The
UNC Policy Manual
200.1
Adopted
05/11/84
Amended
06/09/89
Amended
09/08/89
Amended
05/11/91
Amended
06/08/01
Amended
11/09/07
Amended
09/18/09
Amended 12/15/17
Technical
Corrections 04/25/19
The Board of
Governors seeks at all times to be fair and impartial in carrying out its
responsibilities and tries to avoid even the appearance of partiality or undue
influence. To promote this objective the following guidelines are adopted as board
policy and recommended to the members for their guidance:
1. Service on Foundation Boards or
Boards of Visitors of Constituent Institutions
Members
of the Board of Governors may, from time to time, be asked to serve
simultaneously on a foundation board or a board of visitors or some similar
board for one of the 16 constituent institutions. No matter how conscientious or successful a
member may be in maintaining impartiality among constituent institutions,
service on such a board will undoubtedly be construed by some as showing
favoritism. It is also felt that some
institutions will feel pressure to name members of the Board of Governors to such
boards if service on them becomes commonplace.
For these reasons members of the Board of Governors are encouraged to
decline any such service.
2. Service
on Boards of Private Colleges and Universities
Members
of the Board of Governors may be asked to serve simultaneously on the board of
a private college or university in North Carolina. While such an invitation is always an honor,
there are potential areas of conflict in such dual memberships. A member should satisfy himself or herself
that dual service will not interfere with his or her obligations either to the
University of North Carolina or to the private institution.
3. Inquiries Concerning Admissions and
Job Openings
From
time to time a member of the Board of Governors may wish to inquire, either
directly or through an officer of the University, about a job opening in the
University or about the admission of an individual to an institution or to a
program. Sometimes a Board member is
asked to write a letter of recommendation on behalf of a candidate for a job or
for admission. It is highly
inappropriate to use one's position on the Board of Governors in an attempt to
influence employment or admissions. It is not inappropriate, however, for a
member to make inquiries or to write letters of recommendation on the member's
personal or business stationery. It should always be clear that the Board member
is not seeking a favor and understands that the decision in all cases will be
made strictly on the merits.
4. Appointments
by the Board of Governors
In
order to avoid any appearance of undue influence, the Board of Governors will
not consider for membership on any board to which it makes appointments any
person who is a spouse of a Board of Governors member, a brother or a sister or
a lineal ancestor or descendant of a member, or the spouse of any such
person. This policy shall not apply,
however, to any person who may have been elected or appointed to any such board
prior to the time the related person became a member of the Board of Governors.
Nor shall the policy apply to any person
who may already be serving on any such board at the time of the adoption of the
policy. The Board of Governors will not
consider for membership on any board to which it makes appointments any person
who was a member of the Board of Governors at any time during the two‑year
period immediately preceding the effective date of the appointment. The boards to which this policy shall apply
include the boards of trustees of the constituent institutions and all boards
to which the Board of Governors make appointments.
5. Inappropriate
Advantage Derived from Board Membership
a. Purpose. It is of critical
importance that decisions made on behalf of the University by its governors,
trustees, chief executive officers, and chief finance officers be in the best
interest of the University and not be influenced by any potential financial
gain to the decision-makers. Furthermore, to assure public confidence in the
integrity of the University, it is important that the University not appear to
be influenced by the personal financial interests of those in decision-making
positions. The purpose of this policy is assure public confidence in the
integrity of the University by preventing members of the governing boards and
chief executive and finance officers of the University from using their
positions, or appearing to use their positions, to influence the decisions of
the University for their personal financial gain while at the same time
allowing the University to take advantage of contracts that are advantageous to
the citizens of North Carolina and to the University and also avoiding having
service to the University be so restrictive that persons with substantial
financial interests will be reluctant to serve.
b. Definitions
As
used in this policy, the following terms have the following meanings:
i. "Business
entity" means a “business” as defined in G.S. 163A-152(5)[1] or a
not for profit corporation.
