Workplace conduct & capability
Conflict of interest policy and procedure
The university's conflict of interest policy and procedure accords with the Seven Principles of Public Life established by the Nolan Committee. The fact that the University has adopted such a policy does not in any way cast doubt on the integrity or professionalism of the University's employees. Rather it recognises that the University wishes to give a great deal of freedom to employees to engage in external activities, but in so doing needs to put in place a mechanism to protect its employees, and itself, from reputational damage and other liabilities
The most important message in the university's conflict of interest policy and procedure is that staff should always disclose an activity if they are in doubt about whether it represents a conflict of interest.
Loughborough University encourages members of its staff to engage in a wide variety of external activities. The traditional academic roles, such as teaching and supervising students and conducting grant-funded academic research, are nowadays often supplemented by commercial collaborations including consultancy, commercial research and development, intellectual property licensing and involvement in 'spin-out' companies.
The University recognises that involvement in such external activities carries many advantages to the University and the individuals concerned. However, on occasion, they may give rise to conflicts of interest, whether potential or actual, perceived or alleged.
Therefore, all University staff are required to recognise and disclose activities that might give rise to conflicts of interest or the perception of conflicts and to ensure that such conflicts are seen to be properly managed or avoided.
If properly managed, activities can usually proceed as normal whilst at the same time upholding the person's obligations to the University, meeting regulatory and other external requirements and protecting the integrity and reputation of the University and its members. By contrast, conflicts which are not managed effectively may jeopardise the University's public standing and may cause serious damage to the reputation of the University and of the individuals concerned.
It is therefore the University's policy to encourage and foster external activities whilst ensuring that when conflicts or perceived conflicts of interest arise they are identified and disclosed, and in relevant cases, appropriately managed. In every instance, the University reserves the right to make a determination in light of its best interest.
This document offers guidelines on the University’s Policy and provides some practical assistance to its staff on how they should manage potential or actual conflicts of interest. As an additional source of help, please refer to the:
This policy applies to all members of the University, including staff, external committee members, consultants, honorary appointments and volunteers. A reference in this policy to staff includes any person within the scope of the policy.
It is the responsibility of each individual to recognise situations in which he or she has a conflict of interest, or might reasonably be seen by others to have a conflict, to disclose that conflict to the individual’s line manager and through them to the Dean or Director of Service and, to take such further steps as may be appropriate as set out in more detail under the procedure below.
If an individual is uncertain about how this policy might affect his or her activities or has any questions about its application, he or she should contact their line manager.
A conflict of interest arises where the commitments and obligations owed by an individual member of staff to the University or to other bodies, for example a funding body, are likely to be compromised, or may appear to be compromised, by:
- that person's personal gain, or gain to immediate family (or a person with whom the person has a close personal relationship), whether financial or otherwise; or
- the commitments and obligations that person owes to another person or body.
There can be situations in which the appearance of conflict of interest is present even when no conflict actually exists. Thus it is important for all staff when evaluating a potential conflict of interest to consider how it might be perceived by others.
The duty to declare a possible conflict applies to the perception of the situation rather than the actual existence of a conflict. However, the duty is not infringed if the situation cannot reasonably be regarded as likely to give rise to a conflict of interest.
Conflicts of interest may be financial or non-financial or both. Further information about both types is set out below.
A financial conflict of interest, for the purposes of this policy, is one where there is or appears to be opportunity for personal financial gain, financial gain to close relatives or close friends, or where it might be reasonable for another party to take the view that financial benefits might affect that person's actions.
Financial interest means anything of monetary value, for example:
- payments for goods or services;
- equity interests (e.g. stocks, stock options or other ownership interests);
- resources and assets, including equipment, technical staff and facilities and/or
- intellectual property rights (e.g. patents, copyrights and royalties from such rights).
The level of financial interest is not the determining factor as to whether a conflict should be disclosed. What might be 'not material' or 'not significant' for one person might be very significant for another. Good practice in many situations will mean the disclosure of 'any' financial interest, however small. A conflict will arise if the interest might provide, or be reasonably seen by others, to provide an incentive to the individual which affects their actions and where he or she has the opportunity to affect a University decision or other activity (because for example he or she is the decision-maker or the principal investigator on a research project). For examples of conflicts involving financial interest see Appendix A.
