copies of textbooks, and the like) from any individual or entity doing business with the University.
(c) An EHRA employee serving on the board of directors or scientific advisory board of an enterprise that provides financial support for the employee or a member of his or her immediate family to conduct University research.
(d) An EHRA employee serving in an executive position in a for-profit or not-for-profit business which conducts research or other activities in an area related to the University duties of the employee.
(e) An EHRA employee having Significant Financial Interest in a for-profit business which conducts research or other activities in an area related to the employee's University duties.
(f) An EHRA employee having a Significant Financial Interest in a company that competes with the University for corporate and/or governmental research contracts and grants.
(g) An EHRA employee participating in University research involving a technology owned by or contractually obligated to (by license or exercise of an option to license, or otherwise) a business in which the individual or a member of his or her immediate family has a consulting relationship, has a Significant Financial Interest, or holds an executive position.
184.108.40.206 Activities or Relationships Generally not Allowable
The examples cited below involve situations that are not generally permissible, because they involve potential conflicts of interest or they present obvious opportunities or inducements to favor personal interests over institutional interests. Before proceeding with such an endeavor, the EHRA employee would have to propose a management plan that overcomes the presumption of conflict by demonstrating that the apparent conflict can in fact be managed so that his/her objectivity is not affected and University interests will not be damaged.
(a) An EHRA employee accepting support for University research under conditions that require research results to be held confidential, unpublished, or inordinately delayed in publication. Research conducted by faculty or students under any form of sponsorship must maintain the University's open teaching and research philosophy and must adhere to a policy that prohibits secrecy in research. Such conditions on publication must be in compliance with UNC Policy Manual, 500.1 and 500.2.
(b) An EHRA employee serving as an expert witness for pay in litigation which requires the disclosure of research data, compromising the University or student's ability to publish.
(c) An EHRA employee assigning students, post-doctoral fellows or other trainees to University research projects sponsored by a business in which the individual or a member of his or her immediate family has a Significant Financial Interest. Students may perform research at NC State benefiting a company in which an EHRA employee holds an ownership interest only pursuant to a sponsored research agreement. In such case, students may not be assigned to the project unless they are informed in writing by their supervisor that
i. their research is conducted on behalf of the University and not the company sponsor,
ii. the students report to and take direction from their supervisor and not the company, and
iii. the students may have confidential access to a research administrator to discuss any conflict issues should they so request.
(d) A student employed by a company in which an EHRA employee has a financial interest and the employee
i. teaches a course in which the student is enrolled; or
ii. is a member of the student's thesis or dissertation committee; or
iii. is the student's advisor or the director of the student's thesis or dissertation research; or
iv. is in a position to affect the student's curricular or extra-curricular activities.
(e) An EHRA employee making referrals of business which is ordinarily performed by the University to an external enterprise in which the individual or a member of his or her immediate family has a Significant Financial Interest.
(f) An EHRA employee referring his/her students to an external business or enterprise in which the individual or a member of his or her immediate family has a Significant Financial Interest
(g) An employee consulting for a company with regard to the same subject matter for which he or she also acts as principal investigator under a research agreement sponsored by the company. This activity should not be allowed ordinarily, but there may be circumstances where it would be necessary, such as where a licensee of university intellectual property sponsors further research on the technology licensed, but also requires the services of the inventor/principal investigator to "teach" or demonstrate to licensee employees a method or use of the licensed technology. In such cases, the activity may be allowed with the appropriate management plan.
(h) Due to the high level of fiduciary duty that an officer of a corporation owes the corporation, a full-time EHRA employee should not be involved at an executive level in the management of a company that has a contract, a research or license agreement for example, with the University. In the case of a new company formed to commercialize an NC State invention, however, it may be necessary for the faculty inventor/entrepreneur to hold a management position in the new company temporarily until such time as investors are brought in and professional management retained. In that situation, the employee's management responsibilities should decrease over time and cease altogether as soon as possible. In the alternative, the employee must seek to decrease his or her University appointment commensurate with the time that will be devoted to employment duties with the company. The decision to grant such a request will be within the sole discretion of the Unit Head.
Management of an outside company may give rise to a conflict of commitment, even when the company has no contract with the University; and involvement in management must be disclosed pursuant to the NOI process and may be permitted only when the activity does not interfere with the employee's University duties.
