Ethics and Conflict of Interest Policy for the UW System Board of Regents

Scope

This policy establishes procedures for the Board of Regents to use to identify, disclose, and manage potential conflicts of interest.

Purpose

The Board of Regents of the University of Wisconsin System (Board) recognizes that a Regent is required to comply with applicable provisions of Wisconsin law regarding ethics and conflicts of interest, including the “Code of Ethics for Public Officials and Employees” in Chapter 19 of the Wisconsin Statutes, and s. 36.23, Wis. Stats., which relates to conflicts of interest for Board members. To further enhance the credibility and accountability of the Board, the Board adopts the following ethics and conflict of interest policy. This policy shall not be construed to require compliance by Regents that is in addition to or different from compliance required under applicable state law except as expressly stated in paragraph 10 of the Protocol section of this policy.

Definitions

Anything of value is defined in s. 19.42(1), Wis. Stats., as “any money or property, favor, service, payment, advance, forbearance, loan, or promise of future employment, but does not include compensation and expenses paid by the state, fees and expenses which are permitted and reported under s. 19.56, political contributions which are reported under ch. 11, or hospitality extended for a purpose unrelated to state business by a person other than an organization.”

Associated is defined in s. 19.42(2), Wis. Stats., as, “when used with reference to an organization, includes any organization in which an individual or a member of his or her immediate family is a director, officer, or trustee, or owns or controls, directly or indirectly, and severally or in the aggregate, at least 10 percent of the outstanding equity or of which an individual or a member of his or her immediate family is an authorized representative or agent.”

Gift is defined in s. 19.42(6), Wis. Stats., as “the payment or receipt of anything of value without valuable consideration.”

Immediate family of a Regent is defined in s. 19.42(7), Wis. Stats., as “an individual’s spouse [or] relative by marriage, lineal descent or adoption who receives, directly or indirectly, more than one-half of his or her support from the individual or from whom the individual receives, directly or indirectly, more than one-half of his or her support.” There may be other family members as to whom disclosure should also be made to avoid an apparent conflict, and doubts should be resolved in favor of disclosure.

Organization is defined in s. 19.42(11), Wis. Stats., as “any corporation, partnership, proprietorship, firm, enterprise, franchise, association, trust or other legal entity other than an individual or body politic.

Policy Statement

As public officials, Regents hold their positions as a public trust and are obligated to fulfill their responsibility in a manner consistent with this charge. All decisions of the Board and the Board’s individual members must be made in good faith, with diligence and care, in a manner reasonably believed to be in the best interests of the University of Wisconsin System (UW System), and with due regard for the UW System’s reputation. It is therefore the policy of the Board that Regents have an affirmative duty to identify, disclose, and manage conflicts in conformance with this policy and the law.

Conflicts of Interest

A conflict arises when there is a direct or indirect potential, apparent, or actual divergence between a Regent’s private interests and his or her fiduciary duties as a Regent. Conflicts may affect non-financial as well as financial Regent interests. A Regent may be personally involved in a proposed transaction, have an employment, fiduciary, or investment relationship with an organization with which the University is dealing, or have a family relationship with a person or organization with which the University is engaged.

For purposes of this policy, a conflict of interest arises where the relevant material facts affect a Regent, a member of his or her immediate family, or an organization with which a Regent is associated. In the case of conflicts involving a member of the Regents’ immediate family or an organization with which a Regent is associated, the Regent is obligated to make disclosure when he or she knows or reasonably should know of a conflict.

An apparent conflict exists when a reasonable person would conclude from the circumstances that a Regent’s ability to discharge his or her duties as a Regent is compromised.

It is not possible to provide an all-inclusive list of situations giving rise to a conflict of interest. In general, Regents may not use their positions or confidential information to which they become privy as Regents for the gain of themselves or others. Below are examples of situations presenting potential, actual, or apparent conflicts of interest.

