Faculty Conflict of Interest Handbook

This Handbook includes information to assist faculty, administrators, and others in implementing the Faculty Conflict of Interest Policy endorsed by the University Committee on Faculty Affairs (February 21, 2006), approved by the Faculty Council (March 14, 2006), and approved by the Academic Council (March 21, 2006), prior to its adoption by the Board of Trustees on April 13, 2006.

The information and guidance provided in this Handbook was prepared by the Faculty Conflict of Interest Information Officer (FCOIIO), as required by the Policy (Paragraph 12), in consultation with relevant administrators, appropriate faculty committees, and individual faculty. The Handbook addresses each of the Policy’s 12 paragraphs in order - the Policy is reprinted in bold with line numbers added [not on the web version] for clarity. Commentary to assist with understanding, explanation, and interpretation follows each Paragraph. Specific definitions and key points are highlighted for emphasis; no part of the Policy is intended to be more important than any other.

Table of Contents
(updated December 12, 2007)
. 3 . 3 . 3
  • Paragraph 2
    • Appointment of Faculty Conflict of Interest Information Officer
  • Paragraph 3
    • Responsibility for disclosure of conflicts of interest
  • Paragraph 4
    • Processes for disclosure & evaluation of allegations of non-compliance
  • Paragraph 5
    • Importance of COI related to externally-funded research, humans subjects research, & commercialization of intellectual property
      • Externally-funded projects
      • Research Involving human subjects
      • Commercialization of intellectual property
      • Institutional due diligence
  • Paragraph 7
    • Process for review, management & resolution of disclosures
  • Paragraph 12
    • Preparation of a Handbook for advising about & interpreting the Policy
  • Appendix
    • Role, appointment & evaluation of the Faculty Conflict of Interest Information Officer
. 7 7 . 8 . 8 . 12   12 . 15 . 15 . 15 . 17. 20. 20 . 22 . 22 . 23 . 23 . 29 . 29 . 30 . 30 . 31 . 31 . 34 . 34 . 35 . 35. 36 36. 38

Conflicts of Interest, Faculty

This policy was approved by the Board of Trustees on April 13, 2006.

1.   (a)  As a modern research-intensive land-grant university, Michigan State University must maintain the trust of the general public which supports it and which it serves.  For the University to do so, its faculty1 must pursue their research, teaching, outreach, and service responsibilities with integrity and proper professional judgment in a manner consistent with the highest standards of their respective disciplines and in the best interests of the University.  A faculty member’s reputation for integrity and for exercising proper professional judgment can be seriously compromised, however, if the faculty member fails to avoid or disclose a conflict of interest.  Moreover, an individual faculty member’s unmanaged and unresolved conflicts of interest can undermine confidence in the university and, thus, harm its standing and that of its entire faculty.

(b)  This Policy addresses the disclosure, review, management, and resolution of conflicts of interest relating to the performance by faculty of their research, teaching, outreach, and service responsibilities at the University.  For purposes of this Policy, a conflict of interest exists when a faculty member’s financial interests or other opportunities for tangible personal benefit may compromise, or reasonably appear to compromise, the independence of judgment with which the faculty member performs his/her responsibilities at the University.

1   Although “faculty” is used throughout for simplicity, this Policy applies to all individuals appointed with pay through the academic personnel system other than graduate assistants.

Paragraph 1, Section (a) introduces the Policy and summarizes its purpose along with the basis for its adoption. Section (b) establishes the scope of the Policy by defining conflict of interest and stating that the Policy encompasses all activities undertaken by faculty1 in the performance of their responsibilities at Michigan State University (MSU), regardless of whether these activities are assigned or self-initiated as part of their academic portfolio and professional record. Like all other faculty, deans (including associate and assistant deans), department chairpersons, school directors, and executive managers appointed through the Academic Personnel System are subject to the Policy with respect to their research, teaching, and service/outreach responsibilities.

The following discussion of Paragraph 1 of the Policy focuses on the ethical underpinnings and academic context for the Policy. For descriptions and examples of conflicts of interest, see the discussion for Paragraph 3.

Implicit in the Policy's implementation is MSU’s belief that its faculty are individuals with proven disciplinary expertise who will act responsibly2 and with integrity “through reasoned discourse, intellectual honesty, mutual respect and openness to constructive criticism and change”3.  One measure of academic integrity is a commitment to openness and honesty with the intent of minimizing bias as it relates to the performance of faculty duties, as reflected in these responsibilities in MSU’s Faculty Rights and Responsibilities Policy4:

  • To conduct an “honest and objective appraisal” of colleagues;
  • “not to abuse their standing within the University for personal or private gain;”
  • “not to exploit students for private advantage;” and
  • “to pursue excellence and intellectual honesty in teaching, research, and other creative endeavors.”

In situations where a person holding a position of trust has competing professional and personal interests, “Such competing interests can make it difficult to fulfill his or her duties impartially. Even if there is no evidence of improper actions, a conflict of interest can create an appearance of impropriety that can undermine confidence in the ability of that person to act properly in his/her position”5. It is in the interest of MSU for all to act with diligence in maintaining and protecting both public and private confidence in its faculty, individually and collectively.

As recognized by Stanford University, “conflicts of interest are common and practically unavoidable in a modern research university”6. Paul J. Friedman in discussing the “troublesome semantics of conflict of interest”7 properly stressed that, "You don’t have to do anything improper to have a conflict of interest; it is strictly situational.” The presence of a conflict of interest does not mean that there has been or will be a misdeed; however, failure to disclose a conflict of interest may properly be viewed as a misdeed.

Determining the existence of a conflict of interest situation requires the application of both subjective and objective standards, as described in this Handbook. See FAQ 3. The Policy is based on the guiding principle that the high degree of professional autonomy granted to faculty carries with it the professional responsibility8 for disclosing a personal interest that could reasonably be viewed by others as biasing the faculty member’s professional judgment. The faculty member’s personal belief that the competing personal interest would not actually bias his/her actions should not be a factor in the faculty member’s decision whether to disclose the interest under the Policy. See FAQ 3(b).

