The UNC Policy Manual
200.1
Adopted 05/11/84 Amended 06/09/89 Amended 09/08/89 Amended 05/11/91
Amended 06/08/01 Amended 11/09/07 Amended 09/18/09 Amended 12/15/17
Technical Corrections 04/25/19
Amended 04/20/23
Amended 01/25/24
Dual
Memberships
and
Conflicts
of
Interest
The Board of Governors seeks at all times to be fair and impartial in carrying out its responsibilities and tries to avoid even
the appearance of partiality or undue influence. To promote this objective the following
guidelines are adopted as board policy and recommended to the members for their
guidance:
1.
Service on Foundation Boards or Boards
of Visitors of Constituent Institutions
Members of the Board of Governors may, from time to time, be asked to serve simultaneously on a foundation board or a board of visitors or some similar
board for one of the 16 constituent institutions. No matter how conscientious or successful a
member may be in maintaining impartiality among constituent institutions,
service on such a board will undoubtedly be construed by some as showing
favoritism. It is also felt that some
institutions will feel pressure to name members of the Board of Governors to
such boards if service on them becomes commonplace. For these reasons members of the Board
of Governors are encouraged to decline any such service.
2.
Service on Boards
of Private Colleges
and Universities
Members of the Board of Governors may be asked to serve simultaneously
on the board of a private college or university in North Carolina. While such an invitation is always an
honor, there are potential areas of conflict in such dual memberships. A member should
satisfy himself or herself that dual
service will not interfere with his or her obligations either to the University
of North Carolina or to the private institution.
3.
Inquiries Concerning Admissions and Job Openings
From time to time a member of the Board of Governors may wish to
inquire, either directly or through an officer of the University, about a job
opening in the University or about the admission of an individual to an
institution or to a program. Sometimes
a Board member is asked to write a letter of recommendation on behalf of a candidate for a job or for admission. It is highly
inappropriate to use one's
position on the Board of Governors in an attempt to
influence employment or admissions. It is not inappropriate, however, for a
member to make inquiries or to write letters of recommendation on the member's personal
or business stationery. It should always
be clear that the Board member is not seeking a favor and understands that the
decision in all cases will be made strictly on the merits.
4.
Appointments by the Board of Governors
In order to avoid any appearance of undue influence, the Board of Governors will not consider
for
membership on
any board to which it makes appointments any person who is a spouse of a Board
of Governors member, a brother or a sister or a lineal ancestor or descendant
of a member, or the spouse of any such person.
This policy shall not apply, however, to any person who may have been
elected or appointed to any such board prior to the time the related person
became a member of the Board of Governors. Nor shall the policy
apply to any person who may already
be serving on any such board at the
time of the adoption of the policy. The
boards to which this policy shall apply include the boards of trustees of the
constituent institutions and all boards to which the Board of Governors make appointments.
5.
Inappropriate Advantage Derived
from Board Membership
a.
Purpose. It is of critical importance that decisions made on behalf
of the University by its governors, trustees, chief executive
officers, and chief finance officers be in the best interest of the University
and not be influenced by any potential financial gain to the decision-makers.
Furthermore, to assure
public confidence in the integrity of the University, it is important that the University
not appear to be influenced by the personal financial interests of those in
decision- making positions. The purpose of this policy is assure public
confidence in the integrity of the University by preventing members of the
governing boards and chief executive and finance officers of the University
from using their positions, or appearing to use their positions, to influence
the decisions of the University for their personal financial gain while at the
same time allowing the University to take advantage of contracts that are
advantageous to the citizens of North Carolina and to the University and also
avoiding having service to the University be so restrictive that persons with
substantial financial interests will be reluctant to serve.
b.
Definitions
As used in this policy, the following terms have the following meanings:
i.
"Business
entity" means a “business†as defined in G.S.
138A-3(5)1 or a not for profit
corporation.
ii.
"Person" means a member
of the Board of Governors or of a board of trustees of a constituent institution, the vice president for finance, a chancellor, or the chief
finance officer of a constituent institution.
iii.
