P
ROCEDURES FOR THE
I
MPLEMENTATION OF
A
RTICLE
XXII
OF THE
R
OCHESTER
I
NSTITUTE OF
T
ECHNOLOGY
’
S
B
YLAWS
C ONFLICT OF I NTEREST P OLICY
This document contains the procedures for implementation of Article XXII of the Rochester
Institute of Technology’s Bylaws (Article XXII). Article XXII and RIT’s Individual Conflict of
Interest and Commitment Policy (C4.0) are RIT’s conflict of interest policies.
1
I.
D
EFINITIONS
A.
Conflict of Interest. A conflict of interest will be deemed to exist whenever an individual is in the position to approve or influence RIT policies or actions that involve personal interests of the individual that may be inconsistent with the interests of RIT, or could ultimately harm or benefit financially:
1) the individual;
2) an individual’s Relative; or
3) any organization in which s/he or a Relative is a director, trustee, officer, member, partner, or more than 10% shareholder.
Service on the board of any other organization, including not-for-profit corporations, constitutes a potential conflict of interest.
B.
Relative. A Relative of an individual includes his or her spouse or domestic partner, ancestors, brothers and sisters, children, grandchildren, greatgrandchildren, and spouses or domestic partners of brothers, sisters, children, grandchildren and great-grandchildren.
C.
Related Party. A Related Party includes:
1.
any Trustee, officer or key employee of the Institute or any Affiliate of the
Institute;
2.
any Relative of a Trustee, officer or key employee of RIT or any Affiliate of
RIT; or
3.
any entity in which any individual described in clauses (i) and (ii) of this subsection has a ten percent (10%) or greater ownership or beneficial interest or, in the case of a partnership or professional corporation, a direct or indirect ownership interest in excess of five percent (5%).
1 Article XXII applies to RIT trustees, RIT officers, and key employees of RIT. C4.0 applies to all RIT regular employees who are not otherwise RIT trustees, officers or key employees.
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E.
Related Party Transaction. A Related Party Transaction includes any transaction, agreement or any other arrangement in which a Related Party has a financial interest and in which RIT or any Affiliate of RIT is a participant.
E.
Affiliate. An Affiliate of RIT includes any entity controlled by, in control of, or under common control with RIT.
F.
Key Employee. A Key Employee includes any person who is in a position to exercise substantial influence over the affairs of RIT, as well as those employees listed as key employees in RIT’s Information Tax Return (Form 990).
II.
S TEPS FOR D ISCLOSING AND M ANAGING C ONFLICTS OF I NTEREST
A.
A Trustee, or officer or Key Employee shall disclose a Related Party Transaction to the Secretary of the Institute (Secretary):
1.
prior to voting on or otherwise discharging his/her duties with respect to any matter involving the conflict which comes before the Board or any committee;
2.
prior to entering into any contract or transaction involving the Related Party;
3.
as soon as possible after the Trustee or officer learns of the Related Party
Transaction;
4.
prior to an individual’s initial election as a Trustee; and
5.
on the conflict of interest disclosure form distributed annually by the
Secretary.
B.
Following receipt of information concerning a Related Party Transaction, the
Secretary will arrange for the RIT Board of Trustees’ Conflict of Interest
Committee (Committee) to consider the material facts concerning the proposed contract or transaction.
C.
It shall be the responsibility of the Committee to approve contracts or transactions involving Related Parties by a majority of the Committee.
D.
The Committee shall approve only those contracts or transactions in which the terms are fair and reasonable to RIT and are consistent with the best interests of
RIT.
1.
Fairness includes, but is not limited to, the concepts that RIT should pay no more than fair market value for any goods or services that RIT receives, and
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that RIT should receive fair market value consideration for any goods or services that it furnishes others.
2.
The Committee shall set forth the basis for its decision with respect to approval of Related Party Transactions in the written minutes of the meeting at which the decision is made. The minutes shall include: a) the basis for determining that the terms are fair and reasonable to RIT; b) alternative arrangements reviewed and considered; and c) the basis for determining that the arrangements are consistent with the best interests of RIT.
E.
The Trustee, officer or Key Employee with the potential conflict of interest shall not participate in any deliberation or voting regarding the approval of the contract or transaction involving the potential conflict of interest. The Board of Trustees, or the Committee, may request that the interested Trustee, officer or Key
Employee provide information regarding the Related Party Transaction prior to the commencement of deliberations or voting thereon.
F.
The Trustee, officer or Key Employee with the potential conflict of interest shall not attempt to improperly influence the deliberation or voting regarding the contract or transaction involving the potential conflict of interest.
G.
The Committee can approve in advance procedures to be used by RIT employees charged with responsibility for entering into contracts and transactions on behalf of RIT, for certain contracts involving an actual or potential conflict of interest.
Such procedures shall, at minimum, require an employee to consider available alternative transactions and to document any such transaction considered by the employee. The creation of theses advance procedures shall not relieve the
Committee of its obligation to approve contracts or transactions involving actual or potential conflicts of interest.
H.
If a majority of the Committee does not approve the Related Party Transaction because it finds that either the approved procedures were not followed or that the contract or transaction is unfair to RIT, the contract or transaction will be void and not binding on RIT.
I.
If a potential contract or transaction between a Related Party and RIT is not disclosed to the Secretary prior to RIT entering into such a contract or transaction,
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then this Related Party Transaction must be promptly reported to the Secretary by the Related Party. The Secretary will bring the existence and essential terms of the contract or transaction to the attention of the Committee. The Committee will promptly review the contract or transaction and determine:
1.
that available alternative transactions were considered, and
2.
that such Related Party Transaction is fair, reasonable and in the best interests of the Institute.
J.
In the discretion of the Committee, it may refer the decision concerning a particular Related Party Transaction to the entire Board of Trustees.
K.
The Committee shall report to the full Board at least annually concerning conflicts of interest that have been disclosed, and contracts and transactions involving conflicts that it has approved.
L.
The President of RIT (President) shall report to the Committee at least annually concerning employee conflicts of interest that have been disclosed, and contracts and transactions involving employee conflicts that the President has approved.
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