Even with the guidance provided by this Handbook, there may remain questions or differences of opinion about whether a disclosure is required. The Policy supports openness and erring on the side of disclosure. As noted, conflicts are not inherently improper and rarely reflect negatively on the faculty member. It is possible that disclosure may require inclusion of private matters, but these will be held confidential and protected from disclosure for reasons other than review under the Policy, unless otherwise required by law. See Paragraph 9. Emphasis will be on the provision of key basic facts and not excessive detail.

A goal of this Handbook is not just to assist in explaining and interpreting the Policy, and to implement a process for disclosing, reviewing, and managing conflicting interests, but also to inform, educate, and stimulate discussion about conflicts of interest. Local discussions within the context of specific disciplines and academic cultures should be helpful to faculty well before they are faced with a conflict of interest situation. Paragraph 12 recommends that individual colleges prepare supplements to this Handbook that address their “different norms, customs, and expectations” to help in identification and management of conflicts of interest. The FCOIIO will assist the colleges in the preparation of these supplements.

While the Policy emphasizes personal decision-making and self-disclosure, individual decisions to disclose or to not disclose will ultimately be judged from the perspective of an independent, reasonable, and prudent professional guided by a firm commitment to the protection of the public’s trust according to disciplinary norms, customs, and standards. See FAQ 3(b). The academy’s expectations of its members and the “public trusts” they are committed to protecting thus form a context for the disclosure, review, assessment, and management of conflicts of interest. The following examples of important matters entrusted to MSU faculty are illustrative, not exclusive. They are offered as “guideposts” to assist individual colleges and like units in discussing and articulating local standards and expectations as noted above.

Included among the important matters entrusted to MSU faculty are the responsibilities for:

  • Informed compliance with laws, regulations, non-university policies, and contracts regarding conflict of interest situations and their disclosure;
  • Fostering and protecting the collective trust in the community of scholars by acting responsibly and being impartial and open in collecting, synthesizing, and sharing information, and by disclosing situations that might lead others to question the independence of judgment with which certain conclusions were reached;
  • Impartial stewardship of opportunities for intellectual growth and advancement by others, such as graduate students, postdoctoral trainees, academic staff, or junior faculty, whose academic/professional activities and accomplishments the faculty member supervises and/or evaluates;
  • Promoting fair and honest competition and evaluation based on accepted standards of peer review; and
  • Protecting access to and public benefit from research results and new knowledge in an equitable and timely manner, consistent with law, University policy, and authorized contracts.

In addition to these broad responsibilities shared by all, faculty in certain disciplines may also have added responsibilities guided by their profession’s “code of conduct” or licensing requirements (e.g., physicians, lawyers, counselors, engineers) for their patients or clients, or through other unique “trusts” that must not be conflated with academic endeavors generally. These disciplinary standards also form the basis and context for disclosure, review, assessment, and management of conflicts of interest.

2.   The President, in consultation with a joint subcommittee of the University Graduate Council (UGC) and the University Committee on Faculty Affairs (UCFA), will appoint a Faculty Conflict of Interest Information Officer (FCOIIO) to serve as a resource to faculty and administrators on defining and addressing conflicts of interest and to convene the Conflict Review Committee described in Paragraph 6.

The responsibilities of the Faculty Conflict of Interest Information Officer (FCOIIO) are listed in the Appendix to the Policy. This individual must be knowledgeable about the legal, ethical, and practical contexts in which conflicts of interest arise and are reviewed and managed. The FCOIIO must act with impartiality and the trust of faculty and administration.

Under the Policy, the FCOIIO is first and foremost a resource to help educate and inform faculty about the nature of conflict of interest situations and the established processes for their disclosure, review, management, and, if needed, resolution or elimination.

The FCOIIO convenes the Conflict Review Committee (CRC) and may advise it during its deliberations (Paragraph 6). The FCOIIO is available to assist the VPRGS with assessing alleged violations of the Policy, either for failure to disclose a conflict of interest as required or for provision of false or misleading information (Paragraph 4, Section (b), Paragraph 11).

In addition to the specific responsibilities related to implementing the Policy, the FCOIIO will play an important role in fostering a research environment at MSU that promotes the responsible conduct of research and related training and activities.

3.   Each faculty member is responsible for disclosing his/her own conflicts of interest in accordance with the procedure established under Paragraph 4(a).

Although the initial judgment about what to report as a conflict of interest lies with the faculty member, the University is ultimately responsible for deciding whether a conflict of interest exists in a given situation, and, if it does, how it should be managed and resolved. Faculty are reminded that the determination of the existence of a conflict of interest situation relies on both subjective and objective criteria. See FAQ 3. Financial interests described here and in Paragraph 5 establish objective criteria for when a financial interest is considered to be “significant” and must be disclosed in writing under the Policy. See also the discussion for Paragraph 1 of this Handbook regarding the context in which judgments about disclosure of conflicts of interest should be made.

A reasonable person would naturally expect a valuable financial interest to exercise a more substantial influence on a faculty member's judgment than would one of limited value. Similarly, financial interests whose value could be directly affected by the faculty member's activities at the University would be a logical source of concern and cause for scrutiny. Given these precepts, when would an independent observer reasonably surmise that a faculty member's financial interests could compromise the independence of that faculty member’s judgment in performing his/her duties at the University?

Universities, associations, and federal agencies that seek to preserve and enhance research integrity have sought to differentiate between financial interests held by faculty that could reasonably be a potential source of conflicts of interest, and those that, reasonably, should not be. Through disclosure, attention is focused on the former, which are called significant financial interests.

