Annex C - Conflict of Interest Policy Framework
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Interactions between university researchers and the private sector are
an essential feature of the NCE program. For the objectives of the NCE
program to be achieved, many kinds of interactions among individuals participating
in the network must occur. These interactions may lead to gains and benefits
to the individuals participating in the network and are desirable and
natural outcomes of being involved in the network. Such interactions,
however, may place individuals participating in the network in a position
of potential, apparent or actual conflict of interest.
The NCE Steering Committee is the body ultimately responsible to the
government, and therefore to taxpayers, for the integrity of all the networks
and their operations. The responsibility for implementing and managing
the Conflict of Interest Policy Framework, to ensure that network operations
and decisions are not biased by conflict of interest, is delegated to
each Network Board of Directors, which represents the highest authority
in the management structure of the network. The Network Boards of Directors
are accountable to the NCE Steering Committee for the effective implementation
and management of the Conflict of Interest Policy Framework.
Individuals participating in the network such as members of the Boards
of Directors and advisory committees who do not receive NCE funds are
recognized as playing a unique role in the networks. They bring an important
perspective as a result of their particular knowledge, often as representatives
of organizations in the field of interest of the network. Nevertheless,
they are still required to disclose any financial interest or position
of influence, as described in Section 2.0, in any business in the same
area of interest as the network, other than that of their main employer.
The Conflict of Interest Policy is intended to enable Network Boards
of Directors and individuals to recognize and disclose situations that
may be open to question and to ensure that such situations are appropriately
resolved. The policy builds upon and is complementary to those of the
organizations that make up the Network Boards of Directors, the network
investigators and of the administrators.
1.0 Definitions
"Avoidance" means refraining from, or withdrawing
from, participation in activities or situations that place an individual
participating in the network in a potential, apparent or actual conflict
of interest relative to his or her network duties and responsibilities.
"Conflict of interest" means a situation
where, to the detriment or potential detriment of the network, an individual
is, or may be, in a position to use research knowledge, authority or influence
for personal or family gain (financial or other) or to benefit others.
"Disclosure" means the act of notifying in
writing the Board of Directors, through the Network Manager, of any direct
or indirect financial interests and positions of influence held by an
individual participating in the network which could lead to a potential,
apparent or actual conflict of interest.
"Divestment" means the sale at arm's length,
or the placement in trust, of assets, where continued ownership by an
individual participating in the network would constitute a potential,
apparent or actual conflict of interest with the participant's network
duties and responsibilities.
"Financial interest" means an interest in
a business in the same area as the network as described in Section 2.1
of this document.
"NCE" means the federal Networks of Centres
of Excellence program.
"NCE Steering Committee" means the committee
comprised of the three granting agencies' Presidents and the Deputy Minister,
Industry Canada, which has overall responsibility for the NCE program.
"Network" means a group funded under the
federal Networks of Centres of Excellence program.
"Network Board of Directors" means the Board
that is responsible for the overall management of the network and is accountable
to the NCE Steering Committee.
"Network Manager" means the senior managerial
employee of the network who reports to the Board of Directors.
"Position of influence" includes any position
that entails responsibility for a material segment of the operation and/or
management of a business.
2.0 Disclosure
Upon joining the network, each individual is obliged to disclose in
writing to the Board of Directors, through the Network Manager, any direct
or indirect financial interests and positions of influence that could
lead to a potential, apparent or actual conflict of interest (examples
provided in Attachment). In addition, these submissions must be updated
whenever the individual's circumstances change in a way that would necessitate
a further disclosure. The individual also has the obligation to disclose
any potential, apparent or actual conflict of interest when it arises
during network committee or Board meetings so that the committee or Board
is aware of the situation and can take appropriate action.
2.1 Financial Interest
It consists of:
- Any material stock option (e.g., 1%) or similar ownership interest
in such a business, but excluding any interest arising solely by reason
of investment in such business by a mutual, pension, or other institutional
investment fund over which the person does not exercise control; or
- Receipt of, or the right and potential to receive, any income from
such a business, whether in the form of a fee (e.g., consulting), salary,
allowance, interest in real or personal property, dividend, royalty
derived from licensing of technology, rent, capital gain, real or personal
property, or any other form of compensation or contractual relationship,
or any combination thereof.