Commercial Transactions. The UW System may not engage in commercial transactions, such as contracting for goods or services, with a Regent; with a member of a Regent’s immediate family; or with any organization with which a Regent is associated unless all of the following conditions are met:
1. The Regent has appropriately disclosed the economic interest to the Wisconsin Ethics Commission to the extent required under s. 19.45 (6), Wis. Stats.
2. The proposed transaction is conducted through appropriate UW System procurement processes; and
3. The Board of Regents determines the proposed transaction is in the best interest of the UW System and the Board approves the transaction. Examples of when such a contract might be in the best interest of the UW System include situations wherein it has financially advantageous terms, the goods or services to be provided are demonstrated to be unique, or the contract is a continuation of a contract that was previously in effect.
Confidential, Proprietary, or Privileged Information. Except as required by law, no Regent may, without proper Board authorization, give or release UW System information or data of a confidential, proprietary, or privileged nature, or use such information to gain personal advantage or avoid personal detriment, insofar as such information is not in the public domain. This rule applies to Regents during and after their service as Regents relative to information acquired in the course of their Regent appointment.
Business Opportunities. No Regent may divert from the UW System for private gain of self or others a business opportunity in which the UW System would foreseeably engage in furtherance of its mission, unless the UW System has been offered, and through an authorized official declined, a right of first refusal.
Regent Employment with UW System. Except under extenuating circumstances as determined by a two-thirds (2/3) majority of the Board, no Regent may enter into compensated employment with the UW System while the individual is a Regent and for a period of one year after leaving the Board. This prohibition does not apply to student Regents who wish to engage in part-time University employment during their Regent appointment, subject to the conflict of interest disclosure rules otherwise stated in this Policy.
Employment or Retention of Immediate Family Members or Associated Organizations. No Regent may be directly or indirectly involved in the hiring, supervision, performance evaluation, compensation, or retention for personal or business services by the UW System of an immediate family member or an organization with which the Regent is associated.
Remuneration, Honoraria, Gifts, and other Consideration
1. From External Parties. No Regent may solicit or accept from any person or organization (or representatives thereof) seeking to do or doing business with or otherwise gain benefit from the UW System any gift or anything of value in exchange for a promise or reasonable inference that the Regent’s influence with the UW System has been exchanged for such consideration. This prohibition applies without limitation to vendors, contractors, sponsors, donors, and job or admissions applicants.
2. From the University. It shall not be considered a conflict of interest for a Regent to accept from the UW System:
  1. Gifts or anything of value in consideration of his or her service as a Regent;
  2. Customary honoraria;
  3. Reasonable reimbursement for travel, food, or lodging for expenses incurred in connection with UW System business pursuant to applicable UW System policy and procedures; or
  4. Complimentary tickets for a Regent and his or her guest at UW System sporting events, plays, concerts, or similar university functions when the presence of the Regent and his or her guest for friend raising or fundraising is deemed to serve the best interests of the UW System.
3. From External Parties or the University. No Regent may solicit or accept any fee or honorarium, except as expressly permitted by s. 19.56, Wis. Stats., offered in return for a speech or appearance or article made or written in the individual’s official capacity as a Regent. Reasonable and necessary expenses reimbursed to the Regent for participation in such an event are permissible subject to applicable UW System policies and procedures.
Employment of University Personnel. A Regent wishing to employ or retain a UW System employee for private consulting or other non-University purposes must first obtain from the UW System General Counsel or the Wisconsin Ethics Commission an opinion as to whether such engagement does, or may, give rise to a conflict of interest. If the General Counsel or the Wisconsin Ethics Commission conclude that a conflict does, or may, arise, the Regent shall disclose the proposed employment or consulting arrangement to the Board Chair. The Board Chair shall either authorize or decline to authorize the proposal, conferring with the Executive Committee in his or her discretion. If the proposal is authorized, the Chair shall communicate the authorization in writing to the Regent, with a copy to the General Counsel.
Testimony. A Regent who testifies in person or through recorded or written communication before any public body or public official, whether judicial, legislative, or administrative, shall make it initially and clearly known on the record when she or he is speaking on the matter as a UW System representative. Regents shall obtain authorization to speak on behalf of the UW System by means of customary governance protocols, including but not limited to prior approval from the Board Chair.
Political or Appointive Office. The constituency of each Regent is the UW System, regardless of the source of appointment. Regents whose service on the Board is incidental to elective or appointive office shall engage in such service with due regard for the fiduciary duties of a Regent, and in a manner consistent with this Policy.
Foundation. No Regent, member of a Regent’s immediate family or any organization with which a Regent is associated may, without proper Board authorization, obtain anything of value from any real property in which a Foundation that supports any UW System institution has a financial ownership interest.