A financial interest is anything of monetary value, including, for example, payments for services such as consulting fees, salary, honoraria, or commissions; equity interests like stock and stock options; other ownership interests, like being a partner in a partnership or operating an unincorporated business; beneficial interests, i.e., being the beneficiary of a trust or estate; indebtedness, like loans or mortgages; intellectual property rights, like owning a patent or a copyright, or the right to receive royalties or licensing fees from a patent or copyright; and gifts of goods, property, or services, like airline tickets, resort or hotel accommodations, or other recreational or personal amenities. Service on a corporate board or as a corporate officer, or on the scientific advisory board of a company, is a financial interest in that entity, if the faculty member is paid for the service. But, even unpaid service as a corporate director or officer or as a corporate advisor can be an opportunity for tangible personal benefit that can form the basis for a conflict of interest.

A financial interest can arise from any kind of legal entity - - a corporation or limited liability company; a partnership, limited partnership, or joint venture; a trust or estate; a firm, franchise, “dba”, sole proprietorship, unincorporated association, or other business; and so on. A faculty member’s financial interests or other opportunities for tangible benefit must be judged not only by his/her personal holdings, but also on an aggregate basis with members of his/her immediate family (spouse, domestic partner, dependent children, and other dependents that reside with the faculty member) and any legal entity that one or more of them owns or controls.

With that as background, the following are examples of financial interests which are deemed to be “significant”:

  • salary, consulting fees, royalties or other payments of any kind from a single entity which exceeded $10,000 over the last 12 months or which are expected to exceed $10,000 over the next 12 months, or
  • ownership interests in a single entity which have a fair market value of more than $10,000 or are more than one percent (1%) of its equity, or
  • intellectual property rights which have a fair market value of over $10,000 or which generate, or are expected to generate, revenues of over $10,000 per year, or
  • unvalued stock options or other options for ownership in a privately held company, or
  • paid or unpaid service on a governing or advisory board, or in a fiduciary or managerial role, for, or as a general partner of, an entity, or
  • serving as a trustee for a trust or estate, or having a beneficial interest in a trust or estate, whose value exceeds $10,0009, or
  • indebtedness to or from a single entity exceeding $10,000, or
  • receipt of gifts of goods, property, or services, like airline tickets, resort or hotel accommodations, or other recreational or personal amenities whose value exceeds $250 from a single entity.

The following financial interests are excluded from consideration under the Policy:

  • salary or other remuneration from the University or paid at the University's behest (including remuneration from a University-approved practice plan),
  • income from seminars, lectures, service on committees or review panels, or other educational activities sponsored by public or not-for-profit entities,
  • any financial interest arising solely by means of investment in a mutual, pension, or other institutional investment fund over whose management and investments neither the faculty member nor any immediate family member of the faculty member exercises control (e.g., TIAA-CREF), and
  • indebtedness from a bank, credit union, or other commercial lender.

Michigan’s Contracts of Public Servants with Public Entities Law: The Michigan statute entitled "Contracts of Public Servants with Public Entities," MCL 15.321 et seq., requires that any contract between the University and any of the following have Board of Trustees approval:

  • an employee of the University;
  • any partnership or unincorporated association of which the employee is a partner, member, or employee;
  • any private corporation of which the employee is (1) a director, officer, or employee; or (2) a stockholder owning more than one percent (1%) of the total outstanding stock of any class if the stock is not listed on a stock exchange or stock with a total market value in excess of $25,000 if the stock is listed on a stock exchange; or
  • any trust of which the employee is a beneficiary or trustee.

Such faculty interests must be disclosed when there is an expectation for initiation of a contract between the University and the company or other entity even when the employee with the interest is not promoting or taking an active role in negotiating or approving the potential contract. See FAQ’s 10 and 11.

Examples of Conflict of Interest Situations: The following list of examples of conflict of interest situations is related to “the important matters entrusted to MSU faculty” (see the discussion for Paragraph 1). The list is illustrative and not exhaustive. Other situations could arise that create conflicts of interest for faculty which should be disclosed using the procedures in Paragraph 4, Section (a).

  • Submitting a proposal, or initiating work without a proposal, to conduct research, testing, or a clinical trial funded by a company or other entity in which the faculty member holds a significant financial interest, or by one of its competitors.
  • Serving as an officer or director of, or holding a significant financial interest in, a company or other entity that the faculty member knows, or reasonably should know, supplies goods or services to, leases space or property to, or otherwise enters into agreements with, MSU.
  • Evaluating (e.g., tenure or promotion, annual performance, or for internal funding) another MSU faculty member who has a financial interest in a company or other entity, or one of its competitors, in which the faculty member conducting the evaluation also holds a significant financial interest.
  • Holding supervisory or educational responsibility for graduate students, postdoctoral trainees, or support/academic staff working on a research project that could materially affect a company or other entity in which the faculty member holds a significant financial interest, or one of its competitors.
  • Holding supervisory responsibility for, or exercising influence over, the procurement of goods or services, or the lease of space or property, from a company or other entity in which the faculty member holds a significant financial interest.
  • Holding supervisory or educational responsibility for a graduate student, postdoctoral trainee, or support/academic staff member employed by a company or other entity in which the faculty member holds a significant financial interest.
  • Holding supervisory or educational responsibility for a graduate student, postdoctoral researcher, or support/academic staff member being recruited for employment by a company or other entity in which the faculty member holds a significant financial interest.
  • Making a professional referral, arising from faculty duties, to a company or other entity in which the faculty member holds a significant financial interest.
  • Conducting or having supervisory responsibility for research or other activities at MSU that could materially affect a company or other entity in which the faculty member holds a significant financial interest, or one of its competitors.
  • Exercising professional influence (e.g., advisory panel, grant or other peer review, testimony, op-ed piece) that could advance or harm the interests of a company or other entity in which the faculty member holds a significant financial interest, or one of its competitors.
  • Receiving gifts of goods, property, or services, like airline tickets, resort or hotel accommodations, or other recreational or personal amenities from a company or other entity that could be materially affected by the conduct of the faculty member’s teaching, research, or service responsibilities.

