South Dakota State University Alumni Association
Code of Conduct and Ethics
Adopted: September 19, 2009, by the SDSU Alumni Association Board of Directors
1. General Policy
9. Protection and Proper Use of Assets
2. Reporting Violations and Non-Retaliation
10. Recordkeeping
3. Discipline
11. Internal Controls and Fraud
4. Amendment, Modification and Waiver
12. Purchasing
5. Laws, Rules and Regulations
13. Record Retention and Destruction
6. Conflicts of Interest
14. Process for Determining Compensation
7. Confidential Corporate Information
15. Joint Ventures
8. Corporate Opportunities
1. GENERAL POLICY
Ethical conduct in business is not just for the select few. All of the officers, directors and employees
of the South Dakota State University Alumni Association (“SDSU AA”) are responsible for conducting
SDSU AA business in a legal, honest and ethical manner. More than guidelines, this Code of Conduct
and Ethics (this “Code”) forms the standard of conduct that you, as an SDSU AA representative, must
follow and enforce. Your responsibility to act in accordance with the standards set forth in this Code
is in addition to your obligation to comply with both the letter and spirit of all laws, rules and
regulations governing the SDSU AA. If any law, rule or regulation conflicts with this Code, you must
comply with such law, rule or regulation.
All employees must have a keen appreciation of our responsibility to our stakeholders and to the
public. Collectively, we must earn confidence in the integrity of our institution.
You are always expected to use good judgment and to act in accordance with the standards set forth
in this Code. If you find yourself in a situation where proper conduct is unclear; consult with the
president/CEO or another appropriate person.
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2. REPORTING VIOLATIONS and NON-RETALIATION
You are expected, and have an obligation to the SDSU AA, to promptly report on a confidential basis
suspected or known illegal practices and/or violations of the standard of conduct expected of an
officer, director or employee of the SDSU AA. You may report such violations to your immediate
manager, the president, chairman of the board of directors, or the chair of the audit committee.
Such persons will strive to maintain the confidentiality of any report to the maximum extent
consistent with fair and rigorous review of the violation. Retaliation against anyone who, in good
faith, reports suspected or known violations is strictly prohibited. You will not suffer any penalty for
reporting, in good faith, any violation. The SDSU AA will conduct a prompt, discreet and objective
review or investigation. Staff or volunteers must recognize that the SDSU AA may be unable to fully
evaluate a vague or general complaint, report or inquiry that is made anonymously.
3. DISCIPLINE
Any violation of this Code is a very serious matter and will result in disciplinary action, up to and
including immediate termination, that will be reasonably designed to deter wrongdoing and to
promote accountability for adherence to this Code.
4. AMENDMENT, MODIFICATION and WAIVER
This Code may only be amended or modified by the Board. Any waiver of this Code for any officer or
director of the SDSU AA may only be made by the Board.
5. LAWS, RULES and REGULATIONS
Each of the SDSU AA’s officers, directors and employees are expected to respect and comply with all
of the laws, rules and regulations of each city, state and country in which the SDSU AA operates.
Although you are not expected to know the details of all of these laws, rules and regulations, it is
important to know enough to determine when to seek advice.
6. CONFLICTS OF INTEREST
The SDSU AA prohibits conflicts of interest. A “conflict of interest” occurs whenever the personal
interest of an officer, director or employee (or a member of the employee’s immediate family)
directly or indirectly conflicts in any way with the SDSU AA’s interest. The SDSU AA’s officers,
directors and employees must be scrupulous in avoiding any action or interest that conflicts with, or
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appears to conflict with, the SDSU AA’s interests. Obviously, the facts in each situation will
determine whether the interest in question is an actual or potential conflict of interest, but a conflict
situation can arise when an officer, director or employee, or a member of his or her family: (a) takes
actions or has interests that may make it difficult to perform his or her work for the SDSU AA
objectively and effectively; (b) receives improper personal benefits as a result of his or her position
with the SDSU AA, whether from a third party or the SDSU AA.
7. CONFIDENTIAL CORPORATE INFORMATION
It is the SDSU AA’s policy that all officers, directors and employees hold in the strictest confidence,
and appropriately safeguard, the SDSU AA’s confidential corporate information.
In terms of the SDSU AA’s confidential corporate information, the SDSU AA’s basic guidelines are as
follows: (a) you must never discuss confidential corporate information with others outside of the
SDSU AA except outside advisors and then only when necessary and appropriate; (b) you must only
discuss confidential corporate information with others within the SDSU AA when required in the
normal transaction of business; and (c) you must guard against accidental disclosure of confidential
corporate information.
This policy is particularly important with respect to customer information that is available to the
SDSU AA’s officers, directors and employees. Our customers expect the SDSU AA to respect their
privacy and to hold their information in the strictest confidence. Therefore, the SDSU AA expects
you to hold this information in the strictest confidence.
