Taking Conflict of Interest Seriously

Leaders of business and legal higher ed associations make the pitch to private college presidents that it's time to review -- and in some cases create -- policies.
February 6, 2008

The session leaders asked for a show of hands. Who in a room filled largely with private college presidents knew that their institutions have conflict of interest policies that apply to individuals? Most arms shot into the air. No surprise there.

But in response to a similar question with only this slight twist -- policies that apply to institutions -- only a few tentative hands rose. Kathleen Santora, chief executive officer of the National Association of College and University Attorneys, said she wasn't surprised by that result, either.

"Policies for individuals have been around for awhile," said Santora, one of the session leaders at the National Association of Independent Colleges and Universities annual meeting on Tuesday. "The institutional policy concept is new on many campuses. In some cases it's still in draft form."

Given the prominence of both types of conflict of interest cases in recent months, and given the increasing attention being paid by higher ed associations to questionable relationships and transactions, colleges would be wise to review, revise and in some cases create policies, Santora told the audience.

Her co-leader for the session, John Walda, president of the National Association of College and University Business Officers, said that never in his career has he seen the subject of conflicts of interest be more on the minds of people in academe.

Walda was part of the group assembled by the American Council on Education that recently released a working paper aimed at helping campus administrators deal with real and perceived financial conflicts. Much like that document, which didn't prescribe solutions but rather focused on questions that campus officials should ask, Tuesday's presentation was heavy on theory -- with the leaders taking turns sharing thoughts on what presidents reviewing their campus policies should keep in mind.

Santora, who has worked with ACE during the past year on conflict issues, said college leaders should look at reviewing and revising their policies as a way of preventing future flair-ups.

"It's less about whether there's a conflict -- we guarantee there will be for your institutions -- but about how to manage those conflicts," she said.

One of Sanora's first suggestions: Make sure that policies clearly articulate the protocol for self-reporting or reporting others' potential conflicts. The important legal factor is whether a campus policy was followed and whether the people involved went through the proper channels.

The more scenarios and real-world examples a policy includes the better, Santora said. That way, employees know not only how their situation might relate to others, but how colleges have handled such cases.

“We’ve moved away from a time when having a policy is enough," she said. "There now has to be a clear way to review the policy in a systematic way.”

Walda said he believes in getting broad-based input for policies. There are potential conflicts you'll never discover unless you have the conversation at the lowest level at which decision are made on campus, he told the audience. And in the end, presidents need buy-in from professors and other employees.

Once the policy is in place, Walda said it's important for college officials to publicize their efforts on campus.

“You can construct the best policy imaginable and review it with the best minds, but if everyone doesn’t know about it, you don’t have much traction," he said.

Part of the problem, Walda added, is that people confuse conflict of interest policies with codes of conduct. Colleges should have both, he said. But they are different. Codes of conduct are broad statements about what actions are appropriate for employees and what constitutes ethical behavior. They often refer to conflict of interest policies, which deal more specifically with cases involving relationships and transactions.

Colleges have long thought about what types of individual conflicts should raise red flags. The most recent example involves a senior admissions official at the University of Pennsylvania who last week cut off ties to a private college counseling business she founded, and resigned from an advisory board to a counseling company in Japan after the arrangements became public.

Walda and Santora focused the NAICU session on individual policies as they relate to governing board members and non-faculty employees. The speakers said they didn't deal with issues relating to faculty because that topic is worthy of a separate session (though several questions from the audience attempted to move the conversation in that direction).

One of the thornier issues for presidents, Walda said, is conflicts that involve board members, and particularly board chairs. "It's kind of hard to tell them what to do."

But he said college officials need to ask themselves, if trustees come forth with conflicts deemed serious enough to pose problems, should they be simply barred from voting, or also from conversations about the vote? And should colleges rely on self-enforcement by trustees, or assign a staff person to oversee their actions?

Santora said she strongly advises colleges to require that board members sign a statement regarding conflicts of interest annually.

It's usually the stories about improper travel benefits or financial dealings that get the headlines and are the most cut-and-dry cases, Walda said. But conflict policies also need to take into account the gray areas -- one of which can be conflict of commitment. Some policies quantify how many hours an employee can work on outside consulting while being in the office, for instance.

Meanwhile, policies covering institutional conflicts are dealing with whether colleges' missions can be compromised by transactions or relationships. That's a particularly hot topic given the ongoing student loan saga and possible commercial conflicts in study abroad.

Walda said many colleges have had policies on what constitutes institutional conflict but haven't formalized them and put them into a single document. Campuses that are looking at their policies are thinking about issues on both the academic and business sides.

Santora said colleges should also keep in mind throughout the process of revising policies that "not all conflicts are bad. Some are perfectly acceptable, so long as they are reviewed by the appropriate body.”

To illustrate that point, Santora read aloud a university policy statement saying, in essence, that it's beneficial for trustees and college leaders to be asked to serve on outside boards and consult people within their communities.

But, as Walda noted: “As long as it looks bad, whether or not it actually is, you need to deal with it."


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