Conflict of Commitment: The Faculty Conflicts of Interest Policy does not address the issue of conflicts of commitment. MSU's Outside Work for Pay Policy10 indicates that, “A conflict of commitment occurs when the time and attention a faculty member devotes to outside activities interferes with the performance of his/her responsibilities to the University” and that, “… faculty members are expected to arrange their outside activities so as to avoid conflicts of commitment.”

The Outside Work for Pay Policy applies to “faculty members (tenure system and fixed term) at the rank of instructor through professor who hold appointments of at least 50% time”11 and does not apply to unremunerated outside activities. There is no parallel policy for individuals appointed with pay in other positions through the Academic Personnel System.

Note that “pay” under the Outside Work for Pay Policy and remuneration for outside activities which is not regulated by the Outside Work for Pay Policy are financial interests which would create a conflict of interest under the Policy if they were to compromise, or reasonably appear to compromise, the independence of judgment with which the Faculty member performs his/her University responsibilities.

It is also important to stress that unremunerated political, religious, philanthropic, and other such activities may also compromise faculty responsibilities for the important public trusts noted in the discussion for Paragraph 1. Therefore, faculty are encouraged to consider whether individual commitments to such activities create opportunities for tangible personal benefit that should be reported under the Policy if they cause a conflict of interest.

4.   (a) (i)  The FCOIIO shall prepare a model college procedure for faculty members to report their own conflicts of interest.

      (ii)  Any college that chooses not to adopt the model procedure may develop its own procedure for its faculty to report their conflicts of interest, provided that the Vice President for Research and Graduate Studies (VPRGS) approved the procedure after consulting with the FCOIIO.

(b)  The VPRGS shall establish a mechanism, after consulting with the FCOIIO, for investigating concerns or allegations regarding conflicts of interest on the part of faculty which are not self-reported.

Forms for the disclosure of conflicts of interest in writing will be appended to this Handbook and updated as needed.  Similarly, procedures developed under Paragraph 4, Section (a)(ii) by colleges that elect to not adopt the model procedure described here will also be appended to this Handbook.

Since the Policy addresses conflicts of interest related to situations involving all facets of faculty responsibilities (research, teaching, outreach, and service activities), a faculty member should disclose a conflict of interest in writing to his/her academic unit administrator as soon as he/she is aware of the conflict.  Such disclosure should be given using the model college procedure or the procedure for any college that establishes its own pursuant to the Policy.

A faculty member should disclose a conflict of interest as soon as the faculty member becomes aware of the situation that gives rise to the conflict.  See FAQ 8.  If a faculty member feels that it would be inappropriate to disclose a conflict of interest to his/her academic unit administrator because that individual has the same conflict or another conflict regarding the matter to be disclosed, the faculty member should disclose the conflict to his/her dean using the decision criteria noted above.

If the faculty member's academic unit administrator is a dean or separately reporting director, and the faculty member believes that it would be inappropriate to disclose the conflict to the academic unit administrator because the academic unit administrator has the same conflict or another conflict regarding the matter to be disclosed, the faculty member should disclose the conflict to one of the three individuals listed in Paragraph 7 based on the type of activity that is associated with the conflict of interest situation.

Since the basic intent of the procedures developed to implement the Policy is to consolidate processes while still providing such organizational autonomies as may be required (see the discussion for Paragraph 5), the FCOIIO will develop a centralized system to maintain a record of conflict of interest disclosures and their review, including any plans for the resolution or management of the conflict approved through the process described under Paragraph 7.  The collection of a set of precedents for compliance with the Policy will help to insure that faculty are treated fairly and consistently.  This system will also permit affected offices to have access to up-to-date and complete information to verify that they have met the requirements of applicable laws (both State and Federal), regulations, policies, and guidelines.  In addition, the system is intended to avoid duplication of effort and to reduce the need for repeated inquiries to individual faculty members about the same situation.

This centralized record keeping system will contain sensitive and private information; access to it will be limited to those having a need to know that information to perform their duties under the Policy, except as may otherwise be required by law (see the discussion for Paragraph 9).  See also Records Retention in the discussion for Paragraph 7.

Concerns or Allegations Regarding Unreported Conflicts of Interest:  As required by Paragraph 4, Section (b), all concerns regarding, or allegations of, unreported conflicts of interest should be communicated to the Vice President for Research and Graduate Studies. An unreported conflict of interest may result from a failure to disclose a conflict of interest or, even more seriously, a false certification of the absence of a conflict of interest. Failure to report a conflict of interest constitutes noncompliance with the Policy and may be cause for disciplinary action. See the discussion for Paragraph 10.

Upon learning of such a concern or allegation, the VPRGS shall seek the advice of the CRC (see the discussion for Paragraph 6). If the CRC informs the VPRGS that the situation does not involve a conflict of interest, the VPRGS will determine whether to provide further clarification about the situation through education and training or guidance provided in this Handbook, as appropriate. The VPRGS will also consider any alleged violation of Paragraph 11 of the Policy in connection with the situation.

If the CRC informs the VPRGS that the situation appears to involve an unreported conflict of interest, the VPRGS shall review the matter with the affected faculty member, his/her academic unit administrator, and his/her dean and determine if an unreported conflict of interest exists.

The VPRGS shall assess the extent and seriousness of the unreported conflict of interest, including any concerns or allegations about the provision of false or misleading information (see the discussion for Paragraph 11). Failure to report a conflict of interest constitutes noncompliance with the Policy. See the discussion for Paragraph 10. In cases involving the filing of a false, misleading, or incomplete report of a conflict of interest under the Policy, the VPRGS may choose to inform the University Intellectual Integrity Officer (UIIO), who may initiate review of the matter under the Procedures Concerning Allegations of Misconduct in Research and Creative Activities12. See the discussion for Paragraph 10.

