South Dakota State University Alumni Association

Code of Conduct and Ethics

Adopted: September 19, 2009, by the SDSU Alumni Association Board of Directors

SDSU AA Code of Ethics 1|PageSept. 19, 2009

  1. General Policy
  2. Reporting Violations and Non-Retaliation
  3. Discipline
  4. Amendment, Modification and Waiver
  5. Laws, Rules and Regulations
  6. Conflicts of Interest
  7. Confidential Corporate Information
  8. Corporate Opportunities
  9. Protection and Proper Use of Assets
  10. Recordkeeping
  11. Internal Controls and Fraud
  12. Purchasing
  13. Record Retention and Destruction
  14. Process for Determining Compensation
  15. Joint Ventures

SDSU AA Code of Ethics 1|PageSept. 19, 2009

  1. GENERAL POLICY

Ethical conduct in business is not just for the select few. All of the officers, directors and employees of the South Dakota State University Alumni Association (“SDSU AA”) are responsible for conducting SDSU AA business in a legal, honest and ethical manner. More than guidelines, this Code of Conduct and Ethics (this “Code”) forms the standard of conduct that you, as an SDSU AA representative, must follow and enforce. Your responsibility to act in accordance with the standards set forth in this Code is in addition to your obligation to comply with both the letter and spirit of all laws, rules and regulations governing the SDSU AA. If any law, rule or regulation conflicts with this Code, you must comply with such law, rule or regulation.

All employees must have a keen appreciation of our responsibility to our stakeholders and to the public. Collectively, we must earn confidence in the integrity of our institution.

You are always expected to use good judgment and to act in accordance with the standards set forth in this Code. If you find yourself in a situation where proper conduct is unclear; consult with the president/CEO or another appropriate person.

  1. REPORTING VIOLATIONS and NON-RETALIATION

You are expected, and have an obligation to the SDSU AA, to promptly report on a confidential basis suspected or known illegal practices and/or violations of the standard of conduct expected of an officer, director or employee of the SDSU AA. You may report such violations to your immediate manager, the president, chairman of the board of directors, or the chair of the audit committee. Such persons will strive to maintain the confidentiality of any report to the maximum extent consistent with fair and rigorous review of the violation. Retaliation against anyone who, in good faith, reports suspected or known violations is strictly prohibited. You will not suffer any penalty for reporting, in good faith, any violation. The SDSU AA will conduct a prompt, discreet and objective review or investigation. Staff or volunteers must recognize that the SDSU AA may be unable to fully evaluate a vague or general complaint, report or inquiry that is made anonymously.

  1. DISCIPLINE

Any violation of this Code is a very serious matter and will result in disciplinary action, up to and including immediate termination, that will be reasonably designed to deter wrongdoing and to promote accountability for adherence to this Code.

  1. AMENDMENT, MODIFICATION and WAIVER

This Code may only be amended or modified by the Board. Any waiver of this Code for any officer or director of the SDSU AA may only be made by the Board.

  1. LAWS, RULES and REGULATIONS

Each of the SDSU AA’s officers, directors and employees are expected to respect and comply with all of the laws, rules and regulations of each city, state and country in which the SDSU AA operates. Although you are not expected to know the details of all of these laws, rules and regulations, it is important to know enough to determine when to seek advice.

  1. CONFLICTS OF INTEREST

The SDSU AA prohibits conflicts of interest. A “conflict of interest” occurs whenever the personal interest of an officer, director or employee (or a member of the employee’s immediate family) directly or indirectly conflicts in any way with the SDSU AA’s interest. The SDSU AA’s officers, directors and employees must be scrupulous in avoiding any action or interest that conflicts with, or appears to conflict with, the SDSU AA’s interests. Obviously, the facts in each situation will determine whether the interest in question is an actual or potential conflict of interest, but a conflict situation can arise when an officer, director or employee, or a member of his or her family: (a) takes actions or has interests that may make it difficult to perform his or her work for the SDSU AA objectively and effectively; (b) receives improper personal benefits as a result of his or her position with the SDSU AA, whether from a third party or the SDSU AA.

  1. CONFIDENTIAL CORPORATE INFORMATION

It is the SDSU AA’s policy that all officers, directors and employees hold in the strictest confidence, and appropriately safeguard, the SDSU AA’s confidential corporate information.

In terms of the SDSU AA’s confidential corporate information, the SDSU AA’s basic guidelines are as follows: (a) you must never discuss confidential corporate information with others outside of the SDSU AAexcept outside advisors and then only when necessary and appropriate; (b) you must only discuss confidential corporate information with others within the SDSU AA when required in the normal transaction of business; and (c) you must guard against accidental disclosure of confidential corporate information.

This policy is particularly important with respect to customer information that is available to the SDSU AA’s officers, directors and employees. Our customers expect the SDSU AA to respect their privacy and to hold their information in the strictest confidence. Therefore, the SDSU AA expects you to hold this information in the strictest confidence.