"Substantial interest" means any of the following:
1.
A “business with which associated†as that term is
defined in G.S. 138A-3(7),2 except that
ownership of more than $10,000 in a publicly traded corporation by itself is
not a substantial interest; or
2.
A “nonprofit corporation or organization with which
associated†as that term is defined in G.S 138A-3(54),3 except
that uncompensated service as a director, officer, or trustee of a not for profit corporation is not a substantial interest.
iv.
"The University" as applied to members of the Board
of Governors, the president,
and the vice president for finance means the University of North Carolina
System Office (UNC System Office) or any of the constituent institutions. The
University as applied to members of the boards of trustees, a chancellor, or a chief
finance officer of a constituent
institution means the constituent
institution on whose board of
trustees the member serves or at
which the chancellor or chief finance officer is employed.
c.
Requirements
i.
Each person must contemporaneously submit to the
vice president of finance, each Statement of Economic Interests that the person
files with the State Ethics Commission pursuant to G.S. 138A-22.
These disclosure statements are public records.
ii.
Whenever a person has actual knowledge that a
business entity in which the person has a substantial interest is attempting or
planning to enter, is entering, or has entered into a contract with the
University, the person must report the nature of the person's substantial interest and the nature of the contract
to the chief finance officer of the institution that is or would be a
party to the contract. If the person is a chief finance officer, then the chief
finance officer must make this report to the chancellor or to the president of
the institution that is or would be a party to the contract. Reports required
by this paragraph shall be in writing
and will be public records
retained by the respective
chief finance officers.
iii.
The University will not enter
into a contract with a value of $10,000 or more, or with expected
payments of $10,000 or more per year, with a business entity in which a person has a substantial interest, unless one of the exceptions in paragraph c.iv., applies. A person will not in any way:
1.
Participate in making
a contract;
2.
Attempt to cause or influence
the University to make a contract; or
3.
Attempt to influence the contract specifications or
contracting process concerning a contract between a business entity in which
the person has a substantial interest and the University.
The vice president for finance and the respective chief finance officers
of the constituent institutions are responsible for determining whether the
University is entering into a contract with a value of $10,000
or more with a business
entity in which
a person has a substantial interest.
iv.
Unless otherwise prohibited by state or
federal law, the restrictions on entering into a contract in paragraph c.iii.,
do not apply if the person with the substantial interest
does not participate in making or administering the contract and:
1.
The contract results from a competitive sealed bid or a
competitive request for proposals with specifications and criteria;
2.
The contract is for goods or services
sold or provided to the general public at a uniform price or is for goods
on state contract sold to state agencies at a uniform price, unless the
contract is prohibited by state law;
3.
The contract is an employment contract with the
dependent child or spouse of the president, the vice president for finance, a
chancellor, or chief finance officer, or the dependent
child of a member of the Board of Governors or
a board of trustees and the employment
is allowed under Section 300.4.2 of the UNC Policy Manual;
4.
The contract is with a bank or a public utility; or
5.
The committee of the Board of Governors or of the
relevant board of trustees designated pursuant to paragraph d.i.,
below, finds that the contract is in the best interest of the University. Examples of when a contract
might be in the
best interest of the University include, but are not limited to, when it has
financially advantageous terms, when the goods or services to be provided are
demonstrated to be unique, or when the contract is a continuation of a
contract that was in effect before the person with the substantial interest
became affiliated with the University.
v.
If a person is an employee or agent of a
business entity, the person shall not attempt to influence the University to enter into a contract with the
business entity that employs or retains the person.
vi.
A person shall
not attempt to influence the administration of or payments
under a contract between the University and a business entity in which
the person has a substantial interest or between the University and the
person's employer.
vii.
No person shall disclose or use confidential
information or information concerning economic development or technology
research or development which the person received in the person’s capacity
as a board member or employee
of the University for the
person's financial gain.
viii.
