Board of Regents Conflict of Interest Policy
Approved by the Board of Regents August 15, 2014
I. Statement of Principles
The University of the Pacific is a California nonprofit public benefit corporation tax-exempt as a public charity under Internal Revenue Code Section 501(c)(3). As a result, all members of the Board of Regents, officers, administration, faculty and employees of the University serve the public trust and have a clear obligation to fulfill their responsibilities in a manner consistent with this fact. All decisions relating to the University made by the Board of Regents, officers, administration, faculty and employees of the University are to be made solely on the basis of a desire to promote the best interests of the University and further its mission. The integrity and reputation of the University must be protected and advanced at all times.
At the same time, conflicts of interest (or the appearance of conflicts of interest) will arise in any organization's decision making process. In the University's case, the likelihood that conflicts (or the appearance of conflicts) will arise may actually be increased due to the fact that, in order to successfully execute its mission, the University must have Regents, officers, administrators, faculty and employees with diverse backgrounds and a wide variety of skills, expertise and experiences. The purpose of this policy and all other University conflict of interest policies promulgated hereunder is not to avoid any and all conflicts. Instead, the purpose of this policy and all other University conflict of interest policies promulgated hereunder is to make certain that all situations where conflicts (or appearance of conflicts) arise are, at all times, handled in such a way as to (i) maintain the integrity and reputation of the University, (ii) safeguard the fairness of the University's decision making process, (iii) comply with all legal and regulatory requirements, and (iv) ensure that the best interests of the University and further its mission are the guiding principles in handling all conflict situations as they arise.
The procedures set forth in this policy for handling conflict and/or apparent conflict situations apply to all Regents and corporate officers of the University. However, the complexity in the management and operations of the University, and the wide variety of conflict of interest situations that may arise within the University, dictate the need for other conflict of interest policies covering the activities of University officers, administrators, faculty and employees. It is the intent of the University that these other conflict of interest policies shall be consistent with, and no less protective than, the policies set forth in this Statement of Principles.
This policy and other University conflict of interest policies promulgated hereunder are intended to implement and supplement, but not replace, any applicable federal or California state laws governing conflict of interest matters applicable to California nonprofit public benefit corporations and 501(c)(3) public charities.
 References in this Policy to "corporate officers" shall mean those corporate officers identified as such in the University's Bylaws.
II. Duties of Regents and Corporate Officers
All Regents and corporate officers have a duty of loyalty to the University to act in the best interest of the University and not to act in their personal interest or the interest of others when exercising the duties and responsibilities as a Regent or officer. Regents and corporate officers may not use their position as a Regent or corporate officer, or information they have about the University or the University's property, to secure any personal advantage, pecuniary gain or other material benefit for themselves or any Family Member (as that term is defined below).
Contracts, transactions, proposals, arrangements or other circumstances giving rise to a Conflict of Interest Matter are not prohibited solely because they may give rise to a Conflict of Interest Matter. It is the duty of all Regents and corporate officers to follow this policy and its procedures in all such Conflict of Interest situations. Each Regent and corporate officer recognizes that the failure to comply with this policy and its procedures may lead to a breach of that Regent's duty of loyalty and may impair the integrity and reputation of the University.
III. Defined Terms
For purposes of this policy and the procedures set forth below, the following defined terms shall have the meaning as set forth below.
"Apparent Conflict of Interest" means any Circumstance where a reasonable person would conclude from the circumstances that a Regent or corporate officer's ability to discharge his or her duties as a Regent or corporate officer, as described above, are compromised by the Regent's or corporate officer's personal interests in the Circumstance.
"Circumstance" means a contract, transaction, proposal, plan, or arrangement.
"Competing Interest" means (a) any matter being considered by the University in which the Covered Person also has, is pursuing or would like to have an interest, or (b) any interest of a Covered Person that is incompatible with the Regent or corporate officer's fiduciary duty to the University.
"Conflict of Interest" means any Circumstance in which a Covered Person has an Indirect Interest, a Substantial Financial Interest or a Competing Interest.
"Conflict of Interest Matter" is any Conflict of Interest or Apparent Conflict of Interest.
"Covered Person" means a Regent, corporate officer or a Family Member of any Regent or corporate officer.
"Family Member" means a Regent or corporate officer's spouse, domestic partner, child, stepchild, brother, sister, parent, grandchild, grandparent or respective spouse or in-laws of any of the foregoing and any other person residing within the Regent's household.
"Indirect Interest" means an interest in any company or organization owned or controlled by the Covered Person or in which the Covered Person is a director, officer or executive employee.
"Interested Person" means any Regent or corporate officer that is the subject of a Conflict of Interest Matter.
"Substantial Financial Interest" means an interest arising from the Covered Person (a) being actual or beneficial owner of more than 1% of the outstanding shares of a publicly traded company or 5% of the voting stock or controlling interest of a privately held company; (b) having a compensation arrangement of any kind; (c) having any Circumstance that provides the Covered Person with a significant income or portion of his or her net worth; or (d) receiving $10,000 or more per year from any company or organization.
A. Annual Disclosure. Each Regent and corporate officer must complete an annual Conflict of Interest Disclosure Form. All annual forms shall be reviewed by the University's Director of Internal Audit and any reported Conflict of Interest matters shall be reported to the full Audit Committee.