Non-financial interests can also come into conflict, or be perceived to come into conflict, with a person's obligations or commitments to the University or to other bodies, for example the individual's college or other body of which he or she is a trustee. Such non-financial interest may include any benefit or advantage, including, but not limited to, direct or indirect enhancement of an individual's career, education or gain to immediate family (or a person with whom the person has a close personal relationship). For examples of non-financial conflicts of interest see Appendix A.
It is the duty of every member of staff to accurately and promptly disclose:
- a change in status of an existing actual, perceived, or potential conflict of interest and/or commitment.
- a new actual, perceived, or potential conflict of interest and/or commitment.
Apparent or perceived conflicts of interest can be as damaging as actual conflicts of interest. Staff should consult their line manager if they are uncertain about whether a situation or activity presents a conflict of interest. The line manager shall evaluate the activity or situation and advise on the most appropriate course of action.
The general rule, with the exception of committee business, is that disclosure should be made at the time the conflict first arises, or it is recognised that a conflict might be perceived, in writing to the line manager. If the line manager has an interest in the matter to be discussed, the disclosure shall be made to the person at the next higher level of authority. In most cases this will be to the Dean/Director of Service.
Disclosure in all cases shall include the type of potential conflict (conflict of interest or commitment), the nature of the activity, a description of all parties involved, the potential financial interests and rewards, possible violations of legal requirements, and any other information which the employee feels necessary to evaluate the disclosure
Many situations will require nothing more than a declaration and a brief written record of that declaration, which must be held in the Department or School’s records.
Some instances will however need to be dealt with by agreeing how the conflict can be actively managed to eliminate the conflict, safeguard against prejudice toward University activities and provide continuing oversight. The approach adopted should be documented in a management plan and copies provided to the relevant parties. A copy of the final plan must be held in the Department or School’s records. One or more of the following strategies may be appropriate to manage the conflict of interest:
- not taking part in discussions of certain matters;
- not taking part in decisions in relation to certain matters;
- referring to others certain matters for decision;
- resolving not to act as a particular person's supervisor;
- divesting or placing in trust certain financial interests;
- publishing a notice of interest;
- standing aside from any involvement in a particular project; and/or
- declaring an interest to a particular sponsor or third party.
It is the responsibility of those affected to comply with the approach that has been agreed.
There are however some particular instances where the general procedure is varied and further specific steps are required such that approval is obtained not only from the Dean/Head of Professional Services but from a University Council.
External committee members and consultants to the University are also required to divulge any personal or family financial holdings or situations that could create a conflict of interest and/or introduce bias into their professional judgement. Such disclosures should be made to the University’s Academic Registry or School contracting for the service, and appropriate determination shall be made on the management of any conflict.
Failure to follow the procedure set out in this policy or failure to comply with any stipulated management plan for managing the disclosed conflict will be considered a serious matter and may lead to disciplinary action being taken against the individual.
REMEMBER: THE OVERRIDING PRINCIPLE IS THAT IF IN DOUBT, DISCLOSE.
Conflict of interest policy and procedure
Approved by Council November 2017
This list is not meant to be exhaustive. The primary obligation rests with the individual to recognise situations in which he or she potentially has a conflict of interest and to disclose and discuss that conflict to their line manager.
- Staff of the University serving on other bodies or committees will typically be asked by those parties to declare financial interests.
- Authors submitting a paper must disclose any 'significant financial interest' or other relationship with the manufacturers of any commercial products or providers of commercial services discussed in the manuscript and any financial supporters of the research. The intent of such disclosures is not to prevent an author with a significant financial or other relationship from publishing a paper, but rather to provide readers with information upon which to make their own judgments.
- The researcher has a financial interest in the company sponsoring the research, this being exacerbated if the value of the researcher's interest may be affected by the outcome of the research.