  1. CORPORATE OPPORTUNITIES

Officers, directors and employees of the SDSU AA must not take for themselves personally opportunities that are discovered through the use of the SDSU AA’s property, information or position without the prior consent of the SDSU AA Board. You may not use the corporate property, information or position for personal gain and you may not compete with the SDSU AA directly or indirectly. You owe a duty to the SDSU AA to advance its legitimate interests when the opportunity to do so arises.

  1. PROTECTION and PROPER USE OF ASSETS

All officers, directors and employees must endeavor to protect the SDSU AA’s assets and ensure their efficient use. Theft, carelessness, waste and fraud have a direct impact on the SDSU AA’s profitability and should be reported immediately. The SDSU AA’s equipment should not be used for non-SDSU AA business, although incidental personal use may be permitted.

Your obligation to protect the SDSU AA’s assets includes its proprietary information. Proprietary information includes the SDSU AA’s intellectual property, such as trade secrets, trademarks, trade names and copyrights, as well as the SDSU AA’s confidential corporate information, which is discussed above.

The SDSU AA will provide office equipment and supplies for each of its employees. You should not use personal items in the performance of your duties. If you need any office equipment, you are responsible for discussing your needs with your immediate manager.

The sale of assets by the SDSU AA to officers, directors and employees of the SDSU AA is highly discouraged. Any such sale must be a fair market value.

  1. RECORDKEEPING

The SDSU AA requires honest and accurate recording of information in order to provide accurate reports and make responsible business decisions. All of the SDSU AA’s books, records, accounts and financial statements must be maintained in reasonable detail, must appropriately reflect the SDSU AA’s transactions and must conform to both applicable legal requirements and the SDSU AA’s system of internal controls. Unrecorded or “off the book” funds or assets should not be maintained unless permitted by laws and not prohibited by the SDSU AA’s policies. All employee business expense accounts must be documented and recorded accurately.

  1. INTERNAL CONTROLS and FRAUD

All officers, directors and employees of the SDSU AA, including, without limitation, the president, business manager and all other senior officers, are responsible for reporting to our Board of Directors any concerns that he or she may have regarding (a) significant deficiencies in the design or operation of internal controls that could adversely affect the SDSU AA’s ability to record, process, summarize and report financial data; or (b) fraud, whether or not material, that involves management or other employees, including with limitation, those employees having a significant role in the SDSU AA’s financial reporting, disclosure or internal controls.

  1. PURCHASING

It is the SDSU AA’s policy to purchase all equipment, supplies and services on the basis of quality, utility and the price offered by the vendor. The purchase of assets by the SDSU AA from officers, directors and employees is highly discouraged. Any purchase must be at fair market value. Any purchase over $5,000 required approval by the Board of Directors.

  1. RECORD RETENTION and DOCUMENT DESTRUCTION

The SDSU AA shall retain records for the period of their immediate or current use, unless longer retention is necessary for historical reference or to comply with contractual or legal requirements. Records and documents outlined in this policy include paper and electronic files (including email) regardless of where the document is stored. If an official investigation is underway or even suspected, document purging must stop in order to avoid criminal obstruction.

In order to eliminate accidental or innocent destruction, the SDSU AA Board of Directors has adopted the following document retention schedule as recommended by their financial auditor.

a. Retain permanently:

  • Annual Financial Statements
  • Patent Records
  • Articles of Incorporation and Amendments
  • Bylaws and Amendments
  • Pension Records
  • Company Stocks and Bonds
  • Certificates
  • Property Records (including appraisals, plans, spedifications and sales)
  • Deeds
  • Tax Returns (estate, gift, and income)
  • Title Papers
  • Contracts, Changes and Specifications
  • Labor Contracts
  • Governing Board Minutes of Meetings
  • Copyright and trademark registrations and samples of protected works
  • Attorney contingent liability letters
  • Tax Exemption Determination Letter and Related Correspondence

b. Retain for ten years:

  • Check Registers
  • Corporate Contracts
  • Sales & Use Tax Returns
  • Franchise Agreements
  • Workers’ Compensation Reports

c. Retain for seven years:

  • Accident Reports
  • Bank Statements
  • Options
  • Checks
  • Correspondence
  • Property Damage Reports
  • Depreciation Schedules
  • Employee and Vendor Contracts
  • Sales Invoices, Slips and Work Records
  • Payroll Tax Returns
  • Inventory Records
  • Uncollectible Accounts Records
  • Invoices
  • Leases
  • Withholding and Exemption
  • Maintenance and Repaid Records
  • w-2 Forms
  • Mortgage Records
  • Personnel Files
  • Unemployment Claims

d. Retain for five years:

  • Bills of Lading
  • Fire Damage Reports
  • Daily Time Reports
  • Shipping Tickets
  • Sales Commission Reports
  • Expense Reports

e. Retain for three years:

  • Bank Deposit Slips
  • Insurance Policies (after expiration)
  • Bank Reconciliations
  • Petty Cash Records
  • Budgets
  • Delivery Receipts
  • Receiving Reports
  • Remittance Statements
  • Fidelity Bonds
  • Interim Financial Statements
  • Requisitions
  • Surety Bonds
  • Garnishments
  • Travel Records

Exceptions to these rules and terms for retention may be granted only by the Organization’s chief staff executive or Chair of the Board.

