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Board of Trustees Policy on Conflicts of Interest and Commitment for Senior Officers and Executives

Policy Information

Issuing Office

Board of Trustees of Liberty University


Affected Parties

For this policy, Senior Officers are: the President, Chancellor of Spiritual Affairs, Chief Operating Officer, General Counsel, Chief Financial Officer, Chief Investment Officer, Provost, Online Provost, Secretary, Assistant Secretary; and Executives are: the Executive Vice Presidents, Senior Vice Presidents, any other Vice President employed by the University, the Director of Athletics, the President of Freedom Aviation, Inc., and any other officers or employees of the University or its subsidiaries as the President or the Board of Trustees may, from time to time, determine.


Policy

Liberty University is committed to modeling for the students it trains to be Champions for Christ and the broader community how a Christ-centered institution should operate. That includes leadership that is above reproach, accountable and demonstrates good stewardship, exercising good faith in all transactions touching upon their duties to the University. Senior Officers and Executives are expected to maintain an admirably high standard of actual and apparent integrity in carrying out their duties to the University. By doing so, Senior Officers and Executives advance a culture of ethical behavior for the entire University where mere compliance with the minimum requirements of law is only the first step in upholding the ethical standards of this policy. This expectation applies, among other areas, to actual and apparent conflicts of interest and conflicts of commitment.

Senior Officers and Executives are expected to act in a manner consistent with their responsibilities to the University and to avoid circumstances where their financial or other personal ties to outside organizations could present an actual or potential conflict of interest or commitment or could discredit the University’s name and reputation. Senior Officers and Executives, by virtue of their position with the University, have influence over the University’s mission, vision, priorities and business decisions, and they are expected to consider their responsibilities to the University as their primary professional obligations. Senior Officers and Executives shall yield both to the legal counsel of the General Counsel on matters of legal compliance and to the spiritual counsel of the Chancellor of Spiritual Affairs in matters of business ethics. This policy is intended to give guidance to the Senior Officers and Executives about areas of conflicts of interest and conflicts of commitment so that conflicts, whether real or perceived, may be appropriately and timely identified, disclosed and resolved. This policy is not intended to discourage Senior Officers or Executives from being involved in community activities in their private capacities, particularly because those activities often will reflect favorably on both the officer/executive and the University. However, it is appropriate to put in place measures to avoid situations where these private activities could compromise or appear to compromise the interests of the University.


Conflicts of Interest

To maintain the integrity of Liberty University, Senior Officers and Executives should be free of any actual or apparent Conflict of Interests as they carry out their duties. A “Conflict of Interest” may arise when a Senior Officer/Executive, his or her Family Member (as defined below), or an entity with which the Senior Officer/Executive or Family Member is Associated (as defined below):

      1. has an existing or potential financial or other external interest that impairs or might reasonably appear to impair the Senior Officer/Executive’s independence of judgment in the discharge of his or her responsibilities to the University; or
      2. may receive a material financial or other benefit from the use or disclosure of non-public information pertaining to the University.

In determining whether a potential conflict of interest exists, the fact that the situation could subject the University to criticism, embarrassment, or litigation should be considered. A conflict of interest may also involve a situation where a Senior Officer or Executive’s outside activities are inconsistent with his or her responsibilities to the University.

Potential conflicts of interest must be disclosed and approved before the interested Senior Officer or Executive participates in any way in the matter to which the conflict relates and must be re-disclosed in the appropriate annual conflict of interest questionnaire for the fiscal year of the conflict(s) (the “Disclosure Statement”).


Gifts

When a Senior Officer or Executive accepts personal gifts from individuals or organizations that do business or seek to do business with the University, or that seek other forms of association or benefits from the University, this situation could raise a question as to whether the Senior Officer’s decisions are made with the University’s best interests foremost in mind. Therefore, to prevent any question of bias or favoritism, Senior Officers and Executives may not accept personal gifts in these situations, unless they meet the following criteria or unless they are disclosed and approved in accordance with this policy:

      1. the gift does not exceed $75 in value on an individual basis or cumulatively within a given fiscal year; or
      2. the gift is part of a broad-based promotion on the part of the giver involving standardized, nonsignificant gifts to persons holding particular positions.

