CONFLICTS OF INTEREST
(d) Related Entity. A “related entity” means a corporation, partnership,
association or other entity where the Trustee or family member serves as an officer, director,
partner or employee; expects to receive $5,000 or more in compensation for services in a
calendar year; holds any equity in a non-publicly traded entity; or holds an interest of 5% or
more in a publicly traded entity.
(e) Known. “Known” means that the Trustee has actual knowledge of the
conflict of interest.
Section 8.04 Recusal. If a matter in which a Trustee has a known conflict of
interest comes before the Board for discussion or decision, the interested Trustee shall leave the Board meeting while the matter is discussed and voted upon. The Trustee’s interest and recusal shall be noted in the minutes, which shall be publicly available.
Section 8.05 Contracts or Transactions with the University.. (a) A contract or transaction between the University and a Trustee, family member or an entity in which a Trustee or family member has a beneficial interest of ten percent (10%) or more and the
contract or transaction is valued at $10,000 or more must be approved by the Board of Trustees
in accordance with this Section. The University official responsible for the matter must first
conclude that it is in the best interests of the University to consider entering into such a contract
or transaction. In circumstances where the Trustee, family member or related entity is
purchasing goods or services from the University, as opposed to selling such goods or services,
the matter is presumptively in the University’s interests if the price is fair and reasonable and the
contract or transaction does not foreclose a similar transaction with another individual or entity.
In other circumstances where the University is purchasing goods or services, the officer must
first explore alternatives that do not involve an interest of the Trustee, family member or entity in
which the Trustee or family member owns a beneficial interest of ten percent (10%) or more. If,
after exercising such due diligence, the official determines that it is in the best interests of the
University to proceed, the matter must be submitted to the Board for approval. The written
materials submitted to the Board shall include a description of the contracting process, including
the use of open and public bidding if possible and practical, and the official’s analysis of why it
is in the best interests of the University to proceed with the agreement or relationship. The
interested Trustee shall leave the meeting during the discussion and voting. The Board shall
determine by a majority vote of the disinterested Trustees whether the transaction or arrangement
is in the University’s best interests, the price and value provided are fair and reasonable to the
University and whether to approve the transaction or arrangement. Any such decision shall be
recorded in the minutes, which shall be publicly available.
(b) Contracts or transactions of less than $10,000 between the University and a Trustee,
family member or an entity in which the Trustee or a family member has a beneficial interest of
ten percent (10%) or more will be disclosed to the Board of Trustees annually in a written report
which shall be available to the public. The report shall include a certification by the appropriate
officers of the University that such contracts or transactions were made in the normal course of
business and were fair to the University.
Section 8.06 Annual Statements. Each Trustee shall annually sign a
statement that affirms that such Trustee (a) has received a copy of the Board’s conflict of interest
policy as expressed in this Article VIII, (b) has read and understands the policy, and (c) has
agreed to comply with the policy.
Section 8.07 Fiduciary Duty. Members of the Board of Trustees stand in a
fiduciary relationship to the University which reposes special confidence in each member.
Members of the Board of Trustees shall act in good faith, with due regard to the interests of the
University, and shall comply with the fiduciary principles of conduct in addition to any other
state or federal requirements. Trustees bring to their roles varied backgrounds and expertise, and
they are selected in different ways, but they must keep the welfare of the entire University, not
just a particular constituency, at all times paramount.
Section 8.08 Misuse of Information. No member of the Board of Trustees
shall for personal gain or benefit or for the gain or benefit of others use any information not
available to the public at large and obtained as a result of service to the University.
Section 8.09 Gifts and Favors. No member of the Board of Trustees shall
solicit or accept for personal use or for the use of others any gift, loan, gratuity, reward, promise
of future employment or any other thing of monetary value based on any understanding that the
vote, official action or judgment of the member would be influenced thereby.
Section 8.10 Pre-Existing Contract or Transaction. A contract or
transaction that would be required to be disclosed under this Article but which was entered into
before the interested Trustee assumed office, or which became subject to this Article as a result
of amendments to the Article, and which remains to be performed in whole or in part, shall be
disclosed by the Trustee pursuant to Section 8.03 but is not subject to the voting and other
requirements of this Article.
Section 8.11 Family Members as Employees. A record of all spouses or
dependent children of Trustees who are employed by the University or an affiliated entity and
where compensation exceeds $10,000 per year shall be maintained in the Office of the Board of
Trustees and the names and positions but not the amount of compensation shall be posted on the
Section 8.12 Employment of Trustees. No Trustee may be employed by the
University in any capacity before the fifth (5th) anniversary of the date on which such person l
served as a Trustee, except as approved by action of the Board of Trustees.
Section 8.13 Disclosure of Potential Conflict of Interest by Employees of
the University. Employees of the University shall exercise the utmost good faith in all
transactions touching upon their duties to the University and its property. In their dealings with
and on behalf of the University, they shall be held to a strict rule of honest and fair dealings
between themselves and the University. They shall not use their positions, or knowledge gained
therefrom, in such a way that a conflict of interest might arise between the interest of the
University and that of the individual. Employees shall disclose to the administrative head of the
college or other unit in which they are employed, or other appropriate superior officer, any
potential conflict of interest which they are aware before a contract or transaction is
consummated. This bylaw shall be published to the University community at least once
annually.
Section 8.14 Consultation. Any Trustee or University official may consult
with the Secretary of the Board or the University General Counsel concerning the interpretation
or application of any of the provisions of Article VIII
PSU Ethics HOTLINE 800-560-1637
Call to Report BOT Conflicts of Interest
Pretty pedestrian stuff, but I hope that they have the staff to investigate reports by over zealous reporters and those with axes to grind. PSU may have opened Pandora's box. I would estimate that over 50% of reports made will be totally unfounded. We had a case here of a Branch Head being accused of child molestation by his ex wife. By the time the DA and JAG determined that the accusation was false and malicious, significant damage was done to the person's career. He ended up transferring to another base. His ex disappeared into the woods.
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