Marine Biological Laboratory
Policy No. K.1.3
Initiated by: Chief Financial Officer
Approved by: MBL Director/CEO
Date: January 10, 1995
Revision: #7, August, 2012
Distribution: All MBL staff
This policy is intended to educate those who work at the MBL (all of whom are referred to throughout this document as “MBL staff members”—see Definitions in Section 10) about Federal and MBL requirements on conflicts of interest. It is one of a set of MBL policies whose purpose is to ensure that we all meet the highest ethical standards in our work, and demonstrate this to Federal and other funding agencies according to their policies. Table 1 below shows the requirements these policies impose on various MBL staff members:
1.0 Policy Statement:
It is the intent of the MBL to avoid conflicts and the appearance of conflicts between interests of the Laboratory and the personal interests of all who work at the MBL (“MBL staff members”, as defined in Section 10). The complex relationships between government, industry, and research institutions, as well as the demands of commerce, necessitate the establishment of guidelines to manage potential conflicts of interest that may arise between the MBL and MBL staff members. These guidelines have both ethical and legal bases. While there are particular concerns with individuals supported through government-sponsored research, this policy is applicable to all MBL staff members no matter the source of funding. Public Health Service Investigators may have additional procedural and training requirements under federal regulations. See addendum B.
A conflict of interest occurs when there is a divergence between an individual’s private interests and his or her professional obligations to the MBL such that an independent observer might reasonably question whether the individual’s professional actions or decisions are determined by considerations of personal gain, financial or otherwise.
2.0 General Standards:
In recognition of the requirement for broad ethical principles, the following general standards of conduct are adopted by the MBL:
2.1. MBL staff members shall report to the MBL all significant financial interests (as defined in Section 10) and organizational affiliations that are, or might appear to be, conflicts of interest related to their duties at the MBL.
2.2 MBL staff members shall disclose any interests or activities in which they are involved or contemplate becoming involved, directly or indirectly, that could conflict with the interests or activities of the MBL, and shall obtain approval prior to commencing, continuing, or consummating any activity or transaction that raises a potential conflict of interest.
2.3 When any MBL business transaction under consideration presents the potential for, or the appearance of, a conflict of interest for an MBL staff member, that person shall not be involved in the transaction without disclosure of the conflict of interest and acceptance of the MBL’s approach to managing it.
2.3.1 A potential for a perceived or actual conflict of interest in a MBL business transaction exists where a MBL staff member, or a close relative or member of that person’s household, stands to personally profit from an organization, in which the MBL staff member has a significant financial interest, doing business with the MBL.
2.3.2 A potential actual or perceived conflict exists when a MBL staff member has a significant financial interest in an organization which is in competition for MBL business and if the staff member’s position gives him/her access to proprietary or other privileged information which could benefit that organization.
2.3.3 Involvement in an MBL business transaction includes but is not limited to initiating, making the principal recommendation for, or approving a purchase or contract; drafting or negotiating the terms of a transaction; or authorizing payments from MBL accounts.
2.4 While waste, fraud, abuse and corruption in the affairs of the MBL do not necessarily involve conflicts of interest, as part of the general code of conduct, MBL staff members are expected to report any such instances that may come to their attention.
3.0 Inappropriate Activities:
Inappropriate activities include, but are not limited to, bribery, solicitation or acceptance of personal gifts with a value of over $250 per year, gratuities, or favors from organizations with which MBL does business.