3.0 Management of Conflict of Interest
The Network Board of Directors or its conflict of interest sub-committee
is charged with the responsibility of managing conflict of interest, and
determining and implementing the appropriate course of action. This management
system is based on disclosure, as described in Section 2. All disclosures
constitute confidential information that will be available to the Network
Board, or a sub-committee thereof, for the evaluation and resolution of
any conflict of interest or allegations of conflict of interest brought
before the Board or its conflict of interest sub-committee.
While it is recognized that it may be difficult to completely avoid
situations of potential, apparent or actual conflict of interest, complete
avoidance or divestment may be required in certain cases. Such divestment
should not consist of a sale or transfer of assets to family members or
other persons for the purpose of circumventing the conflict of interest
compliance measures as directed by the Board.
3.1 Principles
An individual participating in the network who is involved with, or
has an interest in, or deals in any manner with a third party which might
cause a conflict of interest, will not be present and participate in any
network decisions, including committee decisions, if the declared potential
conflict of interest could influence the decision or actions of the network.
It is the obligation of the individual to declare such potential, apparent
or actual conflict of interest before discussions take place so that the
committee or Network Board of Directors is aware of the situation in order
to ensure that the individual is out of the room when the discussion and
decision process on the item in question are taking place. This course
of action should be recorded in the minutes of the meeting.
Any question raised by an individual or company regarding the potential
conflict of interest of an individual will be raised at the Network Board
of Directors level and must be documented in writing. The Network Board
of Directors will determine the extent to which the question should be
pursued and in such cases will consult the individual in question. If
necessary, the individual will be asked to respond in writing.
3.2 Non-compliance
If an individual is discovered to be in conflict of interest where disclosure
and prior approval have not been sought or granted, the Network Board
of Directors will require the individual to:
- account to the network for any gain or benefit made directly or indirectly,
arising from an involvement with, or an interest in, or from dealing
in any manner with a third party that gives rise to a conflict of interest;
and
- withdraw from the involvement; or
- withdraw from the Network; or
- take appropriate action as determined by the Board of Directors.
4.0 Review Process
An individual may request in writing, within 30 days, a review of a
Network Board of Directors' decision on conflict of interest. In certain
circumstances, the Network Board of Directors may arrange for an independent
third party appointed by mutual agreement of the network and the Board
of Directors, and failing such mutual agreement appointed by the NCE Steering
Committee, to act as an intermediary to scrutinize scientific reports
and budgetary information of research project(s) in which the individual
participating in the network is involved. The intermediary would provide
an opinion on the overall merit of the review, without divulging specifics
of a proprietary nature to other members of the network. The ultimate
decision on the resolution of the review rests with the Network Board
of Directors.
In cases where there is a concern with respect to decisions or actions
of the Network Board of Directors itself, this concern should be submitted
in writing to the NCE Steering Committee. The NCE Steering Committee may
request the Chair of the Network Board of Directors to respond in writing
to the Steering Committee. Following submission of the Chair's response,
the NCE Steering Committee will decide on follow-up action.
Examples of Conflict of Interest
The following examples, although not comprehensive, illustrate situations
that may lead to an indirect or direct conflict of interest:
- employment in any capacity by another employer outside the participant's,
administrator's or director's university, institution or company signing
the Network Agreement, including self-employment;
- holding an office that puts the individual in a position to affect
decisions, such as manager with executive powers, within a company,
or member of a board of directors;
- participating in a research contract or consultancy relationship with
a company, or serving on the board of a company;
- entering into a research contract with a company in which the participant,
or a member of his or her immediate family, has a financial or other
interest;
- carrying out supplementary professional scientific activities in
accordance with the disclosure requirements of the participant's or
director's employing organization;
- ownership of equity or other financial participation in a corporation
(including stock options and shares). Participants, administrators and
directors should abstain from activity in which they would have inside
advantage (e.g., purchase of shares) based on the information they are
privy to through membership in the Network;
- accepting gifts (other than some minor hospitality) or special favours
for him or herself or a member of his or her family from private organizations
with which the Network does business;
- influencing the purchase of equipment or materials for the Network
from a company in which the participant, the administrator or the director
has a financial or other interest.
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