B. On-going Disclosure Requirement. As soon as a Regent or corporate officer becomes aware of an actual or potential Conflict of Interest Matter, he or she must disclose in writing the Conflict of Interest Matter and all material information related thereto to the Chair of the Audit Committee, with a copy to the University's Director of Internal Audit. If the Chair of the Audit Committee is the Interested Person, the written disclosure shall be made to the Chair of the Board, with a copy to the University's Director of Internal Audit. If a Regent, officer or any University employee becomes aware of an actual or potential Conflict of Interest Matter regarding a Regent or officer that they believe has not been disclosed, that person shall report such matter in writing to the Chair of the Audit Committee, with a copy to the University's Director of Internal Audit. If the Interested Person acknowledges that a Conflict of Interest Matter exists, the procedures set forth in Section IV(D) below shall apply. If there is any question as to whether the reported matter is a Conflict of Interest Matter, the procedures set forth in Section IV(C) below shall apply to make this determination.
C. Determination of Whether Conflict of Interest Exists.
1. In the event there is a question as to whether a Circumstance presents a Conflict of Interest Matter for the Regent or corporate officer, the matter shall be presented for consideration to the Audit Committee. The Audit Committee shall consider the matter and make a recommendation as to whether it believes a Circumstance is, in fact, a Conflict of Interest Matter. The Audit Committee also shall determine whether its recommendation should be presented directly to the Board of Regents or should first be referred to the Executive Committee for its consideration and recommendation. If applicable, the Executive Committee shall review the Audit Committee's recommendation and make its own recommendation to the full Board of Regents. The Board of Regents shall make the final determination as to whether there is a Conflict of Interest Matter. The decision of the Board of Regents shall be conveyed to the Interested Person by the Chair of the Board or his or her designee.
2. Until a determination has been made by the Board as to whether the Circumstance is a Conflict of Interest Matter, the Interested Person shall not participate in any committee or full Board of Regents meeting at which the Conflict of Interest matter is discussed and he or she shall not be permitted to vote on such matters. However, the Interested Person shall have the right to address the Board to explain the circumstances related to the apparent Conflict of Interest Matter and present any other information the Interested Person believes would be helpful to the Board in considering the matter. Also, should the Interested Person have information that any committee or the Board might feel is important or helpful for the consideration of this issue, the Interested Person may be included in such meetings for that limited purpose.
3. The Audit Committee, Executive Committee and Board may seek advice of counsel as they deem appropriate.
D. Confirmed Conflict of Interest Matter.
1. If it has been determined that a Conflict of Interest Matter exists, the Interested Person shall be excluded from all consideration, discussion and votes with respect to the matter, including all portions of any committee meeting in which the matter is discussed. This Interested Person shall also be excluded from the distribution of any proprietary or confidential information regarding the matter that is distributed to Regents for their consideration of the matter.
2. If any committee or the full Board believes the Interested Person might have information that would be beneficial to the University when considering the matter, the Interested Person may be included in a meeting for the limited purpose of communicating that information.
3. After exercising due diligence, the Board shall determine whether the University can obtain with reasonable efforts a Circumstance from a person or entity that would not give rise to a Conflict of Interest Matter and that is equal to or more advantageous to the University than the Circumstance giving rise to the Conflict of Interest Matter. If an equal or more advantageous Circumstance is not reasonably attainable under circumstances that would not give rise to a Conflict of Interest Matter, the Board shall determine by a majority vote of the disinterested Regents:
a. whether the Circumstance is in the University's best interest and for its own benefit;
b. whether the Circumstance is fair and reasonable to the University; and
c. whether to enter into the Circumstance in conformity with such determination.
4. In the course of the procedures described above, the Interested Person shall continue as a full voting member of the Board and its committees on all other matters.
E. Records of All Committee and Regent Meetings. The minutes of all committee and Regent meetings at which a Conflict of Interest Matter is addressed shall be prepared by the later of the next Board meeting or 60 days after the final action by the Board on the Conflict of Interest and shall contain (to the extent applicable and discussed at such committee or Regent meeting):
1. The names of the Interested Persons who disclosed or otherwise were found to have a Conflict of Interest Matter in connection with the Circumstance, the nature of the conflict, the action taken to determine whether a Conflict of Interest was present and the date of the action, and the decision of the committee or Board as to whether a Conflict of Interest Matter in fact existed.
2. The names of the persons who were present for discussions and votes relating to the Circumstance, the content of the discussion, including any alternatives to the proposed Circumstance, comparability data relied upon by the committee or Board and how the data was obtained, the terms of the transaction and the date it was approved, and a record of any votes taken in connection with the proposal.
F. Disclosure of Confidential/Proprietary Information. In the event any information required to be disclosed by an Interested Person under this policy is the confidential or proprietary information of the Interested Person or another party, the Interested Person shall clearly mark such information "Confidential/Proprietary Information." The University, including its Board of Regents and any Board of Regents committee, shall only use such confidential/proprietary information as necessary or appropriate to manage the Conflict of Interest Matter for which the information was disclosed. Such permitted use shall include disclosing such information to any attorney, accountant or other professional advising the University on the Conflict of Interest Matter. Notwithstanding the foregoing, the University may also disclose such confidential/proprietary information (a) to comply with any law, rule or regulation, (b) if required by any accrediting agency, (c) in accordance with a judicial or other governmental order, or (d) if the Board determines that the best interests of the University dictate disclosure of such information. Prior to any disclosure of the confidential/proprietary information under the provisions of Sections F(a) through (d), the University shall provide reasonable written notice of such disclosure to the Interested Person.