4.1 Disclosure is the principal means by which an organization can track potential conflict of interest issues. Therefore, certain MBL staff members, as specified in the Table 1 above, shall make disclosure to the Human Resources Director of any activity that might have the appearance of conflicting with the conscientious performance of their duties to the MBL. Such activities could include acquiring a financial interest, such as an ownership or investment interest, a compensation arrangement, or an active negotiation or intent to acquire an ownership or investment interest or a compensation arrangement directly, or indirectly, for example through an immediate family member or other intermediate entity, in a company doing business with the MBL, or forming a partnership or limited liability company while also accepting funds for research at the MBL, and, in the case of full-time employees, accepting employment in addition to working at the MBL, including consulting arrangements (see Section 5.3). Prior to submission of any proposal to a federal agency, investigators must ensure that they have made all required financial disclosures in accord with these guidelines and applicable federal regulations, such as those mentioned in Section 5 below. While the MBL’s Conflict of Interest Disclosure Form (copy attached to this policy document) asks for disclosure of the significant financial interests of the staff member and his or her immediate family members (as defined in paragraph 10.4), the significant financial interests of a staff member’s other closer relatives or household may also create conflicts of interest as described in Section 1.0 above. In case of doubt a staff member should seek advice from the Human Resources Director.
4.2 Any MBL staff member who is or is to be involved in a MBL business transaction in which a potential for conflict of interest or its appearance exists, on his or her own part or on the part of another MBL staff member, is required to promptly report such potential conflict to the Chief Financial Officer (CFO). The MBL shall take action to assure that the transaction, if it is to proceed, is on fair and reasonable terms and in the best interest of the Laboratory. Someone other than the individual with the conflict must initiate the resolution for action and make the necessary decisions and control the transaction(s). The individual with the conflict must recuse themselves from the decision-making process.
4.3 The best interest of the MBL does not mean that purchases or other transactions must necessarily be diverted to other sources.
5.0 Sponsored Research (including government, non-government, and MBL sponsored work):
Acceptance of sponsored research funds puts specific obligations on the MBL to indicate the conditions under which outside activities and financial interests are proper or improper, to provide for notification of conflict of interest, and to have a sound policy for dealing with violations. Federal rules relating to procurement standards under government-sponsored research are found in OMB Circular A-110 Sect. 40-48 and as might be modified by the NSF Grants Policy Manual, NIH rules (42CFRPart50 Subpart F and 45CFRPart94) or NASA (14 CFR 1260.140-148). Conflict of interest matters in the case of government-sponsored research are controlled by policies detailed by the NSF (Grants Policy Manual), NIH (42 CFR 50.604-606) or NASA (14 CFR 1260.142). Please note these regulations are subject to change and the list is not intended to be exhaustive. Working on non-governmental and MBL sponsored projects requires the same diligence.
Consulting relationships between MBL employees who are engaged in sponsored research and projects at the MBL and other organizations and individuals may be valuable, and serve the research and education missions of the MBL. Likewise, the transfer of technical knowledge and skill from the MBL may contribute to technological advance. Although potentially desirable, these relationships can lead to serious conflicts if not scrutinized.
The following examples are situations or activities concerning sponsored research that might have the appearance of conflicting with the conscientious performance of an MBL staff member’s duty as a recipient of research funds. Addendum A provides further specific examples by way of specific organizations with whom the MBL does business but is not intended as an exhaustive list, so judgment must be applied in similar situations. These conflict situations must be reported to the Human Resources Director when there is a change in a situation and, where indicated in Table 1, at least annually. Government sponsored research and specific funding requirements from other sources specify that disclosures relating to sponsored activities are required to be kept on file by the MBL for defined time periods.
5.1. Conflict situations – relationships and financial interests:
Favoring of outside interests. When an MBL staff member undertaking or engaging in sponsored work has significant financial interests in business concerns, or consulting arrangements with outside organizations, it is important to avoid actual or apparent conflicts of interest between her/his sponsored MBL research obligations and his/her outside interests and other obligations.
Therefore, staff members must ensure that such outside organizations are not in a position to influence the research or work plan, results, or the reporting or interpretation of results of the project. See Addendum A, available from the Financial Services Office, for some samples of activities which could be in conflict.
5.2. Outside activities of staff members engaged in sponsored research at the MBL should be reported to the Human Resources Director. See Addendum A for samples of outside activities that should be reported.
5.3 Conflict of Commitment by MBL Employees:
MBL employees owe their primary professional allegiance to the MBL, and their primary commitment of time and intellectual energies should be to its research and educational programs. The specific responsibilities and professional activities that constitute an appropriate and primary commitment will differ across departments, but they should be based on a general understanding between the employee and his or her supervisor.