No person shall accept a gift or favor from a business entity,
or the principal in a
business entity, which has entered into a contract with the University within the past year,
who currently has a contract
with the University, or who intends
to attempt to enter into a contract with the University if the
person:
1.
Has or will prepare plans,
specifications, criteria or estimates for the
contract;
2.
Awards, approves, negotiates, or administers the contract; or
3.
Inspects or supervises the contract.
This paragraph does not prohibit receipt of gifts which would be
permitted under G.S. 133-32 or G.S. 138A-32.
ix.
A person shall
not represent, as attorney, agent, or trustee,
a third party who has an adverse relationship with the
University. A person shall attempt
to dissuade a firm or business
entity in which the person has a substantial interest from engaging in
representation adverse to the University.
d.
Procedures
i.
The chair of the Board of Governors and each
chair of a board of trustees shall designate
a standing committee to determine whether
a potential conflict
is a permissible or impermissible activity and to make recommended
findings to the respective board of trustees or Board of Governors
as to whether this policy has been violated.
ii.
Potential conflicts:
1.
Any person who receives a report of a potential
conflict shall forward
that report to the chief finance officer of the
institution that is or would be a
party to the contract.
2.
If the person with the substantial interest claims or
the chief finance officer believes that the contract is permissible pursuant to
paragraph c.iv.1., 2., 3., or 4., above, the determination of whether the
contract is permissible or impermissible may be made by the respective
president or chancellor, or the president or chancellor may request that the
designated committee make the determination. Any determination by the president
or a chancellor shall be in writing and shall be a public record.
3.
If the person claims that the contract is permissible
pursuant to paragraph c.iv.5., above, because the contract is in the best
interest of the University, or if a chancellor or the president refers a
conflict question to the committee, then the designated committee shall
determine whether the proposed contract is a permissible or impermissible activity
under this policy
and shall enter its determination in the minutes of its proceedings.
4.
If the person
who has the potential conflict
is a member of the designated
committee, the person shall
not participate in the deliberations of the committee,
other than to present the relevant facts to the committee, and shall abstain from voting.
iii.
Allegations of conflict
1.
If any person or any senior academic or administrative
officer (SAAO) becomes aware or alleges that a person covered by this policy
has violated this policy, the person
shall report the alleged violation
to the chancellor or President of the institution that is or
would be a party to the contract.
2.
The person who receives the allegation shall forward the allegation:
a.
To the designated committee of the board of
trustees or of the Board of Governors if the person alleged to have violated
this policy is a member of that board;
b.
To the designated committee of the Board of
Governors if the president is alleged to have violated this policy;
c.
To the president
if the person alleged to have violated
this policy is a chancellor
or the vice president for finance; or
d.
To the respective chancellor if the person is a chief finance officer of that constituent institution.
3.
If the person alleged to have violated the policy is
the President or a member of a Board of Governors or of the board of trustees, then the designated committee will determine whether or not the policy has been violated. The chairperson
of the designated committee will designate an individual to investigate the
allegations and to make a report to the committee. After considering the report
of the investigation and any response by the person alleged to have violated
the policy, the committee shall make a determination as to whether the policy has been
violated and, if so, a recommendation as to the appropriate sanction to the
respective board of trustees or Board of Governors. The board of trustees
or Board of Governors shall vote to affirm, reject,
or modify the recommendation.
4.
If the person
who has the potential conflict
is a member of the designated
committee, the person shall
not participate in the deliberations of the committee,
other than to present the
relevant facts and arguments to the committee on his own behalf,
and shall abstain from voting.
5.
A Board of Governors member, board of trustees member, or president who is alleged to have
violated this policy is entitled to receive notice of the allegation, to be
present to hear the report presented to the designated committee, and to inform
the committee of any facts or arguments that demonstrate that he or she did not
violate the policy.
6.
If the vice president for finance, a chief finance
officer or a chancellor is alleged to have violated this policy, that allegation will be investigated and acted upon in accordance with the procedures for disciplining, demoting,
dismissing, or terminating the
contract of employees of that position.
iv.
