A member
of
the immediate family of a Trustee includes a spouse or
civil union
partner, child, parent, sibling, or such relations by marriage or civil
union
partnership, person claimed as a dependent for federal income tax
purposes, and
any relative residing in the same household as the Trustee. There may
be other
family members as to whom disclosure should also be made to avoid the
appearance
of a conflict, and doubts should be resolved in favor of disclosure.
An affiliate
includes
a business, association, corporation, or other legal entity in which a
Trustee
or a member of his/her immediate family is a director, trustee,
officer, partner,
joint venturer, principal, employee, owner, and/or holder of five
percent (5%)
or more of voting stock or a controlling interest. In addition, an
affiliate is
an entity from which the Trustee or a member of his/her immediate
family
otherwise annually receives or has the right to receive $ 1000 or more
compensation, income, or other financial consideration or value.
It
is not
possible to provide an all-inclusive list of situations giving rise to
a
conflict of interest. In general, Trustees may
not use their positions or confidential information to
which they become privy as Trustees for the gain of themselves or
others. Below are
examples of situations
presenting potential, actual or apparent conflicts.
1. Commercial
transactions. Commercial
transactions between a Trustee and the University are not per se barred
under this Policy. In such situations, however, due to the actuality or
appearance of a conflict, it is essential that, as to such proposed
transactions, there is strict adherence to disclosure and recusal
protocols.
Such transactions will be permissible if (a) the transaction is at fair
market
value; (b) the University considers alternative competitive proposals;
and (c)
the University determines that the transaction is fair and reasonable
to, and
clearly in the best interests of, the institution, despite an actual or
apparent conflict.
2. Confidential,
Proprietary or Privileged Information. Except as required by law,
no
Trustee shall, without proper Board or institutional authorization,
give or
release University information or data (“Information”) of a
confidential,
proprietary or privileged nature, or use such Information to gain
personal
advantage or avoid personal detriment, insofar as such Information is
not in
the public domain. This rule applies to Trustees during and after their
University service relative to Information acquired in the course of
their
Trusteeship.
3. Business
Opportunities. No Trustee shall divert from the University for
private gain
of self or others a business opportunity in which the University would
foreseeably engage in furtherance of its mission, unless the University
has
been offered, and through an authorized official declined, a right of
first
refusal.
4. Employment
or Retention of Immediate Family Members or Affiliates. No Trustee
may be
directly or indirectly involved in the hiring, supervision, performance
evaluation, compensation or retention of personal or business services
by the
University of an immediate family member or an affiliate.
5. Remuneration,
Gifts, and other Consideration
a.
From External Parties. No
Trustee shall solicit or accept from any person, organization,
corporation, or
other legal entity (or representatives thereof) seeking to do, or
doing,
business with, or otherwise gain benefit from, the University, any
remuneration, gift, gratuity, services, loans, travel, entertainment or
other
consideration of more than nominal value in exchange for a promise, or
reasonable inference, that the Trustee’s influence with the University
has been
exchanged for such consideration. This prohibition applies without
limitation
to vendors, contractors, sponsors, donors, and job or admissions
applicants.
b.
From the University. It shall not be considered a conflict of
interest for
a Trustee to accept from the University (1) gifts or other items of
value in
consideration of his/her service or retirement from University service;
(2)
customary honoraria; (3) reasonable reimbursement for travel,
food, or
lodging for expenses incurred in connection with University Trusteeship
pursuant to applicable University policy and procedures; or (4)
complimentary
tickets for a Trustee and his/her guest at University functions or
events when
the presence of the Trustee is deemed to serve the best interests of
the
University
6. Employment
of University Personnel. A Trustee
wishing to employ or retain a University officer of administration for
private
consulting or other non-University purposes must first obtain from the
General
Counsel an opinion as to whether such engagement does, or may, give
rise to a
conflict of interest. If the General Counsel concludes that a conflict
does, or
may, arise, the Trustee shall disclose the proposed employment or
consulting
arrangement to the Board Chair. The Board Chair will either authorize
or
decline to authorize the proposal, conferring with the Executive
Committee in
his/her discretion. If the proposal is authorized, the Chair shall
communicate
the authorization in writing to the Trustee, with a copy to the General
Counsel. The Trustee’s Conflict of
Interest Disclosure Form shall then be amended to reflect the
affiliation. In
the case of proposed employment of other University personnel, the
Trustee
should consider whether such employment might reasonably result in a
conflict
of interest and, if so, he/she should thus amend the Conflict of
Interest
Disclosure Form.
7. Testimony.
A Trustee who testifies in person or through recorded or written
communication before any public body or public official, whether
judicial,
legislative or administrative, shall make it initially and clearly
known on the
record when s/he is speaking on the matter as a University
representative.
Trustees shall obtain authorization to speak on behalf of the
University by
means of customary governance protocols.