The MBL recognizes the value of consulting arrangements for MBL employees. Outside consulting arrangements for administrative and service employees and employees who are supported from research grants should not exceed 52 days per year. Those research employees who are not fully supported by research grants may request permission from the MBL President/Director to engage in additional consulting time.
5.4. Time and effort on research projects:
All MBL staff members who are the recipients of wages from sponsored research grants need to document their time and effort on those projects in a manner consistent with the research agreement.
Any reimbursed travel or sponsored travel related to Institutional responsibilities (including purpose of the trip, sponsor/organizer, destination, and duration) must be disclosed. Disclosure is not required if the travel 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.
6.0 Avoidance of Conflicts of Interest on Sponsored Research
Upon disclosure, the Human Resources Director will bring to the attention of the MBL President/Director or his/her designee any perceived conflicts of interest. The affected individual and the MBL Compliance Committee will discuss the issues and appropriate remedies. The Committee will make a report and recommendation for action to the MBL President/Director. In particular, the following conditions or restrictions may be imposed by the MBL President/Director in his/her discretion to manage, reduce, or eliminate actual or potential conflicts of interest related to sponsored research activities at the MBL:
- Public disclosure of significant financial interests;
- Monitoring of research by independent reviewers;
- Modification of the research plan;
- Disqualification from participation in the portion of the sponsored research that would be affected by the significant financial interests;
- Divestiture of significant financial interests;
- Severance of relationships that create actual or potential conflicts; or
- Such other actions as deemed appropriate by the President/Director.
Prior to the expenditure of any funds under a NIH award, the MBL must report to the Awarding Component the existence of a conflicting interest (but not the nature of the interest or the details) found by the MBL and assure the conflict has been managed, reduced or eliminated. The NSF requires notification only if the conflict cannot be managed, reduced or eliminated. With all sponsors, if the MBL President/Director and the individual involved are unable to satisfactorily manage or eliminate an actual or potential conflict of interest, the MBL will immediately inform the research sponsor(s) or agency(ies), according to their applicable regulations.
7.0 Distribution of these Guidelines
The MBL Human Resources Office will distribute this policy annually to all MBL staff members who participate in sponsored research or educational activities. All MBL staff members remain subject to the MBL’s Code of Conduct that is posted on the MBL web-site.
8.0 Notification of Violations
All suspected violations shall be reported, in strictest confidence, to the Human Resources Director. Please refer to the MBL’s Allegation of Misconduct policy G.1.20 for further guidance. Violations involving the MBL President/Director shall be reported to the Chairman of the Board of Trustees. The Compliance Coordinator shall take such steps necessary to be appraised of such violations and their resolution and report as necessary to the Audit Committee of the Board of Trustees.
9.1. Administrative action:
In instances in which the violations are not in dispute, the Human Resources Director will verify the facts with the individual who violated this policy and bring to the attention of the Compliance Committee who will make a recommendation of the appropriate remedial action(s) to the MBL President/Director. If a violation involves the MBL President/Director, the Chairman of the Board will make a determination of the appropriate remedial action(s).
When a dispute exists, the Human Resources Director shall, in consultation with the Compliance Committee, appoint an appropriate ad hoc committee to investigate the facts and report within 120 days to the MBL President/Director and other appropriate individuals, including the individual alleged to have violated this policy. The alleged violator shall then have 30 days to comment on the allegations, after which the MBL President/Director shall render a finding and determine appropriate remedial action(s).
9.2. Levels of severity:
Administrative actions will be in proportion to the severity of the violation. These actions, which would be in addition to any legal penalties, may include the following: (a) written reprimand; (b) reassignment; (c) demotion; (d) suspension; (e) termination/separation from MBL.
9.3. Effect of administrative action on government-sponsored research:
Suspension or separation of a project director or program director or other key personnel will be reported promptly to the appropriate government awarding office. The appropriate actions may include, or may result in, a change in Principal Investigator and a change in scope of the research project. Other reporting to the government agencies shall be made as required by law or deemed appropriate by the MBL President/Director.
