Procedures for the Implementation of

Article XXII

of the Rochester Institute of Technology’s Bylaws

Conflict of Interest Policy

This document contains the procedures forimplementation of Article XXII of the Rochester Institute of Technology’s Bylaws (Article XXII). Article XXII and RIT’s Individual Conflict of Interest and Commitment Policy (C4.0) are RIT’s conflict of interest policies. [1]

I.Definitions

A.Conflict of Interest. A conflict of interest will be deemed to exist whenever an individual is in the position to approve or influence RIT policies or actions that involve personal interests of the individual that may be inconsistent with the interests of RIT, or could ultimately harm or benefit financially:

1)the individual;
2)an individual’s Relative; or

3)any organization in which s/he or a Relative is a director, trustee, officer, member, partner, or more than 10% shareholder.

Service on the board of any other organization, including not-for-profit corporations, constitutes a potential conflict of interest.

B.Relative. A Relative of an individual includes his or her spouse or domestic partner, ancestors, brothers and sisters, children, grandchildren, great-grandchildren, and spouses or domestic partners of brothers, sisters, children, grandchildren and great-grandchildren.

C.Related Party. A Related Party includes:

  1. any Trustee, officer or key employee of the Institute or any Affiliate of the Institute;
  2. any Relative of a Trustee, officer or key employee of RIT or any Affiliate of RIT; or
  3. any entity in which any individual described in clauses (i) and (ii) of this subsection has a ten percent (10%) or greater ownership or beneficial interest or, in the case of a partnership or professional corporation, a direct or indirect ownership interest in excess of five percent (5%).

E.Related Party Transaction. A Related Party Transaction includes any transaction, agreement or any other arrangement in which a Related Party has a financial interest and in which RIT or any Affiliate of RIT is a participant.

E.Affiliate.An Affiliate of RIT includes any entity controlled by, in control of, or under common control with RIT.

F.Key Employee. A Key Employee includes any person who is in a position to exercise substantial influence over the affairs of RIT, as well as those employees listed as key employees in RIT’s Information Tax Return (Form 990).

II.Steps for Disclosing and Managing Conflicts of Interest

  1. A Trustee, or officer or Key Employee shall disclose a Related Party Transaction to the Secretary of the Institute (Secretary):
  2. prior to voting on or otherwise discharging his/her duties with respect to any matter involving the conflict which comes before the Board or any committee;
  3. prior to entering into any contract or transaction involving the Related Party;
  4. as soon as possible after the Trustee or officer learns of the Related Party Transaction;
  5. prior to an individual’s initial election as a Trustee; and
  6. on the conflict of interest disclosure form distributed annually by the Secretary.
  7. Following receipt of information concerning a Related Party Transaction, the Secretary will arrange for the RIT Board of Trustees’ Conflict of Interest Committee (Committee) to consider the material facts concerning the proposed contract or transaction.
  8. It shall be the responsibility of the Committee to approve contracts or transactions involving Related Partiesby a majority of the Committee.
  9. The Committee shall approve only those contracts or transactions in which the terms are fair and reasonable to RITand are consistent with the best interests of RIT.
  10. Fairness includes, but is not limited to, the concepts that RIT should pay no more than fair market value for any goods or services that RIT receives, and that RIT should receive fair market value consideration for any goods or services that it furnishes others.
  11. The Committee shall set forth the basis for its decision with respect to approval of Related Party Transactions in the written minutes of the meeting at which the decision is made. The minutes shall include:

a)the basis for determining that the terms are fair and reasonable to RIT;

b)alternative arrangements reviewed and considered; and

c) the basis for determining that the arrangements are consistent with the best interests of RIT.

  1. The Trustee, officer or Key Employee with the potential conflict of interest shall not participate in any deliberation or voting regarding the approval of the contract or transaction involving the potential conflict of interest. The Board of Trustees, or the Committee, may request that the interested Trustee, officer or Key Employee provide information regarding the Related Party Transaction prior to the commencement of deliberations or voting thereon.
  2. The Trustee, officer or Key Employee with the potential conflict of interest shall not attempt to improperly influence the deliberation or voting regarding the contract or transaction involving the potential conflict of interest.
  3. The Committee can approve in advance procedures to be used by RITemployees charged with responsibility for entering into contracts and transactions on behalf of RIT, for certain contracts involving an actual or potential conflict of interest. Such procedures shall, at minimum, require an employee to consider available alternative transactions and to document any such transaction considered by the employee. The creation of theses advance procedures shall not relieve the Committee of its obligation to approve contracts or transactions involving actual or potential conflicts of interest.
  4. If a majority of the Committee does not approve the Related Party Transaction because it finds that either the approved procedures were not followed or that the contract or transaction is unfair to RIT, the contract or transaction will be void and not binding on RIT.
  5. If a potential contract or transaction between a Related Party and RIT is not disclosed to the Secretary prior to RIT entering into such a contract or transaction, then this Related Party Transaction must be promptly reported to the Secretary by the Related Party. The Secretary will bring the existence and essential terms of the contract or transaction to the attention of the Committee. The Committee will promptly review the contract or transaction and determine:
  6. that available alternative transactions were considered, and
  7. that such Related Party Transaction is fair, reasonable and in the best interests of the Institute.
  8. In the discretion of the Committee, it may refer the decision concerning a particular Related Party Transaction to the entire Board of Trustees.
  9. The Committee shall report to the full Board at least annually concerning conflicts of interest that have been disclosed, and contracts and transactions involving conflicts that it has approved.
  10. The President of RIT (President) shall report to the Committee at least annually concerning employee conflicts of interest that have been disclosed, and contracts and transactions involving employee conflicts that the President has approved.

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Procedures for the Implementation of Article XXII

Draft 10/13/2018

Page1 of 4

[1] Article XXII applies to RIT trustees, RIT officers, and key employees of RIT. C4.0 applies to all RIT regular employees who are not otherwise RIT trustees, officers or key employees.