Established: April 2, 1991
Last Updated: August 3, 2012
Related Policies, Guidelines & Procedures:
1. Financial Conflict of Interest Implementation Procedures for U.S. Public Health Service and National Science Foundation Funded Research
A conflict of interest, or a potential conflict of interest, exists when a member of the University is or may be in a position to use research, knowledge, authority or influence for personal or family gain or to benefit others to the detriment of the institution.
2. General Philosophy and Procedures
The University acknowledges a commitment, as part of its overall mandate, to transfer knowledge, discoveries and technology to society for its benefit. Interaction of members of the University with external entities is desirable and encouraged when the activity is beneficial to the professional standing of the individual, the reputation of the University or provides a community or professional service. Whatever the nature of the external activities or relationships, the University expects each of its members - faculty, staff, student or officer - to act in a manner consistent with a high standard of integrity and ethical behavior. Accordingly, the University of Waterloo obligates its members and officers acting on its behalf to avoid ethical, legal, financial or other conflicts of interest which may impede or compromise their University responsibilities or the mission of the institution.
This policy is meant to protect both the individual and the institution. Its fundamental tenet is that members should, of their own volition, take the initiative in disclosing conflicts or potential conflict of interest situations. The mere existence of a conflict or a potential conflict does not necessarily imply that the activity concerned should cease. Indeed, conflicts may cover a broad spectrum from those that are minor and easily controlled to those whose consequences could be very serious. There are situations sufficiently complex that judgments may differ as to whether a conflict exists. Accordingly, any member of the University community with a conflict or potential conflict should seek the counsel and advice of her/his immediate supervisor and disclose the details to that individual. A disclosure form (see next page) is available for this purpose.
The immediate supervisor (in consultation with her/his supervisor, when appropriate) will determine whether a conflict, real or potential, exists. In the event that a conflict exists or will exist, the immediate supervisor and the member will agree on a course of action to monitor or avoid the conflict, after which written documentation of the agreement will be held by both the member and her/his immediate supervisor. In the event that agreement cannot be reached, the case will be referred through the appropriate line management channels for resolution, up to and including the Vice-President, Academic & Provost, if necessary.
It is assumed that those with academic or employment supervisory authority who detect what they believe to be violations of this policy will act promptly to provide or initiate the appropriate remedial or disciplinary measures as set out in other University policies, procedures and agreements (including 18, 33, 36, 62, 71 and the Memorandum of Agreement).
The following list of examples, while not comprehensive, is illustrative of situations which may lead to an indirect or direct conflict of interest:
Favoring of Outside Interests for Personal Gain:
- Entering into a research contract with a company in which the faculty or staff member, or a member of her/his immediate family, has a financial or other interest.
- Directing the faculty member's government sponsored research program to serve the research or development needs of a private firm in which the faculty member has a financial or other interest.
Influencing the purchase of equipment or materials for the University from a company in which the faculty or staff member has a financial or other interest.
- Accepting significant gifts or special favors for personal gain from private organizations with which the University does business.
- Entering into a licensing agreement for the development of intellectual property, generated as a result of University research, with a company in which the faculty or staff member has a financial or other interest.
Inappropriate Use of University Personnel, Resources or Assets:
- When a supervising faculty or staff member uses University students or staff on University time to carry out work on her/his own behalf for a company in which he/she has a financial or other interest.
- Unauthorized and non-reimbursed use of University resources or facilities to benefit a private concern in which the faculty or staff member has a financial or other interest.
Inappropriate Use of Information:
- Using for personal gain, or other unauthorized purposes, privileged information acquired as a result of the faculty or staff member's University-supported activities; such information might include knowledge of forthcoming developments requiring contractor or sub-contractor selection, bulk purchases, etc.
- Unreasonably delaying publication of research results (e.g., thesis research) or premature announcement of research results to secure personal gain.
Conflict of Commitment:
- Undertaking external consulting, professional or other activities which, by virtue of their time commitment, prevent the faculty or staff member from fulfilling her/his obligations to the University.
- Involvement in external organizations which bring a faculty or staff member into a position of divided loyalty between the mission of the University and the interests of the external organization.