5.   (a)  The conduct of research by faculty, particularly research involving human subjects, and efforts to commercialize intellectual property created by faculty present situations in which the disclosure and management of conflicts of interest are especially important.  The University administrators charged to manage those areas shall, therefore, prepare disclosure processes, in consultation with academic governance, that accord with applicable legal requirements, including rules imposed by external funding sources, and that permit the timely assessment and resolution of conflicts of interest relating to research and to commercialization of intellectual property created by faculty.

(b)  The University will not make expenditures on externally funded sponsored research or transfer rights in intellectual property to entities in which faculty have a financial interest unless all required disclosures have been made and any conflicts of interest identified as a result of the disclosures have been evaluated and resolved.

The Policy recognizes the need for special attention to the disclosure of conflicts of interest arising from externally funded projects (primary oversight by the Office of Contract and Grant Administration (CGA)), research involving human subjects (primary oversight by the Institutional Review Board (IRB)), and the commercialization of intellectual property (primary oversight by the Office of Intellectual Property (OIP)). Each of these areas is addressed in detail below. Please note that an individual disclosure may relate to more than one of these areas at the same time.

Implementation of the Policy and detailed guidance provided through this Handbook are intended to insure compliance with applicable laws, regulations, policies, and guidelines. This Handbook, in its interpretation of the Policy, strives for consistency in establishing coordinated procedures for disclosure, disinterested review, and responsible management of conflicts of interest while making available information needed by each of the offices having primary oversight of its respective area.

Externally Funded Projects: The National Science Foundation (NSF) and the U. S. Public Health Service (PHS) have developed standing requirements governing the disclosure of conflicts of interest related to grant funding. With implementation of the Policy, an explicit expectation now exists for disclosure of conflicts of interest at the time of submission of proposals for all sponsored projects regardless of the source of funding, or prior to the authorization for start of a project in the event that funding results from other than a written proposal.

Conflicts of interest arising at any time after submission of a proposal for external funding or during the conduct of a sponsored research project should be disclosed immediately, with review and development of a management plan to follow in a timely manner; within 60 days is required for NSF- and PHS-funded projects and suggested as a standard for all others.

All disclosures of conflicts of interest must be revised and updated as the interest or situation which is the basis for the conflict changes. Records of the conflict shall be maintained for the term of the sponsored project and at least three years after the project is closed financially (longer, if required by the sponsor).

Note that the Policy requires disclosure of conflicts of interest resulting from “other opportunities for tangible personal benefit” in addition to the agency specific requirements related to financial interests summarized below. See FAQ 4. Similarly, a faculty member may subjectively determine that he/she should disclose a conflict of interest even if such a disclosure would not be required by the federal regulations described below. See FAQ 3(a).

The National Science Foundation and the U.S. Public Health Service

NSF and the PHS coordinated their efforts relating to the reporting and management of conflicts of interest, resulting in compatible requirements, but different approaches. NSF has implemented an Investigator Financial Disclosure Policy through its Proposal and Award Policies and Procedures Guide in Part II, Section IV.A. - Conflict of Interest Policies13. PHS promulgated regulations14 concerning Objectivity in Research that are codified at 42 CFR Part 50 for the Public Health Service under Policies of General Applicability in Subpart F15 and for Health and Human Services generally at 45 CFR Part 9416.

Both manage the conflict, not the financial interest, by requiring investigators17 to disclose at the time the proposal is submitted the existence of all significant financial interests 1) that would reasonably appear to be affected by the research for which funding is sought, and 2) in entities whose financial interests would reasonably appear to be affected by that research.

For both NSF and PHS, the term “significant financial interest” means anything of monetary value, including, but not limited to, salary or other payments for services (e.g., consulting fees or honoraria); equity interests (e.g., stocks, stock options or other ownership interests); and intellectual property rights (e.g., patents, copyrights and royalties from such rights).

“Significant financial interest” does not include:

  • salary, royalties, or other remuneration from MSU;
  • income from seminars, lectures, or teaching engagements sponsored by public or nonprofit entities;
  • income from service on advisory committees or review panels for public or nonprofit entities;
  • an equity interest that, when aggregated for the investigator and the investigator’s spouse and dependent children, meets both of the following tests: does not exceed $10,000 in value as determined through reference to public prices or other reasonable measures of fair market value, and does not represent more than a five percent (5%) ownership interest in any single entity; or
  • salary, royalties or other payments that, when aggregated for the investigator and the investigator’s spouse and dependent children, are not expected to exceed $10,000 over the next 12 months.

Research Involving Human Subjects: The second area for special attention to disclosure of conflicts of interest relates to studies involving human subjects. This is particularly important, as a factor that must be considered by an IRB in assessing whether a financial interest in the outcome of the study affects the rights and welfare of the people who agree to be subjected to a particular research protocol. Conflict of interest disclosures which will inform IRB deliberations may concurrently be needed to comply with requirements for externally funded projects, as noted previously.

Federal regulations governing protections of human subjects are based on a common federal policy that was implemented by 16 agencies in 199118. The Department of Health and Human Services (DHHS), Office for Human Research Protections (OHRP),19 takes a leadership role in implementing this common rule and in providing guidance concerning specific aspects of its implementation. In May 2000, DHHS announced20 five new initiatives to strengthen human subject protections in clinical research, including the development of a guidance concerning its regulations on conflict of interest. The resulting Final Guidance document, Financial Relationships and Interests in Research Involving Human Subjects Guidance for Human Subject Protection21, was released in May 2004. This document addresses human subject protection in research conducted under both DHHS (45 CFR part 46, Protection of Human Subjects) and Food and Drug Administration (FDA) (21 CFR parts 50, Protection of Human Subjects, and 56, Institutional Review Boards) regulations.