ii. "Person" means a member of
the Board of Governors or of a board of trustees of a constituent institution,
the vice president for finance, a chancellor, or the chief finance officer of a
constituent institution.
iii. "Substantial interest"
means any of the following:
1. A “business with which associated”
as that term is defined in G.S. 163A-152(7),[2]
except that ownership of more than $10,000 in a publicly traded corporation by
itself is not a substantial interest; or
2. A “nonprofit corporation or
organization with which associated” as that term is defined in G.S 163A-152(54),[3]
except that uncompensated service as a director, officer, or trustee of a not
for profit corporation is not a substantial interest.
iv. "The University" as applied
to members of the Board of Governors, the president, and the vice president for
finance means the University of North Carolina System Office (UNC System
Office) or any of the constituent institutions. The University as applied to
members of the boards of trustees, a chancellor, or a chief finance officer of
a constituent institution means the constituent institution on whose board of trustees
the member serves or at which the chancellor or chief finance officer is
employed.
c. Requirements
i. Each person
must contemporaneously submit to the vice president of finance, each Statement
of Economic Interests that the person files with the State Ethics Commission
pursuant to G.S. 163A-187. These disclosure statements are public records.
ii. Whenever a person has actual
knowledge that a business entity in which the person has a substantial interest
is attempting or planning to enter, is entering, or has entered into a contract
with the University, the person must report the nature of the person's
substantial interest and the nature of the contract to the chief finance officer
of the institution that is or would be a party to the contract. If the person
is a chief finance officer, then the chief finance officer must make this
report to the chancellor or to the president of the institution that is or
would be a party to the contract. Reports required by this paragraph shall be
in writing and will be public records retained by the respective chief finance
officers.
iii. The University will not enter into a
contract with a value of $10,000 or more, or with expected payments of $10,000
or more per year, with a business entity in which a person has a substantial
interest, unless one of the exceptions in paragraph c.iv.,
applies. A person will not in any way:
1. Participate in
making a contract;
2. Attempt to
cause or influence the University to make a contract; or
3. Attempt to influence the contract
specifications or contracting process concerning a contract between a business
entity in which the person has a substantial interest and the University.
The vice president for finance and the respective chief finance
officers of the constituent institutions are responsible for determining
whether the University is entering into a contract with a value of $10,000 or
more with a business entity in which a person has a substantial interest.
iv. The restrictions on entering into a
contract in paragraph c.iii., do not apply if the
person with the substantial interest does not participate in making or
administering the contract and:
1. The contract results from a competitive
sealed bid or a competitive request for proposals with specifications and
criteria;
2. The contract is for goods or
services sold or provided to the general public at a uniform price or is for
goods on state contract sold to state agencies at a uniform price, unless the
contract is prohibited by state law;
3. The contract is an employment
contract with the dependent child or spouse of the president, the vice president
for finance, a chancellor, or chief finance officer, or the dependent child of
a member of the Board of Governors or a board of trustees and the employment is
allowed under Section 300.4.2 of the UNC Policy Manual;
4. The contract is with a bank or a
public utility; or
5. The committee of the Board of
Governors or of the relevant board of trustees designated pursuant to paragraph
d.i., below, finds that the contract is in the best
interest of the University. Examples of when a contract might be in the best
interest of the University include, but are not limited to, when it has
financially advantageous terms, when the goods or services to be provided are
demonstrated to be unique, or when the contract is a continuation of a contract
that was in effect before the person with the substantial interest became
affiliated with the University.
v. If a person is an employee or agent
of a business entity, the person shall not attempt to influence the University
to enter into a contract with the business entity that employs or retains the
person.
vi. A person shall not attempt to
influence the administration of or payments under a contract between the
University and a business entity in which the person has a substantial interest
or between the University and the person's employer.
vii. No person shall disclose or use
confidential information or information concerning economic development or
technology research or development which the person received in his capacity as
a board member or employee of the University for the person's financial gain.
viii. No person shall accept a gift or favor
from a business entity, or the principal in a business entity, which has
entered into a contract with the University within the past year, who currently
has a contract with the University, or who intends to attempt to enter into a
contract with the University if the person:
1.