Inappropriate Involvement in Appointment Processes:
- Participating in the appointment, promotion or hiring of a person with whom the faculty or staff member has a marital, familial or sexual relationship.
University of Waterloo Conflict of Interest Disclosure Form (PDF)
ORE Researcher Declaration and Conflict of Interest Disclosure Form (PDF)
Background re: development of guidelines and procedures on conflict of interest
The potential for conflict of interest has always existed in university communities because of the diverse interactions of faculty, staff and graduate students with external organizations. However, the increasing complexity of society and the changing role of universities in that society, the multiplicity of interuniversity, university-industry and university-community relations have created a new awareness of the need for guidelines concerning conflict of interest. Few will argue that while the basic mandate of universities - education, research and scholarship, and public service - remains, each institution is struggling to define its own distinctive role and to cope with the reality of a new financial environment. Rapid developments in science and technology over the past two decades, and the realization that transfer of technology from universities to the private sector can contribute significantly to international competitiveness, have generated pressures and financial incentives to engage in cooperative research ventures, consulting or external business relationships. More than ever before, faculty, staff, graduate students and administrators are being asked to engage in a diverse range of economic development activities which carry the potential for conflict of interest. Unless such conflicts are identified and monitored, the very essence of the university mission may be compromised.
Defining Conflict of Interest
Conflicts of interest may be individual or institutional. An individual conflict can be defined as any external activity or undertaking which places an individual in a position which:
- influences University research, education or business for personal gain, or
- interferes with or prevents the discharge of her/his University responsibilities, as defined by the individual's employment contract; this is, in reality, a conflict of commitment.
The overall thrust of this definition is that the best interests of the University may be compromised to the personal benefit of the individual employee.
Individual conflicts of interest often derive directly or indirectly from opportunities to participate in externally funded research and in a subsequent interplay between the results of the research and a faculty member's personal or financial interests. Such situations frequently place faculty and staff members in a position to manage contracts, select equipment and supplies, involve graduate students in sponsored research or play administrative roles which demand the utmost in integrity and honesty. Even the appearance of an apparent conflict can have a negative impact on the University and the individual in the eyes of the community.
Institutional conflicts of interest may occur when the University enters into contractual relationships with external bodies, usually private corporations but sometimes government agencies, which bring it into potential conflict with its mandate, with the personal activities of its Board of Governors or even its status as an educational institution. These potential institutional conflicts must be monitored by its governing bodies.
In drafting a conflict of interest policy for the University, the Committee was cognizant of both the positive and negative aspects of that part of the University's mission which can be described as "service to society". On the one hand, the University has an implicit obligation to transmit knowledge and the results of research to society for its benefit. On the other hand, the financial incentives and pressures to contribute to economic and societal well-being have, in the minds of some, distorted University priorities and led to an erosion of autonomy and independence. In this changing environment, it is of paramount importance that the institution have in place a code of ethics which obligates its faculty, staff, students and officers acting on its behalf to avoid ethical, financial or legal conflicts which prejudice the best interests of the University. Thus, a policy on conflict of interest should be an integral component of an entire matrix of policies on ethical behavior in general at the University of Waterloo.
Clearly, defining the entire spectrum of potential conflict of interest situations, both;individual and institutional, would be a daunting task. Furthermore, the generation of an exhaustive list of restrictions designed to eradicate conflicts would most certainly compromise the ability of the University to create an environment conducive to the discovery and dissemination of knowledge, the search for truth and understanding, the quality of life and the needs of society. The Committee became convinced that the best interests of the institution would not be served by a restrictive "do not" policy. Such a rigid approach would run counter to the freedom to innovate and the spirit of entrepreneurship which have characterized the University of Waterloo throughout its brief history. Accordingly, the Committee opted for the disclosure route in defining a conflict of interest policy.
Identifying Potential Conflict Situations
One of the keys to any conflict of interest policy relying on disclosure is the ability of individual employees in the institution to recognize possible conflict of interest situations so that they can, in good faith, be recorded and managed. The Committee felt that it would be very useful to provide a list of situations which maybe of concern in order to alert employees to potential problem areas. This list can be found in the "Examples" section of the policy on Conflict of Interest.