This policy generally expects that gifts valued in excess of $75 will be made available to employees in general, be put to charitable use, or if neither solution is possible, be returned after consultation with the person to whom the Senior Officer or Executive is expected to report conflicts. In some circumstances, however, it may be acceptable for a Senior Officer or Executive to accept a gift, but in those circumstances prior to acceptance the gifts must be disclosed and approved in accordance with this policy. Even where approved, gifts must still be re-disclosed in the appropriate annual conflict of interest questionnaire for the fiscal year of the gift.

This policy is not intended to limit the ability of a Senior Officer or Executive to participate in a business meal or event that is directly and integrally related to his or her duties and where the meal or event is reasonable and comports with the overall professional standard of avoiding actual and apparent conflicts of interest. Such meals and events need not be disclosed or have prior approval. Other business-related meals and other business entertainment, such as attendance at a sporting event, cultural activity or other entertainment event, should be treated similarly to the process for prior approval of gifts unless the value or other circumstances triggering the need for approval cannot be reasonably discerned in advance, in which case prompt disclosure afterward is required.


Conflicts of Commitment

While Senior Officers and Executives often are able to make beneficial contributions of their time and talents to non-University endeavors, they should be mindful that undertaking Outside Activities could interfere with their primary obligations and commitments to the University and lead to a conflict of commitment. “Outside Activities” include leadership participation in professional, community, or charitable activities; any self-employment; any participation in business partnerships; and any employment or consulting arrangements with entities other than the University. Outside Activities may be either compensated or uncompensated.

Senior Officers and Executives should be sensitive to situations where Outside Activities may reasonably appear to present a conflict of commitment and err on the side of disclosure in these instances. In general, any leadership position with an organization or service on any board – for-profit, non-profit, advisory, honorary, or otherwise – will constitute an Outside Activity, and all efforts must be made so that such service does not materially interfere with the Senior Officer’s responsibilities and loyalty to the University.

Although Outside Activities will generally be allowed, certain activities are subject to limits. While participation in Outside Activities does not necessarily require prior written approval, the following Outside Activities do require prior written approval before any such participation begins:

  • If the Senior Officer or Executive reasonably expects to earn $10,000 or more per fiscal year from one or more Outside Activities; and
  • Any service on any board – for-profit, non-profit, advisory, honorary, or otherwise.
  • Any appointment as an officer of another organization or position of leadership with another organization that will require the Senior Officer or Executive to devote any significant amount of time during the regular work day to benefit the other organization; and
  • Any Outside Activity that may involve the utilization of University students, assets, or personnel.

When a Senior Officer or Executive engages in Outside Activities, he or she is expected to disclose them and, where applicable, receive approval for them in accordance with the procedures established in this policy. In addition, the Senior Officer or Executive will be expected to engage in a process that results in either assurances that there will be no material interference with University responsibilities or a decision to withdraw from such Outside Activities.


Adoption of Policies

The President, in consultation with the General Counsel and the Chief Financial Officer, is obligated to cause the University to adopt written conflict of interest policies more generally applicable to the University community, including University subsidiaries, with an initial set of new or updated policies consistent with this Policy to be adopted no later than January 15, 2022. Those policies may involve processes, procedures and limitations that are more stringent than those provided in this policy. The Audit Committee should receive updates on the University’s approach to addressing conflicts of interest no less frequently than every other year, or when there are material changes to the material conflict of interest policies of the University.


Procedures

Disclosure Process

This policy requires Senior Officers and Executives to acknowledge this policy and the officer’s compliance with the policy, in letter and in spirit. Specifically, each Senior Officer and Executive is required to:

  • when initially appointed or hired, and annually thereafter, acknowledge in writing that he or she has reviewed this policy and is complying with it, in letter and in spirit;
  • when initially appointed or hired, and annually thereafter, complete a Disclosure Statement in the form prepared by the General Counsel in consultation with the Chief Financial Officer and as approved by the Audit Committee and distributed by the Secretary; and
  • disclose actual or potential conflicts of interest or of commitment at any time when the Senior Officer or Executive becomes aware of them.

The Secretary is responsible for distributing this policy and the Disclosure Statements and collecting signed Disclosure Statements at the time a Senior Officer or Executive is first appointed or hired. Annually, the Secretary will disseminate this policy and provide annual Disclosure Statements to all Senior Officers and Executives in the fall. Completed annual Disclosure Statements shall be due to the Secretary by November 30 of each year.