- An academic researcher holds a directorship or significant shareholder of a company and through their University research activities has access to privileged information relating to a company that may be operating in a related field. The external organisation should be informed of such a potential conflict before they disclose anything.
- The researcher holds a position in an enterprise (e.g. as director) that may wish to restrict (or otherwise manage) adverse research findings for commercial reasons or not wish to publish the results of the research.
- A researcher or a related body in which the researcher has an affiliation or a financial interest may benefit, directly or indirectly, from dissemination of research results in a particular way (including any unwarranted delay in or restriction upon publication of such results).
- Some research funding agencies set specific disclosure requirements related to financial interest. They may require, for example, direct notification to them or to University officials where a principal investigator's financial interests might reasonably appear to be affected by the outcomes of the research.
- Some types of research, e.g. clinical trials, also require additional declarations related to financial interest. Researchers need to be aware of and comply with those specific requirements. Further information can be found in the terms and conditions of the grant or contract. Researchers should contact the Research Office if they are in any doubt as to the requirements.
Student supervision and teaching:
- Staff with a close personal or familial relationship with a student or a student's family who may be involved in decisions about that student's admission, supervision or academic progress or the award of any scholarship, prizes or other grants to the student. If the staff member attends a meeting of the board of examiners where the student is being assessed, the interest should be declared.
- A member of staff who is in a position to judge or evaluate the quality of a student's work holds a financial stake or a formal position in any student-run, owned or controlled commercial venture whilst that student is enrolled at the University.
- A postgraduate research student receiving support from a company in which his/her academic supervisor has a financial interest or position.
Other examples of possible conflicts of interest:
- Participating in the appointment, hiring, promotion, supervision or evaluation of a person with whom the staff member has a close personal relationship. All staff recruitment should be carried out in accordance with the University’s Recruitment Guidelines.
- A researcher has a financial interest in the licensee (or proposed licensee) of University intellectual property.
- A staff member takes part in the negotiation of a contract between the University and a company, where the staff member or his or her family or a close personal friend has a financial or non-financial interest (e.g. a directorship) in that company.
- An academic chairs a University committee which is to consider the allocation of funds to be shared between a number of Schools, including their own.
- Where there is a family or personal relationship between two members of staff, neither member of staff should be involved in any decision or process affecting the other, including promotion, remuneration, discipline or grievance.
Spin-outs and licensees of University IP
- Staff may have a financial interest or other personal interest in a spin-out or in an organisation to which the University has licensed or is seeking to license University IP with which they are intending to create a start-up company.
In such cases:
They should normally play no executive role in any decisions made between the University or its subsidiaries and such spin-outs or IP licensees. If it is believed that there are exceptional circumstances to argue for such involvement, prior permission must be sought by the Dean and then from the Pro-Vice-Chancellor (Enterprise). The proposed conflict of interest plan/approach to be put to the Dean and then the Pro-Vice-Chancellor (Enterprise) must aim to protect the reputation of the academic(s), their research group(s) and the University and ensure compliance with company law.
Sale, supply or purchase of goods or services
- All purchases for the supply of goods or services should comply with the University’s Procurement Rules, including the code of ethics. Where a conflict of interest could occur, those responsible for making the decision should take particular care in deciding which supplier or contractor to choose. So as to be able to show impartiality, individuals should take appropriate steps to ensure value for money. Advice may be sought from the Head of Procurement.
- Staff must ensure the probity of all financial transactions. The sale or supply of goods by the University or the purchase of goods or services by the University must be carried out in accordance with the University’s Financial Regulations. Staff should not normally be involved in supply or purchase decisions in relation to any external organisation in which they or any members of their family or any person with whom they have a close personal relationship have a financial interest or in any way have the capacity for personal gain. If there are exceptional circumstances that prima facie require such involvement, the following process should be followed:
- the person should disclose, in writing to their line manager, the nature of the transaction, the potential conflict and the method proposed to manage the conflict;
- they and their line manager must formulate a proposed plan/approach that protects the University and ensures compliance with the law and the integrity of the transaction(s) and the individuals involved; and
- the line manager must then seek approval of that plan from the Director of Finance.