Statements pertaining to conflict of interest situations are contained in other UW policies, including: 33 (Ethical Behaviour); 40, 44, 45, 48, 50 and 68 (re Academic Administrators); 41 (Contract Research at the University of Waterloo); 49 Extra-University Activity (Faculty Member); 52 (Private Corporations); 62 (Conflict of Interest in Employment & Supervision of Personnel); 66 (Use of University Resources and Affiliation); 77 (Tenure and Promotion).
Appendix A – United States’ Public Health Service and National Science Foundation Funded Research
Financial Conflict of Interest Requirements
Any Investigator who is planning to participate in, or who is participating in Public Health Service (PHS) funded research shall undergo training with regard to the applicable regulations and institutional procedures.
Any Investigator who is planning to participate in, or who is participating in, research funded by the PHS or the National Science Foundation (NSF) shall disclose to the Office of Research all Significant Financial Interests (defined below) of the Investigator and the Investigator’s spouse and dependent children at or before submission of an application, at least annually during the period of the award and within 30 days of discovering or acquiring a new Significant Financial Interest. The Vice-President, Research and International is responsible for ensuring that there are appropriate Implementation Procedures in place for the review of all such disclosures to determine whether there is a financial conflict of interest and for managing, reporting and monitoring any such conflict of interest.
“Investigator” is defined as follows:
The project director or principal investigator and any other person, regardless of title or position, who is responsible for the design, conduct, or reporting of U.S. Federally-funded research, or proposed for such funding, which may include, for example, co-applicants, collaborators or consultants.
“Significant Financial Interest” is defined as follows:
(1) A financial interest consisting of one or more of the following interests of the investigator (and those of the Investigator’s spouse and dependent children) that reasonably appears to be related to the Investigator’s institutional responsibilities:
(i) With regard to any publicly traded entity, a significant financial interest exists if the value of any remuneration received from the entity in the twelve months preceding the disclosure and the value of any equity interest in the entity as of the date of disclosure, when aggregated, exceeds $5,000. For purposes of this definition, remuneration includes salary and any payment for services not otherwise identified as salary (e.g., consulting fees, honoraria, paid authorship); equity interest includes any stock, stock option, or other ownership interest, as determined through reference to public prices or other reasonable measures of fair market value;
(ii) With regard to any non-publicly traded entity, a significant financial interest exists if the value of any remuneration received from the entity in the twelve months preceding the disclosure, when aggregated, exceeds $5,000, or when the Investigator (or the Investigator’s spouse or dependent children) holds any equity interest (e.g., stock, stock option, or other ownership interest); or
(iii) Intellectual property rights and interests (e.g., patents, copyrights), upon receipt of income related to such rights and interests.
(iv) Any reimbursed or sponsored travel (i.e., that which is paid on behalf of the investigator and not reimbursed to the investigator so that the exact monetary value may not be readily available).
(2) The term significant financial interest does not include the following:
(i) salary, royalties, or other remuneration paid by the Institution* to the Investigator if the Investigator is currently employed or otherwise appointed by the Institution, including intellectual property rights assigned to the Institution and agreements to share in royalties related to such rights;
(ii) any ownership interest in the Institution held by the Investigator, if the Institution is a commercial or for-profit organization;
(iii) income from investment vehicles, such as mutual funds and retirement accounts, as long as the Investigator does not directly control the investment decisions made in these vehicles;
(iv) income from seminars, lectures, or teaching engagements sponsored by a federal, state, or local government agency, an institution of higher education as defined at 20 U.S.C. 1001(a), an academic teaching hospital, a medical center, or a research institute that is affiliated with an institution of higher education;
(v) income from service on advisory committees or review panels for a federal, state, or local government agency, an institution of higher education as defined at 20 U.S.C. 1001(a), an academic teaching hospital, a medical center, or a research institute that is affiliated with an institution of higher education; or
(vi) travel that is reimbursed or sponsored by a federal, state, or local government agency, an institution of higher education as defined at 20 U.S.C. 1001(a), an academic teaching hospital, a medical center, or a research institute that is affiliated with an institution of higher education.
*Institution means any domestic or foreign, public or private, entity or organization (excluding a Federal agency) that is applying for, or that receives, U.S. Federal research funding.
Modifications to Appendix A – Endorsed by FRC (05-11-20) and SRC (09-11-20)