10.1 Significant financial interest (SFI) – salary or other compensation (royalties, licensing fees from patents, copyrights, etc.) greater than $5,000 for the preceding 12 months; or equity interests (stocks, options or other ownership interests) valued at $5,000 or more; or 5% or more ownership interests. This includes aggregate financial interests of the employee and immediate family members. Equity owned via mutual funds, pensions funds, etc., over which the employee has no control are excluded.
Excluded are: Ownership of mutual funds; income from seminars, lectures, or teaching engagements sponsored by and service on advisory or review panels for a federal, state, or local government agency, an institution of higher education as defines at 20 U.S.C. 1001(a), an academic teaching hospital, a medical center, or a research institute that is affiliated with and institution of higher education. Also excluded are royalties, or other remuneration paid by the Institution if currently employed or otherwise appointed by the Institution and Intellectual Property Rights assigned to the Institution and agreements to share royalties related to such rights.
10.2 Institutional responsibilities – is defined as professional responsibilities on behalf of the institution. These may include: activities such as research, research consultation, teaching, institutional committee memberships, and service on institutional panels.
10.3 An MBL faculty or staff member is affiliated with another organization if the MBL staff member or an immediate family member is an officer, director, employee, proprietor, partner, trustee, or otherwise is able to influence the decisions, of the other organization.
10.3 MBL staff member – any faculty or staff member either full or part-time, administrative, scientific research, or service staff of any rank or title who is designated as an employee by the MBL. Also included are those individuals who, though not employees, serve as principal investigators on sponsored projects (for example adjunct scientists, course directors, Whitman Investigators with MBL Research Awards) administered by the MBL.
10.4 Immediate Family Member – parents, a spouse or dependent child.
Each NIH investigator must complete training prior to engaging in research related to any funded grant or contract and at least every four years, and immediately under these designated circumstances:
11.1 The MBL financial conflict of interest (FCOI) policies change in a manner that affects Investigator requirements
11.2 An Investigator is new to the MBL
11.3 The MBL finds an Investigator noncompliant with the MBL’s FCOI policy or management plan.
12.0 Public Notice
The MBL will provide a link to this policy on the MBL homepage. Upon written request for information concerning identified FCOIs held by senior/key personnel, the MBL will respond in writing within five business days of such request.
13.0 Compliance Committee
The MBL Compliance Committee is charged with review of all Conflict of Interest issues. The Committee is advisory to the MBL President/Director. The membership of this committee includes: CFO, as Chairperson, Chief Academic and Scientific Officer (CASO), Manager of Sponsored Programs, Director of Human Resources, and the Director of Facilities. Others will be appointed on an ad hoc basis to assist in specific issues. Committee members must declare any conflicts they have with business brought before the Committee. Those Committee members with conflicts do not participate in discussion or vote except to provide information requested by the Committee. The committee will meet at least quarterly to review any management plans that have been developed.
14.0 Policy Clarification and Updates
Policy clarification and updates are available from the office of the Chief Academic and Scientific Officer, the Chief Financial Office, or Human Resources.
Addendum A: See MBL Financial Services Office
Addendum B: Procedural Requirements for Public Health Service(PHS) Investigators:
1. Training: Each Investigator must participate in training on Financial Conflicts of Interest:
a. Prior to engaging in research related to any PHS-funded grant
b. At least every 4 years
c. Immediately, if:
- Institution revises its FCOI policy that affects requirements of Investigators
- An Investigator is new to any Institution
- An Investigator is not in compliance with the policy or management plan
2. Disclosure, Review and Monitoring: The Institutional Official for these FCOI’s is the Chief Financial Officer
Each Investigator must disclose a Significant Financial Interest(SFI) (and those of the Investigator’s spouse and dependent children) related to the Investigator’s institutional responsibilities that meets or exceeds the regulatory definition of SFI:
a. No later than at the time of application for PHS-funded research
b. At least annually during the period of the award (February 15th, per MBL policy)
c. Within 30 days of discovering or acquiring a new SFI