The president will present this policy annually
to the Board of Governors
and will present it to new members at the beginning
of their service.
The chancellors will present
this policy annually to their respective Boards of Trustees and will present it
to new members at the beginning of their service.
e.
Sanctions
i.
If the Board of Governors
or a board of trustees
finds that one of its members has violated this policy, the Board may
take one or more of the following actions:
1.
Reprimand or censure
the member;
2.
Remove the person from any board office the person
holds or from any committee chairmanship or assignment; and
3.
Report the violation
to the entity that appointed the member.
ii.
If the Board of Governors finds that the
president has violated this policy, the Board of Governors may discipline, demote or dismiss the president, as it deems appropriate.
iii.
If the president finds that the vice president
for finance has violated this policy, the president may discipline, demote, or
dismiss the vice president, and shall report the violation and the action taken
by the president to the Board of Governors.
iv.
If the president finds that a chancellor has violated this policy, the president may discipline the chancellor and report
the action taken to the Board of Governors and the relevant board of trustees,
or the president may recommend to the Board of Governors that the employment of the chancellor be terminated and that the chancellor be demoted
or dismissed.
v.
If a chancellor finds that a chief finance
officer has violated this policy, the chancellor may discipline, demote or dismiss the chief finance
officer and shall
report the violation and the
action taken to the president and the board of trustees.
vi.
Pursuant to North Carolina law, any contract
between the University and an entity in which a person has a substantial
interest which was entered into in violation
of state laws governing conflicts of interest is void.
The provisions of Section 5 are effective July 1, 2001. Initial
disclosure forms will be filed on or before October 1, 2001. The provisions of
paragraph c.iii., will apply to all contracts entered into after January 1, 2002. The Statement of Economic Interest replaces all disclosure forms
due to be filed on or after July 1, 2007;
the initial Statement of Economic
Interest for people employed
or in office on January 1, 2008, must be submitted to the vice president for
finance by April 15, 2008.
1 G.S. 138A-3(5) defines a “business†as, “Any of the following
organized for profit:
a.
Association.
b.
Business trust.
c.
Corporation.
d.
Enterprise.
e.
Joint venture.
f.
Organization.
g.
Partnership.
h.
Proprietorship.
i.
Vested trust.
j.
Every other business
interest, including ownership
or use of land for income.â€
2 G.S. 138A-3(7) Â Business with which associated. A business in which the covered person
or filing person
or any
member of that covered person’s
or filing person’s
immediate family does any of the following:
a.
Is an employee.
b.
Holds a position as a director, officer, partner, proprietor, or member
or manager of a limited liability company, irrespective of the amount of
compensation received or the amount of the interest owned.
c.
Owns a legal, equitable, or beneficial interest of ten thousand dollars
($10,000) or more in the business or five percent of the business, whichever is
less, other than as a trustee on a deed of trust.
d.
Is a lobbyist registered under
Article 8 of Chapter 163A of the General Statutes.
For purposes of
this subdivision, the term “business†shall not include a widely held
investment fund, including a mutual fund, regulated investment company, or pension
or deferred compensation plan, if all of the following apply:
1.
The covered person,
filing person, or a member
of the covered person's or filing person’s immediate family neither
exercises nor has the ability to exercise control over
the financial interests held by the fund.
2.
The fund is publicly traded,
or the fund's assets are widely diversified.
3 G.S. 138A-3(54) Nonprofit
corporation or organization with which associated. Any not for profit
corporation, organization, or association, incorporated or otherwise, that is
organized or operating in the state primarily for religious, charitable,
scientific, literary, public health and safety, or educational purposes and of which the covered person, filing
person, or any member of the covered
person's or filing person’s immediate family is a director, officer, governing board member, employee,
lobbyist registered under Article 8 of Chapter
163A of the General Statutes
or independent contractor. Nonprofit
corporation or organization with which associated shall not include any board,
entity, or other organization created by this State or by any political
subdivision of this state.