8. CORPORATE OPPORTUNITIES
Officers, directors and employees of the SDSU AA must not take for themselves personally
opportunities that are discovered through the use of the SDSU AA’s property, information or
position without the prior consent of the SDSU AA Board. You may not use the corporate property,
information or position for personal gain and you may not compete with the SDSU AA directly or
indirectly. You owe a duty to the SDSU AA to advance its legitimate interests when the opportunity
to do so arises.
9. PROTECTION and PROPER USE OF ASSETS
All officers, directors and employees must endeavor to protect the SDSU AA’s assets and ensure
their efficient use. Theft, carelessness, waste and fraud have a direct impact on the SDSU AA’s
profitability and should be reported immediately. The SDSU AA’s equipment should not be used for
non-SDSU AA business, although incidental personal use may be permitted.
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Your obligation to protect the SDSU AA’s assets includes its proprietary information. Proprietary
information includes the SDSU AA’s intellectual property, such as trade secrets, trademarks, trade
names and copyrights, as well as the SDSU AA’s confidential corporate information, which is
discussed above.
The SDSU AA will provide office equipment and supplies for each of its employees. You should not
use personal items in the performance of your duties. If you need any office equipment, you are
responsible for discussing your needs with your immediate manager.
The sale of assets by the SDSU AA to officers, directors and employees of the SDSU AA is highly
discouraged. Any such sale must be a fair market value.
10. RECORDKEEPING
The SDSU AA requires honest and accurate recording of information in order to provide accurate
reports and make responsible business decisions. All of the SDSU AA’s books, records, accounts and
financial statements must be maintained in reasonable detail, must appropriately reflect the SDSU
AA’s transactions and must conform to both applicable legal requirements and the SDSU AA’s
system of internal controls. Unrecorded or “off the book” funds or assets should not be maintained
unless permitted by laws and not prohibited by the SDSU AA’s policies. All employee business
expense accounts must be documented and recorded accurately.
11. INTERNAL CONTROLS and FRAUD
All officers, directors and employees of the SDSU AA, including, without limitation, the president,
business manager and all other senior officers, are responsible for reporting to our Board of
Directors any concerns that he or she may have regarding (a) significant deficiencies in the design or
operation of internal controls that could adversely affect the SDSU AA’s ability to record, process,
summarize and report financial data; or (b) fraud, whether or not material, that involves
management or other employees, including with limitation, those employees having a significant
role in the SDSU AA’s financial reporting, disclosure or internal controls.
12. PURCHASING
It is the SDSU AA’s policy to purchase all equipment, supplies and services on the basis of quality,
utility and the price offered by the vendor. The purchase of assets by the SDSU AA from officers,
directors and employees is highly discouraged. Any purchase must be at fair market value. Any
purchase over $5,000 required approval by the Board of Directors.
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13. RECORD RETENTION and DOCUMENT DESTRUCTION
The SDSU AA shall retain records for the period of their immediate or current use, unless longer
retention is necessary for historical reference or to comply with contractual or legal requirements.
Records and documents outlined in this policy include paper and electronic files (including email)
regardless of where the document is stored. If an official investigation is underway or even
suspected, document purging must stop in order to avoid criminal obstruction.
In order to eliminate accidental or innocent destruction, the SDSU AA Board of Directors has
adopted the following document retention schedule as recommended by their financial auditor.
a. Retain permanently:
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Annual Financial Statements
Patent Records
Articles of Incorporation and Amendments
Bylaws and Amendments
Pension Records
Company Stocks and Bonds
Certificates
Property Records (including appraisals, plans, spedifications and sales)
Deeds
Tax Returns (estate, gift, and income)
Title Papers
Contracts, Changes and Specifications
Labor Contracts
Governing Board Minutes of Meetings
Copyright and trademark registrations and samples of protected works
Attorney contingent liability letters
Tax Exemption Determination Letter and Related Correspondence
b. Retain for ten years:
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Check Registers
Corporate Contracts
Sales & Use Tax Returns
Franchise Agreements
Workers’ Compensation Reports
c. Retain for seven years:
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Accident Reports
Bank Statements
Options
Checks
Correspondence
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Property Damage Reports
Depreciation Schedules
Employee and Vendor Contracts
Sales Invoices, Slips and Work Records
Payroll Tax Returns
Inventory Records
Uncollectible Accounts Records
Invoices
Leases
Withholding and Exemption
Maintenance and Repaid Records
w-2 Forms
Mortgage Records
Personnel Files
Unemployment Claims
d. Retain for five years:
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Bills of Lading
Fire Damage Reports
Daily Time Reports
Shipping Tickets
Sales Commission Reports
Expense Reports
e. Retain for three years:
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Bank Deposit Slips
Insurance Policies (after expiration)
Bank Reconciliations
Petty Cash Records
Budgets
Delivery Receipts
Receiving Reports
Remittance Statements
Fidelity Bonds
Interim Financial Statements
Requisitions
Surety Bonds
Garnishments
Travel Records
Exceptions to these rules and terms for retention may be granted only by the Organization’s chief staff
executive or Chair of the Board.