In addition to the completion of annual Disclosure Statements, Senior Officers and Executives are expected to report potential Conflicts of Interest or Conflicts of Commitment when a situation arises by disclosing the potential conflict to the Secretary, or in the case of the Secretary, to the President. The obligation to report situations as they arise is in addition to the annual completion of a Disclosure Statement.


Review and Resolution of Disclosures and Requests for Approval of Receipt of Gifts

After receiving disclosures from the Senior Officers and Executives, the Secretary will summarize the material information contained in the Disclosure Statements or other disclosure and timely deliver a report to the President of the University, the Chief Financial Officer and the Audit Committee.

With respect to Senior Officers and Executives, the resolution of any actual or perceived Conflict of Interest or Conflict of Commitment that is identified by the Secretary will be determined by the President; provided that the resolution of actual or perceived Conflicts of Interest or Conflicts of Commitment with respect to the President, Chancellor of Spiritual Affairs, Chief Financial Officer or Internal Auditor will be determined in consultation with the Chairman of the Audit Committee and subject to the approval of the Audit Committee or Board of Trustees. All decisions of the President (or the Audit Committee or the Board of Trustees, as the case may be), to approve or disapprove a conflict, or to require a management plan specifying the actions to be taken to implement such plan, will be reduced to writing and sent to the Secretary and to the employee within ten business days of the approval or disapproval.

With respect to Senior Officers and Executives other than the President, Chancellor of Spiritual Affairs, Chief Financial Officer or Internal Auditor, the determination of whether it is appropriate to accept a gift will be determined by the President, and the President will provide a written record of any approval to the Secretary with ten business days of the President’s action. The determination of whether it is appropriate for the President, Chancellor of Spiritual Affairs, Chief Financial Officer or Internal Auditor to accept a gift will be determined by the Chairman of the Audit Committee, who may seek the approval of the Audit Committee or Board of Trustees. The Chairman of the Audit Committee will disclose any gift approvals to the full Audit Committee, unless the Audit Committee or Board of Trustees previously approved the gift.


Policy Rationale

To maintain the integrity of Liberty University, the Board of Trustees, which is responsible for establishing broad institutional policies, has determined that Senior Officers and Executives should be free of inappropriate influence and even the appearance of any conflict of interest as they carry out their duties.


Definition of Glossary Terms

“Associated” means the following type of relationship to a trust, partnership, corporation, association, or other organization or enterprise:

      1. when the person is a director, trustee, officer, employee, or partner of such an entity; or
      2. when the person has a financial interest that represents 5% of the entity’s ownership or assets (or, in the case of a publicly held corporation, 1% of the corporation’s outstanding capital stock), or any interest that enables him/her materially to influence policies of such an entity.

“Conflict of Commitment” arises when a Senior Officer or Executive undertakes Outside Activities that interfere with the Senior Officer or Executive’s primary obligations and commitments to the University.

“Conflict of Interest” may arise when a Senior Officer/Executive, his or her Family Member, or an entity with which the Senior Officer/Executive or Family Member is Associated:

      1. has an existing or potential financial or other external interest that impairs or might reasonably appear to impair the Senior Officer or Executive’s independence of judgment in the discharge of his or her responsibilities to the University; or
      2. may receive personally a material financial or other benefit from the use or disclosure of information confidential to the University.

“Family Member” means a person’s spouse, ancestors, descendant’s (whether by blood or adoption), and siblings (whether by whole or half-blood or by adoption) and, in each case, their spouses.

“Gift” is any transfer of an item of value (including a trip, event admission, beverage/meal, personal belongings, or special concessions in connection with personal business) for less than fair market value, including a personal discount.

“Outside Activities” include leadership participation in professional, community, or charitable activities, any self-employment, any participation in business partnerships, and any employment or consulting arrangements with entities other than the University. Outside Activities may be either compensated or uncompensated. In general, any service on any board – for-profit, non-profit, advisory, honorary, or otherwise – will constitute an Outside Activity.

Procedural Information

Application of Policy

Senior Officers or Executives who have questions about the application of this policy to a particular situation, or about the required Disclosure Statement, should seek advice from the General Counsel and/or the Chancellor for Spiritual Affairs. Nothing in this policy is intended to limit the application of any other policy of the University. Questions about the interactions of multiple policies should be directed to the General Counsel.


Sanctions

Violation of the policy can lead to administrative action, up to and including termination.


Exceptions

None


Revision History

April 16, 2021
Updated November 5, 2021

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