8. Political
or Appointive Office. The constituency of each Trustee is the
University,
regardless of the source of appointment. Trustees whose service on the
Board is
incidental to elective or appointive office shall engage in such
service with
due regard for the fiduciary duties of a Trustee, and in a manner
consistent
with this Policy.
Disclosure Forms
Each Trustee shall
file a Trustee Disclosure Form at the time of initial appointment and
by March
1 of each subsequent year of service. The Form will require the Trustee
to
acknowledge his/her review of the Policy and to agree to disclose on
the Form
and as otherwise required by the Policy any matter as to which a
conflict does,
or may, exist. The Trustee shall update the Form during the year as
circumstances dictate. Forms will be filed with the Trustee
Coordinator, and maintained
by the Assistant Secretary of the Board, with a copy to the General
Counsel.
Disclosure
Obligation
In advance of any
meeting at which a conflict may foreseeably arise, the Trustee must
disclose
the conflict and all relevant material facts to the Committee (or
Board) Chair.
If the Trustee with such conflict is the Committee or Board Chair, the
conflict
shall be disclosed to the Vice Chair, who shall instead preside for the
agenda
item as to which the matter arises.
Relevant material
facts may include the benefits that could inure to the Trustee; the
extent to
which, if any, the Trustee is participating in a competitive process to
enter
into a transaction or business affiliation with the University; whether
the
Trustee is privy, in his or her capacity as a Trustee, to proprietary
or other
non-public University information that could be advantageous to the
Trustee in
relation to other parties interested in a proposed transaction; and/or
if the
University would be likely to enter into the proposed transaction or
relationship in the absence of the Trustee’s University affiliation
A Trustee may
elect, following such disclosure, to self-recuse from participation in
discussion of the matter as to which disclosure is made. Alternatively,
if a
Trustee submits a disclosed conflict for consideration by a Committee
or the
Board, when the item arises on the agenda the Chair shall, for the
record,
identify to the Committee or the Board the conflict and the material
facts
relating thereto. (If the Trustee with such conflict is the Committee
or Board
Chair, the conflict shall be identified by the Vice Chair, who shall
preside
for the agenda item as to which the matter arises.)
The Trustee shall
request authorization from the Committee or the Board to participate in
any
discussion of the agenda item that takes place in open session, and
shall be
recused from any portion of an Executive Session devoted to the matter
as to
which a conflict arises. If the Committee or Board by majority vote
authorizes
the Trustee’s participation in such public discussion, the Trustee
shall
nonetheless abstain from voting on any such item.
In all instances,
the determination as to whether to permit the Trustee to participate in
discussion of the agenda item as to which a conflict arises shall be
made
following full disclosure by the Trustee of the nature of the conflict,
and on
the basis of whether, in the considered judgment of the Committee or
the Board,
the University’s interests will be best served by participation of the
Trustee
notwithstanding the conflict.
Role of the
University General Counsel
Prior to each
Committee and Board meeting, the General Counsel shall review the
agenda in
relation to Trustee Disclosure Forms to determine whether a conflict
may, or
will, arise. If a conflict is identified, the General Counsel shall
contact the
Trustee and the Committee (or Board) Chair regarding the relevant
agenda item.
The Trustee and the Chair shall otherwise proceed as described in the
first
section of this Protocol (“Disclosure Obligation”).
Upon request of the
Trustee and/or the Committee or Board Chair, the General Counsel shall
provide
an opinion as to whether a conflict of interest arises as to such
Trustee. All
such opinions shall be subject to applicable privileges under law.
Approval of a
Conflict of Interest Transaction
If a conflict is
identified for the first time subsequent to any action by the Board in
which a
conflicted Trustee participated, such action shall be voidable by the
Board in
accordance with the Vermont Nonprofit Corporation Act and otherwise
applicable
procedures relating to Board meetings and action.
Notwithstanding the
preceding paragraph, a conflict of interest transaction is not voidable
or the
basis for imposing liability on the Trustee if the transaction (a) was
fair at
the time it was entered into or (b) is approved in advance by vote of
the Board
or a Committee if (i) the material facts of the transaction and the
Trustee’s
interest are disclosed or known to the Board or Committee; and (ii)
Trustees
approving the transaction in good faith reasonably believe that the
transaction
is fair to the University. Any approval
must receive an affirmative vote of a majority of the Trustees on the
Board,
and any Trustee who recuses from participation in discussion of,
and/or
voting upon, a matter before the Committee or Board shall not be
counted toward
a quorum.
Post-Transaction
Challenge Procedure
Complaints of
non-compliance with this Policy shall be filed promptly and in writing
with the
Chair of the Board, with copies to the Secretary and Assistant
Secretary of the
Board. Disposition of such complaints shall be handled in the same
manner as
proposed or approved transactions under this Policy and, and as to a
non-compliant Trustee, under relevant provisions of the University
Charter,
Bylaws and Vermont Nonprofit Corporation Act.
This Policy
incorporates by reference any obligations imposed upon the University,
the
Board, and/or a Trustee by federal or State law.
upon Board approval:
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