Has or will prepare plans, specifications, criteria or estimates
for the contract;
2. Awards,
approves, negotiates, or administers the contract; or
3. Inspects or
supervises the contract.
This paragraph does not prohibit the receipt of advertising items
of nominal value, awards such as plaques or trophies, food served at
professional meetings or banquets, or gifts from family members or personal
friends when it is clear that the friendship extends beyond the business
relationship.
ix. A person shall not represent, as
attorney, agent, or trustee, a third party who has an adverse relationship with
the University. A person shall attempt to dissuade a firm or business entity in
which the person has a substantial interest from engaging in representation
adverse to the University.
d. Procedures
i. The chair of
the Board of Governors and each chair of a board of trustees shall designate a
standing committee to determine whether a potential conflict is a permissible
or impermissible activity and to make recommended findings as to whether this
policy has been violated.
ii. Potential conflicts:
1. Any person who receives a report of
a potential conflict shall forward that report to the chief finance officer of
the institution that is or would be a party to the contract.
2. If the person with the substantial
interest claims or the chief finance officer believes that the contract is
permissible pursuant to paragraph c.iv.1., 2., 3., or 4., above, the
determination of whether the contract is permissible or impermissible may be
made by the respective president or chancellor, or the president or chancellor
may request that the designated committee make the determination. Any
determination by the president or a chancellor shall be in writing and shall be
a public record.
3. If the person claims that the
contract is permissible pursuant to paragraph c.iv.5., above, because the
contract is in the best interest of the University, or if a chancellor or the president
refers a conflict question to the committee, then the designated committee
shall determine whether the proposed contract is a permissible or impermissible
activity under this policy and shall enter its determination in the minutes of
its proceedings.
4. If the person who has the potential
conflict is a member of the designated committee, the person shall not
participate in the deliberations of the committee, other than to present the
relevant facts to the committee, and shall abstain from voting.
iii. Allegations of conflict
1. If any person or any senior academic
or administrative officer (SAAO) becomes aware or alleges that a person covered
by this policy has violated this policy, the person shall report the alleged
violation to the chancellor or President of the institution that is or would be
a party to the contract.
2. The person who
receives the allegation shall forward the allegation:
a. To the designated committee of the board
of trustees or of the Board of Governors if the person alleged to have violated
this policy is a member of that board;
b. To the designated committee of the
Board of Governors if the president is alleged to have violated this policy;
c. To the president if the person
alleged to have violated this policy is a chancellor or the vice president for finance;
or
d. To the respective chancellor if the
person is a chief finance officer of that constituent institution.
3. If the person alleged to have
violated the policy is the President or a member of a Board of Governors or of
the board of trustees, then the designated committee will determine whether or
not the policy has been violated. The chairperson of the designated committee
will designate an individual to investigate the allegations and to make a
report to the committee. After considering the report of the investigation and
any response by the person alleged to have violated the policy, the committee
shall make a determination as to whether the policy has been violated and, if
so, a recommendation as to the appropriate sanction to the respective board of trustees
or Board of Governors. The board of trustees or Board of Governors shall vote
to affirm, reject, or modify the recommendation.
4. If the person who has the potential
conflict is a member of the designated committee, the person shall not
participate in the deliberations of the committee, other than to present the
relevant facts and arguments to the committee on his own behalf, and shall
abstain from voting.
5. A Board of Governors member, board
of trustees member, or president who is alleged to have violated this policy is
entitled to receive notice of the allegation, to be present to hear the report
presented to the designated committee, and to inform the committee of any facts
or arguments that demonstrate that he or she did not violate the policy.