220.127.116.11 Activities Prohibited
The following activities that have the potential for creating conflicts of interest are prohibited by North Carolina law and, therefore, may not be undertaken.
(a) North Carolina law prohibits state officers and employees involved in making or administering contracts on behalf of a state agency from deriving a direct benefit from the contract; and, even if not making or administering a contract on behalf of the state agency, if the officer or employee will derive a direct benefit from the contract, he or she may not attempt to influence any other person who is involved in making or administering the contract. N.C.G.S. 14-234(a)(1), (2).
(b) North Carolina law prohibits state employees from soliciting or receiving any gift, reward, or promise of reward in exchange for recommending, influencing, or attempting to influence the award of a contract by the state agency for which the employee works. N.C.G.S. 14-234(a)(3).
(c) A state employee may not benefit financially, or help someone else benefit, from non-public information gained by the employee in his or her official capacity. N.C.G.S. 14-234.1
7.1 External Professional Activities for Pay
External professional activities for pay require advance reporting and administrative approval pursuant to Board of Governors' Regulations on External Professional Activities for Pay by Faculty and Non-Faculty EHRA Employees. UNC Policy Manual, 300.2.2.1 An EHRA Employee who wishes to engage in external professional activity for pay must adhere to these regulations to provide satisfactory assurances that such activity will not interfere with University employment obligations. These regulations may not apply to EHRA employees serving on academic year (9 month defined as August 16 through May 15) contracts, if the external professional activity for pay is wholly performed and completed outside of the academic year and the activity does not conflict with the policy statements of NC State or Board of Governors and is not conducted concurrently with a contract service period for teaching, research, or other services to the institution during a summer session.
Unless exempt from the disclosure requirement as set forth in 7.1, NC State EHRA Employees must report any external professional activity for pay at least ten (10) days in advance of commencing such activity. Reporting is accomplished by completing the Notice of Intent to Engage in Professional Activities for Pay.
7.1.2 Notice of Intent and Conflict of Interest
When the proposed external activity would appear to create a conflict of interest, administrative approval will require the development of a conflict of interest management plan. Examples of circumstances surrounding an External Professional Activity for Pay that requires the concurrent update of a Conflict of Interest management plan as outlined in 7.2 of this regulation include:
18.104.22.168 earning more than $10,000 in any given 12 month period of time from any single external entity for which an employee conducts external professional activities for pay; or
22.214.171.124 hiring, employing, or otherwise supervising employees in the external capacity who are also supervised by the disclosing employee at the university; or
126.96.36.199 consulting with a company on the same particular matter for which the employee has provided services, such as research, testing or analytical services, on behalf of the University.
It is important to note that a disclosure or update of a Conflict of Interest form may be required even where the activity might otherwise be exempt from NOI filing because the activity occurs outside the academic year.
7.2 Conflicts of Interest
7.2.1 Annually, all EHRA Employees are required to file a disclosure by completing the on-line disclosure form for Conflicts of Interest (COI).
7.2.2 The COI form must be updated at the time of submitting any proposal for external funding, under the circumstances described in 7.1, and at any time circumstances change, or new reportable events occur, requiring amendment of the form.
7.2.3 At the time of submitting any proposal for external funding of instructional, research or service activities, the employee must review his/her COI disclosure and ensure that any real or apparent conflicts of interest are managed or mitigated by a management plan, or eliminated.
7.2.4 The disclosing employee's Unit Head will review the COI disclosure and approve for submission to the Dean/Vice Chancellor. The Dean may designate in writing a responsible official at the level of Assistant or Associate Dean to act in his/her behalf in making conflicts of interest evaluations.
7.2.5 If the employee and unit head are unable to formulate or agree on a conflict management plan, they will engage the Dean/Vice Chancellor or the Dean's/Vice Chancellor's designated official, who will develop a plan and or resolve any dispute.
7.2.6 In the event that an affected employee does not agree with the Dean's decision regarding conflicts of interest management, the employee may appeal the decision to the Vice-Chancellor for Research, whose decision will be final. The Vice-Chancellor for Research shall receive advice from a Conflicts of Interest Committee annually appointed by the Vice Chancellor for Research and Innovation to review and make recommendations for management, mitigation, or elimination of the conflict of interest.