  1. PROCESS FOR DETERMINING COMPENSATION

This policy on the Process for Determining Compensation of the SDSU AA applies to the compensation of the following persons employed by the SDSU AA: (check if applicable)

_X__ the SDSU AA’s chief employed executive1.

____ other Officers2 or Key Employees3 of the SDSU AA by title: (check if applicable; supply titles) None

The process includes all of these elements: (1) review and approval by the board of directors or compensation committee of the SDSU AA; (2) use of data as to comparable compensation; and (3) contemporaneous documentation and recordkeeping.

  1. Review and approval. The compensation of the person is reviewed and approved by the board of directors or compensation committee of the SDSU AA, provided that persons with conflicts of interest with respect to the compensation arrangement at issue are not involved in this review and approval.
  2. Use of data as to comparable compensation. The compensation of the person is reviewed and approved using data as to comparable compensation for similarly qualified persons in functionally comparable positions at similarly situated organizations.
  3. Contemporaneous documentation and recordkeeping. There is contemporaneous documentation and recordkeeping with respect to the deliberations and decisions regarding the compensation arrangement.
    ______

Chief employed executive – The CEO (i.e., Chief Executive Officer), president, executive director, or top management official (i.e., a person who has ultimate responsibility for implementing the decisions of the Organization’s governing body or for supervising the management, administration, or operations of the Organization).

2Officer – A person elected or appointed to manage the Organization’s daily operations, such as a president, vice-president, secretary or treasurer. The officers of the Organization are determined by reference to its organizing document, bylaws, or resolutions of its governing body, or as otherwise designated consistent with state law, but at a minimum include those officers required by applicable state law. Include as officers the Organization’s top management official and top financial official (the person who has ultimate responsibility for managing the Organization’s finances).

3Key Employee – An employee of the Organization who meets all three of the following tests: (a) $150,000 Test: receives reportable compensation from the Organization and all related organizations in excess of $150,000 for the year; (b) Responsibility Test: the employee: (i) has responsibility, powers, or influence over the Organization as a whole that is similar to those of officers, directors, or trustees; (ii) manages a discrete segment or activity of the Organization that represents 10% or more of the activities, assets, income, or expenses of the Organization, as compared to the Organization as a whole; or (iii) has or shares authority to control or determine 10% or more of the Organization’s capital expenditures, operating budget, or compensation for employees; and (c) Top 20 Test: is one of the 20 employees (that satisfy the $150,000 Test and Responsibility Test) with the highest reportable compensation from the Organization and related organizations for the year.

  1. JOINT VENTURES

This Joint Venture Policy of the SDSU Alumni Association requires that the Organization evaluate its participation in joint venture arrangements under Federal tax law and take steps to safeguard the Organization’s exempt status with respect to such arrangements. It applies to any joint ownership or contractual arrangement through which there is an agreement to jointly undertake a specific business enterprise, investment, or exempt-purpose activity as further defined in this policy.

A. Joint ventures or similar arrangements with taxable entities. For purposes of this policy, a joint venture or similar arrangement (or a “venture or arrangement”) means any joint ownership or contractual arrangement through which there is an agreement to jointly undertake a specific business enterprise, investment, or exempt-purpose activity without regard to: (1) whether the Organization controls the venture or arrangement; (2) the legal structure of the venture or arrangement; or (3) whether the venture or arrangement is taxed as a partnership or as an association or corporation for federal income tax purposes. A venture or arrangement is disregarded if it meets both of the following conditions:

(a) 95% or more of the venture’s or arrangement’s income for its tax year ending within the Organization’s tax year is excluded from unrelated business income taxation [including but not limited to: (i) dividends, interest, and annuities; (iii) royalties; (iii) rent from real property and incidental related personal property except to the extent of debt-financing; and (iv) gains or losses from the sale of property]; and

(b) the primary purpose of the Organization’s contribution to, or investment or participation in, the venture or arrangement is the production of income or appreciation of property.

B. Safeguards to ensure exempt status protection. The Organization will: (1) negotiate in its transactions and arrangements with other members of the venture or arrangement such terms and safeguards adequate to ensure that the Organization’s exempt status is protected; and (2) take steps to safeguard the Organization’s exempt status with respect to the venture or arrangement. Some examples of safeguards include:

(a) control over the venture or arrangement sufficient to ensure that it furthers the exempt purpose of the organization;

(b) requirements that the venture or arrangement gives priority to exempt purposes over maximizing profits for the other participants;

(c) that the venture or arrangement not engage in activities that would jeopardize the Organization’s exemption; and

(d) that all contracts entered into with the organization be on terms that are arm’s length or more favorable to the Organization.

SDSU AA Code of Ethics 1|PageSept. 19, 2009