Code of Bylaws - ARTICLE IX - Conflicts of Interest
Section 9.01. Conflicts of Interest. Any duality of interest or possible conflicts of interest on the part of any member of the Board of Directors or Officers of the Foundation shall be fully disclosed to the Audit Committee of the Board and made a matter of record, through an annual procedure.
Section 9.02. Definition. Conflicts of interest arise when an Officer or Director of the Foundation knowingly or intentionally has a pecuniary interest in or derives a profit from any Foundation or University of Southern Indiana contract or purchase. Such an interest includes not only the Officer or Director, but his/her spouse and/or dependant.
Section 9.03. Administration. The Board of Directors shall adopt conflicts of interest policy and disclosure statement, which shall be administered by the Audit Committee of the Foundation, and compliance shall be a condition of membership on the Board of Directors or as an Officer of the Foundation.
Section 9.04. Abstention from Voting. Any member of the Board of Directors having a conflict of interest or a possible conflict of interest on any matter shall not vote or use their personal influence on the matter. Where such occasion arises, the minutes of the meeting shall reflect that a disclosure was made and the Director abstained from voting.
Section 9.05. New Board Members Advisement of Policy. All new members of the Board shall be advised of this policy upon entering on the duties of his/her office.
CONFLICTS OF INTEREST: COMPLIANCE DISCLOSURE REQUIREMENTS
SUMMARY
The purpose for which the University of Southern Indiana Foundation "Foundation" is organized, as stated in the Foundation's Articles of Incorporation, is to provide support for the University of Southern Indiana, its faculty and students and to promote educational, scientific, charitable and related activities and programs exclusively for the benefit of the University of Southern Indiana. The University of Southern Indiana is a body politic of the State of Indiana and as such is subject to conflicts of interest laws adopted by the General Assembly in the State of Indiana. To be consistent with the controlling law affecting the University of Southern Indiana, the Board of Directors of the Foundation has adopted the following Conflicts of Interest Policy, adherence to which as a condition of office for each officer and director of the Foundation.
SCOPE OF REQUIREMENTS
The Indiana General Assembly enacted "Conflicts of Interest" law, in I.C. 35-44-1-3, which provides:
"The public servant who knowingly or intentionally:
(1) has a pecuniary interest in; or
(2) derives a profit from:
a contract or purchase connected with an action by the government entity that he serves, commits a conflict of interest, a Class D felony."
The Act provides a method by which "public servants" can avoid the criminal aspects of the "Conflicts of Interest" law by filing a disclosure statement. "Public servants" as defined are required to file disclosure statements to any "pecuniary interest in or deriving a profit from a contract or purchase" connected with the entity served. A "pecuniary interest" in a contract or purchase will result or is intended to result in an ascertainable increase in the income or net worth of the public servant or a dependant of the public servant who is under direct or indirect administrative control of the public servant or receives a contract or purchase order that is received, approved, or directly or indirectly administered by the public servant. While the Foundation, its officers and directors are not statutory public servants, nonetheless, such disclosures must be filed with the Board of Directors of the Foundation, stating any financial interest which the officers or director may have in any Foundation or University of Southern Indiana University contract or purchase. The Board, through its Audit Committee of the Board of Directors must then decide whether to approve such interest.
WHO IS COVERED?
This disclosure requirement applies to all Foundation Board of Directors and Officers of the University of Southern Indiana Foundation. This disclosure requirement does not apply to Directors Emeriti and Advisory Council members.
INTEREST TO BE DISCLOSED
In the interest of safety, if a doubt exists as to what is a "pecuniary interest," in a contract or purchase, a disclosure statement should be filed.
(a) It appears that the terms "financial interest" and "pecuniary interest" would not include the mere ownership of small amounts of stock in large publicly-owned corporations with which the Foundation or the University of Southern Indiana does business. Thus, no disclosure is required. However, if any officer or director, or his/her spouse and/or dependant, does own stock in such a corporation, and if the officer or director is aware that the corporation makes sales to or does business with the Foundation or the University of Southern Indiana, he/she may opt to make a disclosure voluntarily.
(b) The terms "financial interest" and "pecuniary interest" would certainly include any ownership interest in a smaller business or corporation, where a contract or sale to the Foundation or University of Southern Indiana would be expected to have some direct effect on the owner's interest. Disclosure of any such interest, held by officer or director or his/her spouse and/or dependant, must be made.
(c) The terms "financial interest" and "pecuniary interest" could also mean creditor's interest. If the Foundation officer or director, or his/her spouse and/or dependant, have made a loan to, or guaranteed an obligation of, a person or corporation who is doing business or seeking to do business, with the Foundation or University of Southern Indiana, disclosure of such interest must be made.
(d) A person who is a paid officer, director, employee or consultant of a corporation, whether it be large or small, and knows of business being done by the corporation with the Foundation or University of Southern Indiana, would be considered to have a "financial" or "pecuniary" interest in the particular contract or purchase, by reason of the salary or fees from the corporation. A disclosure of all such interest must be made.
PROCEDURES TO BE FOLLOWED
The “Conflict of Interest” disclosure statements are made available for review and signature annually in September at the first Board of Directors’ meeting each fiscal year. Responsibility for the filing of disclosure statements rests on each officer and director of the Foundation. A disclosure should be filed annually.
Administration of the "Conflicts of Interest" filing is handled by the President of the Foundation.
Copies of the conflicts of interest disclosure statements may be obtained from the Foundation office. The completed form is to be returned to the President of the Foundation.
The President of the Foundation will provide the Audit Committee a summary report at the fall Audit Committee meeting. All potential conflicts of interest will be reviewed and final approval given by the Audit Committee of the Foundation Board of Directors, which accordingly will evaluate specific situations disclosed. If the Audit Committee of the Board of Directors finds it involves a conflict of interest which, in its opinion, would be unlawful, or detrimental to the Foundation, the officer or employee involved will be required to discontinue or divest himself/herself of the outside interest creating the conflict or resign from the Foundation Board of Directors.
Questions concerning conflicts of interest and the statutory requirements should be referred to the President of the Foundation. Appropriate legal advice will be provided when necessary.