Protocol

Reporting Economic Interests. As required under s. 19.43, Wis. Stats., upon nomination or appointment and annually thereafter, each member of the Board of Regents shall file a Statement of Economic Interests Form with the Wisconsin Ethics Commission. The Board of Regents Office shall obtain a copy of each Regent’s Statement of Economic Interests to assist the Board with efforts to identify potential conflicts of interest.
Identifying potential conflicts of interests. Each Regent is responsible for identifying and disclosing any potential conflict of interest he or she may have with an agenda item under consideration by the Board. To assist with this process, prior to each Committee and Board meeting, the UW System General Counsel, in consultation with the Board of Regents Office, shall review the agenda for the meeting in relation to Regents’ Statements of Economic Interest to determine whether a conflict may arise. If the review identifies a potential conflict, the General Counsel shall contact the Regent with the potential conflict and the Committee or Board Chair regarding the relevant agenda item. If it is determined that an actual conflict exists, the Regent and the Committee or Board Chair shall manage the conflict as required under this policy. This review supplements, but does not replace, the responsibility of each Board member to identify and manage any conflict of interest he or she may have with an agenda item.
Disclosure. In advance of any meeting of the Board or one of its Committees at which a conflict may foreseeably arise, a Regent with a potential conflict shall disclose the conflict to the Committee or Board Chair. The disclosure shall describe the conflict, along with any material facts related to the conflict, including:
1. The benefits that could inure to the Regent;
2. The extent to which, if any, the Regent is participating in a competitive process to enter into a transaction or business affiliation with the UW System;
3. Whether the Regent is privy, in his or her capacity as a Regent, to proprietary or other non-public UW System information that could be advantageous to the Regent in relation to other parties interested in a proposed transaction;
4. Whether the UW System would be likely to enter into the proposed transaction or relationship in the absence of the Regent’s UW System affiliation;
5. Any other facts determined to be relevant for describing and assessing the conflict.
Evaluating a Potential Conflict. The Regent, Committee Chair, or Board Chair may request an opinion on the existence of a conflict from the UW System General Counsel or the Wisconsin Ethics Commission. In the event that a Board Chair or a Committee Chair conflict is in issue, the disclosure shall be made to the Vice Chair, who may also request an opinion from the General Counsel or the Wisconsin Ethics Commission.
Managing a Conflict of Interest. Upon a determination that an apparent conflict of interest, but no actual conflict of interest, exists, a Regent may decide whether to decline to participate in discussion of, and any vote upon, the matter as to which a conflict exists. If a Regent so declines, the meeting record shall reflect his or her recusal and abstention. If it is determined that a Regent has an actual conflict of interest, the Regent shall disclose the conflict to the Board and shall refrain from participating in the matter to which the conflict relates. The meeting record shall reflect the disclosure and the Regent’s recusal and abstention.
Complaint Procedure. Complaints of non-compliance with this policy shall be filed promptly and in writing with the President of the Board, with copies to the Executive Director and Secretary of the Board. The Board President shall be responsible for ensuring complaints are appropriately addressed.
Conflict of Interest Training. Newly appointed Regents shall be provided ethics and conflicts of interest training, and the Board periodically shall be provided training in this area.

Oversight, Roles, and Responsibilities

Each Regent shall be responsible for complying with all laws and policies relating to conflicts of interest, including identifying and disclosing potential conflicts of interest to the Board of Regents using the procedures identified under this policy, and for filing the Statement of Economic Interests Form with the Wisconsin Ethics Commission as required under s. 19.43, Wis. Stats.

The UW System General Counsel shall provide advice and counsel about a potential conflict of interest upon request of any Regent, Committee or Board Chair, or Vice Chair acting on behalf of a Committee or Board Chair with a potential conflict. Any public official may also seek a formal opinion about a conflict of interest from the Wisconsin Ethics Commission.

The Board of Regents Office and the UW System General Counsel shall be responsible for implementing procedures for routinely reviewing Board agendas to identify potential conflicts of interest and for assisting Regents in notifying the Board about potential conflicts of interest.

Regent Policy Document 2-4