6. If the vice president for finance, a
chief finance officer or a chancellor is alleged to have violated this policy,
that allegation will be investigated and acted upon in accordance with the
procedures for disciplining, demoting, dismissing, or terminating the contract
of employees of that position.
iv. The president will present this
policy annually to the Board of Governors and will present it to new members at
the beginning of their service. The chancellors will present this policy
annually to their respective Boards of Trustees and will present it to new
members at the beginning of their service.
e. Sanctions
i. If the Board of
Governors or a board of trustees finds that one of its members has violated
this policy, the Board may take one or more of the following actions:
1. Reprimand or
censure the member;
2. Remove the person from any board
office the person holds or from any committee chairmanship or assignment; and
3. Report the violation to the entity
that appointed the member.
ii. If the Board of Governors finds that
the president has violated this policy, the Board of Governors may discipline,
demote or dismiss the president, as it deems appropriate.
iii. If the president finds that the vice president
for finance has violated this policy, the president may discipline, demote, or
dismiss the vice president, and shall report the violation and the action taken
by the president to the Board of Governors.
iv. If the president finds that a
chancellor has violated this policy, the president may discipline the
chancellor and report the action taken to the Board of Governors and the
relevant board of trustees, or the president may recommend to the Board of
Governors that the employment of the chancellor be terminated and that the
chancellor be demoted or dismissed.
v. If a chancellor finds that a chief
finance officer has violated this policy, the chancellor may discipline, demote
or dismiss the chief finance officer and shall report the violation and the
action taken to the president and the board of trustees.
vi. Pursuant to North Carolina law, any
contract between the University and an entity in which a person has a
substantial interest which was entered into in violation of state laws
governing conflicts of interest is void.
The provisions of Section 5 are effective July 1, 2001. Initial
disclosure forms will be filed on or before October 1, 2001. The provisions of
paragraph c.iii., will apply to all contracts entered
into after January 1, 2002. The
Statement of Economic Interest replaces all disclosure forms due to be filed on
or after July 1, 2007; the initial Statement of Economic Interest for people
employed or in office on January 1, 2008, must be submitted to the vice president
for finance by April 15, 2008.
[1]
G.S. 163A-152(5) defines a “business”
as, “Any of the following organized for profit:
a. Association.
b. Business trust.
c. Corporation.
d. Enterprise.
e. Joint venture.
f. Organization.
g. Partnership.
h. Proprietorship.
i. Vested trust.
j. Every other business interest,
including ownership or use of land for income.”
[2]
G.S. 163A-152(7) Business with which associated. A business in which the covered person or
filing person or any member of that covered person’s or filing person’s immediate family does any of the following:
a. Is an employee.
b. Holds a position as a director,
officer, partner, proprietor, or member or manager of a limited liability
company, irrespective of the amount of compensation received or the amount of
the interest owned.
c. Owns a legal, equitable, or
beneficial interest of ten thousand dollars ($10,000) or more in the business
or five percent of the business, whichever is less, other than as a trustee on
a deed of trust.
d. Is a lobbyist registered under Article 8 of Chapter 163A
of the General Statutes.
For purposes of this
subdivision, the term “business” shall not include a widely held investment
fund, including a mutual fund, regulated investment company, or pension or deferred
compensation plan, if all of the following apply:
1. The covered person, filing person,
or a member of the covered person's or filing person’s immediate family neither
exercises nor has the ability to exercise control over the financial interests
held by the fund.
2. The fund is publicly traded, or the fund's assets are
widely diversified.
[3] G.S. 163A-152(54)
Nonprofit corporation or organization with which associated. Any not for profit
corporation, organization, or association, incorporated or otherwise, that is
organized or operating in the state primarily for religious, charitable,
scientific, literary, public health and safety, or educational purposes and of
which the covered person, filing person, or any member of the covered person's
or filing person’s immediate family is a director, officer, governing board
member, employee, lobbyist registered under Article 8 of Chapter 163A of the
General Statutes or independent contractor.
Nonprofit corporation or organization with which associated shall not
include any board, entity, or other organization created by this State or by
any political subdivision of this state.