7.2.7 The Vice Chancellor for Research and Innovation will appoint a standing Conflicts of Interest Committee, which will be comprised of the Associate Vice Chancellor for Research Administration, who will serve as ex officio (non-voting) chair of the committee; at least three tenured faculty who have active research programs or expertise in the field of research ethics; one non-Faculty EHRA employee, and one additional member to be added on an ad hoc basis who shall be from the unit of the employee whose conflict is under review. This ad hoc member shall be either the Associate Dean for Research of the relevant College, or an equivalent ranking administrator if there is no Associate Dean for Research. The Committee will serve in an advisory capacity to the Vice Chancellor for Research. When requested to do so by a Dean or the Vice Chancellor for Research, the Committee will make recommendations for management, mitigation, or elimination of the conflict of interest.
8. Federal Conflicts of Interest Compliance
8.1 In addition to the procedures for reporting external activities for pay and general conflicts of interest and commitment set forth in this regulation, federal funding agencies require that the University manage, reduce, or eliminate any actual or potential conflicts of interest that may exist in relation to instruction, research, and service activities funded by the federal government. The primary purpose of the federal regulations is to prevent bias in the design, conduct, and reporting of federally funded research. This regulation is designed to address those concerns and to comply with the National Science Foundation's and the U.S. Department of Health and Human Services' Objectivity in Research policies.
8.2 It is the policy of NC State to comply with the rules applicable to federally funded projects for all externally funded research conducted at NC State.
8.3 Any investigator submitting a grant or contract proposal for external funding through the University, or conducting research or other activities pursuant to such a federal grant or contract, must report any "Significant Financial Interest" that would reasonably appear to affect the proposed or funded research activities. Under the federal regulations, if a Significant Financial Interest may directly and significantly affect the design, conduct, or reporting of the research, a conflict will be deemed to exist.
8.4 An "investigator" is defined as the principal investigator, co-principal investigator, or any other individual responsible for the design, conduct, or reporting of the proposed or funded research activities.
8.5 A "Significant Financial Interest" refers to: salary or other payments for services such as consulting fees or honoraria; equity, interests, such as stock and stock options; and intellectual property rights, such as patents, copyrights, and royalties from such rights, that
8.5.1 In the case of salary, royalties (including those distributed to the individual through the University), or other payments, including consulting fees or honoraria, when aggregated from a single entity for the employee and his or her family, are expected to exceed $10,000 over the next twelve months; or
8.5.2 In the case of equity interest in publicly-traded entities, when aggregated for the employee and his or her family, meets either of the following tests: exceeds $10,000 in value as determined through reference to public prices or other reasonable measures of fair market value or represents more than a (5%) ownership interest in any single entity; or
8.5.3 In the case of entities that are not publicly traded, consists of any equity interest held by the employee or his or her family.
8.5.4 When the project or proposed project requires the use of human subjects and approval from the Institutional Review Board, these minimum remuneration and equity thresholds do not apply. In such cases, the disclosure threshold is any amount of payment and any equity holding by the employee or his or her family.
8.6 The term "family" of the employee includes his or her spouse and dependent children.
8.7 Significant Financial Interests must be disclosed by the employee annually and at the time of the submission of a research proposal in accordance with procedures set forth in section 7 above. The Office of Sponsored Programs will not submit a proposal to a funding agency if it does not have on file a Conflict of Interest Disclosure form. The Investigator's Disclosure Statement must be updated annually during an award period and at any time new Significant Financial Interests arise.
8.8 NC State will not execute award documents or allow expenditures of research or service funds from external sponsors if the employee's Conflict of Interest Disclosure form required by this regulation is not completed or if the Department's review and resolution of any conflicts is not yet completed and approved.
8.9 Conflicts which cannot be satisfactorily managed, reduced, or eliminated will be disclosed to the sponsoring federal agency.
8.10 Human Subjects Research
Absent "compelling circumstances", an employee who has a Significant Financial Interest in a company sponsoring human subjects research may not conduct such research.
9. Enforcement and Sanctions
The Vice Chancellor for Research and Innovation is responsible for overseeing the implementation of this regulation. In addition to the potential loss of ability to file research proposals, possible sanctions for violation of this regulation may include administrative actions including, but not limited to, revocation of certain rights and privileges of employment, reprimand, or termination of employment, in accordance with University policies.