In addition to the regulations governing “objectivity in research” discussed above for PHS-funded projects, the FDA requires22 sponsors, as part of the marketing approval process for products, to certify that investigators do not have financial interests or to disclose those interests to the FDA. Sponsors are required to report “… (1) financial arrangements between the sponsor and the investigator whereby the value of the investigator's compensation could be influenced by the outcome of the trial, (2) any proprietary interest in the product studied held by the investigator; (3) significant payments of other sorts over $25,000 beyond costs of the study; or (4) any significant equity interest [exceeding $50,000] in the sponsor of a covered study …”23.

This FDA disclosure, or “reporting” requirement, only “applies to any clinical study submitted in a marketing application that the applicant or FDA relies on to establish that a product is effective or is used to show equivalence to an effective product, and any study in which a single investigator makes a significant contribution to the demonstration of safety”24. Persons reporting such interests to the FDA should also provide the same information to the IRB. (Note, however, that such financial interests should already have been disclosed under the Policy prior to the initiation of the clinical research project, in connection with the external funding of the project or as a part of the information submitted to the IRB for approval of the human research protocol, or both. If the interest did not exist when the proposal or the protocol was submitted, it should be reported as soon as it arises.)

Disclosures of conflicts of interests involving human subjects and plans for their management will be reviewed pursuant to the Policy and reported to the IRB without disclosure of the magnitude of the financial interest triggering the conflict.

It is important to note here that the DHHS Final Guidance recommends that IRBs consider the nature and context of the disclosed interest, including the following questions:

  • How should financial relationships that potentially create a conflict of interest be managed?
  • Would the rights and welfare of human subjects be better protected by any or a combination of the following:
    • “reduction of the financial interest?”
    • “disclosure of the financial interest to prospective subjects?”
    • “separation of responsibilities for financial decisions and research decisions?”
    • “additional oversight or monitoring of the research?”
    • “an independent data and safety monitoring committee or similar monitoring body?”
    • “modification of role(s) of particular research staff or changes in location for certain research activities, e.g., a change of the person who seeks consent, or a change of investigator?”
    • “elimination of the financial interest?”

In situations where the IRB deems that the conflict of interest management plan approved by the VPRGS under the Policy is not sufficient to protect the rights and welfare of human subjects, the IRB may refuse to approve the participation of human subjects in that project. See FAQ 9. The IRB Chair will communicate and consult with the VPRGS if the IRB has concerns regarding any plan for the management of a conflict of interest relating to a research project involving human subjects.

IRBs are also responsible25 for ensuring that IRB members who review research have no conflicting interest. “No IRB may have a member participate in the IRB's initial or continuing review of any project in which the member has a conflicting interest, except to provide information requested by the IRB”. (See the discussions for Paragraphs 4 and 7.)

Commercialization of Intellectual Property:  A third area requiring particular attention to disclosure of conflicts of interest is in the commercialization of intellectual property created by faculty. This is for two primary reasons.

First, MSU’s Patents26 and Development of Copyrighted Materials27 Policies specify that a portion of the net income from licensing the rights to a patent and from the marketing of University-owned copyrighted works will be distributed to the inventor(s)/author(s). Implementation of these policies may generate a significant financial interest (see Paragraph 3) for the faculty member. Second, commercialization of intellectual property may involve the formation of new companies in which faculty have financial interests. Because of the faculty interest and the Michigan law described under Paragraph 7, agreements to license intellectual property rights to the start-up company must almost always be approved by the Board of Trustees. The faculty with the financial interest in the company may also be the inventor(s) of the intellectual property on which the licensing agreements are based.

Institutional Due Diligence: Section (b) of Paragraph 5 emphasizes the need for all conflict of interest disclosures and reviews and development of any required management plans to be completed prior to the release of sponsor project funding to begin an awarded research project, initiation of any studies involving human subjects, or signing of any licensing agreement to transfer intellectual property rights from MSU to another party. There is the expectation that all requisite actions will take place in a timely manner so as to not impede either faculty or institutional research and commercialization efforts, but also that all standards for care and attention in the management of conflicts of interest will not be compromised for any reason.

6.   The VPRGS shall establish a Conflict Review Committee (CRC) composed of three faculty members from different disciplines, one of whom they will select as chairperson.  The deans and the director of the National Superconducting Cyclotron Laboratory (NSCL), after consultation with the relevant faculty advisory body at the college/NSCL, will nominate faculty candidates.  Final selection of the faculty members will be made by the joint subcommittee of the UGC and the UCFA.  CRC members shall serve for staggered three-year terms.  They may be reappointed to additional terms. The FCOIIO shall convene the CRC and may assist the CRC in its deliberations.

The FCOIIO shall assist the VPRGS in developing an annual announcement soliciting nominations of senior faculty to serve as members of the CRC for three-year terms to begin concurrently with the start of the new academic year. Terms of initial appointments may be shorter or longer than three years and will be determined through discussions with nominees to establish the staggered terms of service prescribed by Paragraph 6.

Following consultation with the relevant faculty advisory body, each dean and the Director of the National Superconducting Cyclotron Laboratory (NSCL) may submit nominees for the CRC to the VPRGS, along with an up-to-date copy of the nominee’s curriculum vitae. Deans and the NSCL Director should consult with individual nominees to secure their approval and permission to be nominated. Possible nominees are encouraged to consult with the VPRGS, the FCOIIO, and current or past members of the CRC to inform themselves about the role and responsibilities of the CRC.

Each dean and the NSCL Director may submit one or more nominees to the VPRGS for consideration. Nominations are at the discretion of colleges and the NSCL and are not required.