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14. PROCESS FOR DETERMINING COMPENSATION
This policy on the Process for Determining Compensation of the SDSU AA applies to the
compensation of the following persons employed by the SDSU AA: (check if applicable)
_X__ the SDSU AA’s chief employed executive1.
____ other Officers2 or Key Employees3 of the SDSU AA by title: (check if applicable; supply titles) None
The process includes all of these elements: (1) review and approval by the board of directors or
compensation committee of the SDSU AA; (2) use of data as to comparable compensation; and (3)
contemporaneous documentation and recordkeeping.
1. Review and approval. The compensation of the person is reviewed and approved by the board
of directors or compensation committee of the SDSU AA, provided that persons with conflicts of
interest with respect to the compensation arrangement at issue are not involved in this review
and approval.
2. Use of data as to comparable compensation. The compensation of the person is reviewed and
approved using data as to comparable compensation for similarly qualified persons in
functionally comparable positions at similarly situated organizations.
3. Contemporaneous documentation and recordkeeping. There is contemporaneous
documentation and recordkeeping with respect to the deliberations and decisions regarding the
compensation arrangement.
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Chief employed executive – The CEO (i.e., Chief Executive Officer), president, executive director, or top management official (i.e., a
person who has ultimate responsibility for implementing the decisions of the Organization’s governing body or for supervising the
management, administration, or operations of the Organization).
2
Officer – A person elected or appointed to manage the Organization’s daily operations, such as a president, vice-president,
secretary or treasurer. The officers of the Organization are determined by reference to its organizing document, bylaws, or
resolutions of its governing body, or as otherwise designated consistent with state law, but at a minimum include those officers
required by applicable state law. Include as officers the Organization’s top management official and top financial official (the person
who has ultimate responsibility for managing the Organization’s finances).
3
Key Employee – An employee of the Organization who meets all three of the following tests: (a) $150,000 Test: receives reportable
compensation from the Organization and all related organizations in excess of $150,000 for the year; (b) Responsibility Test: the
employee: (i) has responsibility, powers, or influence over the Organization as a whole that is similar to those of officers, directors,
or trustees; (ii) manages a discrete segment or activity of the Organization that represents 10% or more of the activities, assets,
income, or expenses of the Organization, as compared to the Organization as a whole; or (iii) has or shares authority to control or
determine 10% or more of the Organization’s capital expenditures, operating budget, or compensation for employees; and (c) Top
20 Test: is one of the 20 employees (that satisfy the $150,000 Test and Responsibility Test) with the highest reportable
compensation from the Organization and related organizations for the year.
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15. JOINT VENTURES
This Joint Venture Policy of the SDSU Alumni Association requires that the Organization evaluate its
participation in joint venture arrangements under Federal tax law and take steps to safeguard the
Organization’s exempt status with respect to such arrangements. It applies to any joint ownership
or contractual arrangement through which there is an agreement to jointly undertake a specific
business enterprise, investment, or exempt-purpose activity as further defined in this policy.
A. Joint ventures or similar arrangements with taxable entities. For purposes of this policy, a
joint venture or similar arrangement (or a “venture or arrangement”) means any joint
ownership or contractual arrangement through which there is an agreement to jointly
undertake a specific business enterprise, investment, or exempt-purpose activity without regard
to: (1) whether the Organization controls the venture or arrangement; (2) the legal structure of
the venture or arrangement; or (3) whether the venture or arrangement is taxed as a
partnership or as an association or corporation for federal income tax purposes. A venture or
arrangement is disregarded if it meets both of the following conditions:
(a) 95% or more of the venture’s or arrangement’s income for its tax year ending within the
Organization’s tax year is excluded from unrelated business income taxation [including but
not limited to: (i) dividends, interest, and annuities; (iii) royalties; (iii) rent from real property
and incidental related personal property except to the extent of debt-financing; and (iv) gains
or losses from the sale of property]; and
(b) the primary purpose of the Organization’s contribution to, or investment or participation
in, the venture or arrangement is the production of income or appreciation of property.
B. Safeguards to ensure exempt status protection. The Organization will: (1) negotiate in its
transactions and arrangements with other members of the venture or arrangement such terms
and safeguards adequate to ensure that the Organization’s exempt status is protected; and (2)
take steps to safeguard the Organization’s exempt status with respect to the venture or
arrangement. Some examples of safeguards include:
(a) control over the venture or arrangement sufficient to ensure that it furthers the exempt
purpose of the organization;
(b) requirements that the venture or arrangement gives priority to exempt purposes over
maximizing profits for the other participants;
(c) that the venture or arrangement not engage in activities that would jeopardize the
Organization’s exemption; and
(d) that all contracts entered into with the organization be on terms that are arm’s length or
more favorable to the Organization.
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