Nominees will be forwarded to a joint subcommittee of the University Committee on Faculty Affairs (UCFA) and the University Graduate Council (UGC) for review and selection. Outgoing CRC members may be considered for reappointment if they are willing to serve again. The VPRGS shall forward letters of appointment to the nominees chosen for the CRC. The FCOIIO shall consult with and convene the CRC as required.

Insofar as possible, faculty members selected for the CRC should be from different academic disciplines. They should generally be individuals who have been active researchers, as most conflicts of interest arise in the context of conducting research and creative activities. It is desirable that the CRC as a whole has knowledge and experience concerning the commercialization of intellectual property and the conduct of clinical research/trials.

7.   (a)  When a faculty member self-reports a possible conflict of interest pursuant to the procedure established in Paragraph 4(a), the faculty member’s unit administrator should review the disclosure with the faculty member’s dean2.  If the unit administrator and the dean agree that no conflict of interest exists, they shall inform the faculty member and the VPRGS of that determination in writing.

(b) (i)  If any conflict of interest is identified as a result of the disclosures made by a faculty member under Paragraph 4(a), or as a result of a report made by another party and investigated pursuant to the mechanism established in Paragraph 4(b), the faculty member’s unit administrator shall develop a written plan for the resolution or management of the conflict of interest in consultation with the faculty member, the FCOIIO, and, depending on the subject matter of the conflict, appropriate representatives of the central administration.

      (ii)  The plan shall be submitted, first, to the faculty member’s dean for approval, then to the CRC for review and comment, and, finally, to the VPRGS, who may accept the plan or decide to implement another plan for the management or resolution of the conflict of interest.

      (iii)  If the dean does not approve the plan developed by the unit administrator, the dean may adopt a different plan for the management or resolution of the conflict of interest.  In that event, both plans shall be submitted to the CRC for its review and comment.  After receiving the recommendations of the CRC on the matter, the VPRGS shall decide on the plan for the management or resolution of the conflict of interest, and shall report his/her decision to the CRC, faculty member, unit administrator, and dean.

      (iv)  If the faculty member does not agree with the unit administrator’s plan for the management or resolution of the conflict of interest, the faculty member may submit an alternative plan to the dean.  The dean may accept the faculty member’s plan, the unit administrator’s plan, or formulate a different plan.  The plans of the faculty member, unit administrator, and dean shall be distributed to the members of the CRC, which shall submit its recommendations on the matter to the VPRGS.  The VPRGS shall decide on the plan for the management or resolution of the conflict of interest, and shall report his/her decision to the CRC, faculty member, unit administrator, and dean.

      (v)  In devising the plan to address the conflict of interest, the unit administrator, the dean, and the VPRGS shall seek to employ the least intrusive management techniques that will suffice to resolve the ethical and legal concerns arising from the conflict.  Sometimes conflict of interest situations may be satisfactorily addressed through public disclosure of the faculty member’s financial interest (or other opportunity for tangible personal benefit) that is the cause of the conflict of interest.  On other occasions, stronger measures may be required to resolve or eliminate a serious conflict of interest.

2  In this Policy, “dean” means deans of colleges and the equivalent unit administrators for faculty appointed in non-college units.

When a faculty member reports a conflict of interest as described in Paragraph 4, Section (a), the academic unit administrator should take a leadership role in the review of such conflicts.  Responsibility for this process is shared at two administrative levels, normally the academic unit administrator having immediate supervisory responsibility for the faculty member and the dean having immediate supervisory responsibility for the academic unit administrator.

In situations where a faculty member’s appointment is shared, the disclosure should be submitted to the academic unit administrator who the faculty member deems to have primary responsibility for the activity that is associated with the conflict of interest situation.  Where the unit is supported by more than one college, the dean of the lead college should assume responsibility for the second level review.

A faculty member who is also an academic unit administrator and who has a conflict of interest should report it to his/her dean using the criteria described above.  One of the individuals listed below, based on the type of activity that is associated with the conflict of interest situation, will then handle the second level review.  If the VPRGS handles the second level review, the Provost will receive the recommendations of the Conflict Review Committee (CRC) and decide on the plan for management or resolution of the conflict of interest.

A faculty member who is also a separately reporting director or a dean and who has a conflict of interest should report it to one of the following individuals based on the type of the activity that is associated with the conflict of interest situation.  The Provost will handle the second level review, receive the recommendations of the CRC, and decide on the plan for management or resolution of the conflict of interest.
  • For research and creative activities, including all sponsored projects activities, the Vice President for Research and Graduate Activities (VPRGS).
  • For teaching, the Senior Associate Provost.
  • For outreach and service activities, the Associate Provost for University Outreach and Engagement.
  • For commercialization of intellectual property, the VPRGS.

If one of the individuals listed above is the faculty member who has a conflict of interest to report, he/she should disclose it to the academic unit administrator in the department in which he/she holds his/her faculty appointment.  The appropriate dean will conduct the second level review.  If the VPRGS is the faculty member with the conflict of interest, the Provost will assume the responsibilities assigned to the VPRGS for selecting the plan for managing or resolving the conflict.

If a CRC member or the FCOIIO has a conflict of interest affecting the performance of his/her responsibilities under the Policy, he/she should disclose the conflict to the Provost or President and refrain from further participation in the matter until otherwise instructed, in writing, by the President or Provost.

The academic unit administrator should consult with the dean and, together, the academic unit administrator and the dean must determine whether a conflict of interest exists under the Policy and according to the guidance provided in this Handbook.  The academic unit administrator and the dean may also consult the FCOIIO, the General Counsel, and representatives of other offices (see Paragraph 5) about the reported conflict.

If the academic unit administrator and the dean agree that there is no conflict of interest, they should make a written record of that determination for the protection of the faculty member who made the disclosure, and share it with the faculty member and the VPRGS through the FCOIIO.  A determination of no conflict of interest should not be conflated with conflict of interest situations involving minimal risks resulting from perceived or actual bias that are appropriately managed through openness and the process of making the disclosure.

If the academic unit administrator and the dean determine that a conflict of interest exists, the academic unit administrator shall develop a written plan for the management or resolution of the conflict after consulting with the faculty member, the FCOIIO, and, depending on the circumstances and subject matter of the conflict, appropriate representatives of the central administration (e.g., CGA, IRB Chairs, OIP, the Graduate School, General Counsel).

The written plan developed by the academic unit administrator for the management or resolution of a conflict of interest disclosed by a faculty member should be sufficiently detailed to permit further dispassionate review and assessment by the dean, CRC, and VPRGS of the potential problems arising from the conflict and the plan’s capacity to address them.  The plan should include sufficient detail and objective measures to permit a later assessment of the faculty member’s compliance with the plan and of the plan’s effectiveness.  Upon its completion the plan should be submitted to the dean for the second level review.

It is anticipated that in most cases the plan developed by the academic unit administrator will be acceptable to the faculty member having the conflict of interest.  However, the faculty member having the conflict of interest has the right to prepare his/her own written plan if there is disagreement that cannot be resolved through the consultation between the faculty member and the academic unit administrator that is required to take place during the preparation of the academic unit administrator’s plan.  In that event, the two alternative plans clearly identified according to their authors are to be forwarded together to the dean for the second level review.

The written plan(s) shall be considered by the dean, who shall develop an alternative plan if he/she does not approve of (one of) the submitted plan(s).  The dean will forward his/her preferred plan to the Chair of the CRC through the FCOIIO, along with any other plans he/she received.

The FCOIIO shall promptly circulate the plan(s) and all related materials to the members of the CRC and assist in documenting the resulting discussions and recommendations.  The Chair of the CRC and the FCOIIO shall develop procedures for the CRC to review, evaluate, and make recommendations to the VPRGS about submitted plans.

The FCOIIO shall forward the CRC’s recommendations to the VPRGS, who shall decide the plan for the management or resolution of the conflict.  If the plan adopted by the VPRGS is different from the plan accepted by the faculty member, the VPRGS should meet with the faculty member prior to finalizing the plan.  If the plan adopted by the VPRGS is contrary to a recommendation by the CRC, the VPRGS shall so advise the CRC.  The plan adopted by the VPRGS is final and binding, provided that the VPRGS's decision on the conflict management plan may be grieved for the reasons set forth in the applicable grievance procedure.  Also, in most conflict situations, the faculty member may decide not to undertake the activity that gives rise to the conflict rather than complying with the adopted plan for managing or eliminating the conflict.

Development of Conflict of Interest Management or Resolution Plans: As noted by the University of Chicago28, “… it is not possible to set out detailed guidelines for resolving conflicts in many unforeseen situations. Sound administrative discretion is an integral part of the University's conflict of interest system.”

The common means of managing many conflicts will be the public disclosure of the faculty member's financial interest (or other opportunity for tangible personal benefit) which is the cause of the conflict of interest. In such cases, the disclosure of the information may be part of the plan for the resolution of the conflict. Indeed, it may be the entire plan.

Other conflict management techniques include, for example:

  • monitoring of research by independent reviewers,
  • separation of responsibilities for financial decisions and research decisions,
  • appointment of another faculty member to assume leadership responsibilities for the project or supervision of affected graduate students or postdoctoral researchers, or
  • modification of a protocol or research plan.

Occasionally, stronger measures may be required to resolve or eliminate a serious conflict of interest. These might include:

  • disqualifying a faculty member from participating in all or part of the situation that gives rise to the conflict,
  • divestiture of the financial interest or severing the relationship that causes the conflict of interest, or
  • deciding not to undertake the activity that gives rise to the conflict.

See also the alternatives suggested by the DHHS in the discussion for Paragraph 5.

In extremely rare situations, the VPRGS may determine, after careful consultation with the CRC, that imposing conditions or restrictions like divestiture or disqualification to resolve or eliminate a serious conflict of interest would be ineffective or inequitable, and that the potential negative impacts that may arise from the conflict are outweighed by interests of scientific progress or public health, welfare, or benefit. In such cases, the VPRGS may allow the research or other situation that gave rise to the conflict to go forward without imposing these conditions or restrictions.

Conflicts of interest which affect the performance by faculty of their responsibilities as members of review panels at MSU (IRB, Institutional Animal Care and Use Committee (IACUC), promotion and tenure committees, committees charged to evaluate internal grant applications, or other boards or committees with similar institutional responsibilities) are considered to be conflicts of interest under the Policy29. Consistent with the practice for all IRB members, such conflicts are satisfactorily managed by the faculty member’s recusal from participating in the review of the person or project in question30.

If a CRC member or the FCOIIO has a conflict of interest affecting the performance of his/her responsibilities under the Policy, he/she may not participate further in the affected matter unless instructed to do so, in writing, by the Provost or the President. The Provost or the President may designate a substitute for the individual in the matter thus affected.

Michigan’s Contracts of Public Servants with Public Entities Law: This Michigan statute requires Board of Trustees approval for contracts between MSU and non-MSU companies and other entities in which an MSU employee has a financial interest as specified in the statute and described under Paragraph 3.

As a prerequisite for the Board's approval, the pecuniary interest of the employee in the contract is publicly disclosed and becomes a matter of record in the Board's minutes. After the initial public notice of the proposed contract, the Board votes whether to approve the contract at a subsequent formal session of the Board. A vote of at least two-thirds (2/3) of the full membership of the Board is required to approve the contract. The following are made part of the official record of the Board meeting at which the vote is taken:
  • the name of each party to the contract;
  • the nature of the employee's pecuniary interest in the contract;
  • the duration of the contract;
  • the financial consideration between the parties to the contract;
  • a description of any use of University facilities or ser