What is a conflict of interest Disclosure Statement

[INSERT NAME OF CHARITY]

1. Purpose

The purpose of this policy is to help board members of [charity] to effectively identify, disclose and manage any actual, potential or perceived conflicts of interest in order to protect the integrity of [charity] and manage risk.

2. Objective

The [charity] [board, committee of management or other governance structure as relevant] (called the ‘board’ in this policy) aims to ensure that board members are aware of their obligation to disclose any conflicts of interest that they may have, and to comply with this policy to ensure they effectively manage those conflicts of interest as representatives of [charity].

3. Scope

This policy applies to the board members of [charity].

[It may be appropriate for your policy to apply to other people who work within the charity or for the charity, for example, managers. If you include people other than board members, you will need to change the policy to take this into account by adding their roles or positions here].

4. Definition of conflicts of interests

A conflict of interest occurs when a person’s personal interests conflict with their responsibility to act in the best interests of the charity. Personal interests include direct interests, as well as those of family, friends, or other organisations a person may be involved with or have an interest in (for example, as a shareholder).

It also includes a conflict between a board member’s duty to [charity] and another duty that the board member has (for example, to another charity). A conflict of interest may be actual, potential or perceived and may be financial or non-financial.

These situations present the risk that a person will make a decision based on, or affected by, these influences, rather than in the best interests of the charity. Therefore these situations must be managed accordingly.

5. Policy

This policy has been developed to address conflicts of interest affecting [charity].

Conflict of interest are common, and they do not need to present a problem to the charity as long as they are openly and effectively managed.

It is the policy of [charity], as well as a responsibility of the board, that ethical, legal, financial or other conflicts of interest be avoided and that any such conflicts (where they do arise) do not conflict with the obligations to [charity].

[Charity] will manage conflicts of interest by requiring board members to:

• avoid conflicts of interest where possible
• identify and disclose any conflicts of interest
• carefully manage any conflicts of interest, and
• follow this policy and respond to any breaches.

5.1. Responsibility of the board

The board is responsible for:

• establishing a system for identifying, disclosing and managing conflicts of interest across the charity
• monitoring compliance with this policy, and
• reviewing this policy on an annual basis to ensure that the policy is operating effectively.

The charity must ensure that its board members are aware of the ACNC governance standards, particularly Governance Standard 5, and that they disclose any actual or perceived material conflicts of interests as required by Governance Standard 5.

5.2. Identification and disclosure of conflicts of interest

Once an actual, potential or perceived conflict of interest is identified, it must be entered into [charity]’s register of interests, as well as being raised with the board.

Where every other board member shares a conflict, the board should refer to ACNC Governance Standard 5 to ensure that proper disclosure occurs.

The register of interests must be maintained by [person/role]. The register must record information related to a conflict of interest (including the nature and extent of the conflict of interest and any steps taken to address it).

5.3. Confidentiality of disclosures

[This section should contain details of who will have access to the information disclosed, such as restricting access to board members and/or those who fulfil specific roles. It may also be necessary to provide for an alternative way to make the disclosure if additional restrictions on disclosure are required].

6. Action required for management of conflicts of interest

6.1. Conflicts of interest of board members

Once the conflict of interest has been appropriately disclosed, the board (excluding the board member who has made the disclosure, as well as any other conflicted board member) must decide whether or not those conflicted board members should:

• vote on the matter (this is a minimum),
• participate in any debate, or
• be present in the room during the debate and the voting.

In exceptional circumstances, such as where a conflict is very significant or likely to prevent a board member from regularly participating in discussions, it may be worth the board considering if it is appropriate for the person conflicted to resign from the board.

6.2. What should be considered when deciding what action to take

• In deciding what approach to take, the board will consider whether the conflict needs to be avoided or simply documented
• whether the conflict will realistically impair the disclosing person’s capacity to impartially
• participate in decision-making
• alternative options to avoid the conflict
• the charity’s objects and resources, and
• the possibility of creating an appearance of improper conduct that might impair confidence in, or the reputation of, the charity.

The approval of any action requires the agreement of at least a majority of the board (excluding any conflicted board member/s) who are present and voting at the meeting. The action and result of the voting will be recorded in the minutes of the meeting and in the register of interests.

7. Compliance with this policy

If the board has a reason to believe that a person subject to the policy has failed to comply with it, it will investigate the circumstances.

If it is found that this person has failed to disclose a conflict of interest, the board may take action against them. This may include seeking to terminate their relationship with the charity.

[Insert any other relevant sanctions that are proportionate to the seriousness of a breach]

If a person suspects that a board member has failed to disclose a conflict of interest, they must [description of relevant action, such as: discuss with the person in question, notify the board, or the person responsible for maintaining the register of interests].

Contacts

For questions about this policy, contact the board or [person/role] by [contact details].

Did you know that competing interest declarations, acknowledgments and notes on contributors are all openly available to view on all articles on Taylor & Francis Online? This ensures transparency of key information and helps potential readers to evaluate articles more easily.

“Foreign espionage” sounds more like a Tom Cruise movie than a research concern, but the National Institute of Health (NIH) has gotten increasingly worried about it over the past year—specifically, in the biomedical research field. The NIH has taken significant steps to prevent other countries from stealing U.S. research, including investigating more than 55 research institutions for undisclosed ties to foreign organizations. 

As a result, conflict of interest disclosure is more vital than ever. Keep reading to find out the risks of nondisclosure, potential conflicts of interest, and what the disclosure process entails.

Why does COI disclosure matter?

“With the increased federal scrutiny regarding foreign influence on U.S. research, ensuring that all persons involved in research disclose outside interests has never been more important,” says Susan Wyatt Sedwick of Attain LLC. But federal scrutiny isn’t the only reason to disclose. Here are several others:

Compliance: Researchers have to demonstrate that they adhere to applicable state and federal regulations that were designed to protect intellectual integrity and accuracy, similar to IRB, IBC, and IACUC compliance. 

Credibility is at stake: Research should be as objective as possible, not only to uphold high ethical standards, but to maintain public trust. The reputation of the researcher and institution could be irreparably ruined through a public relations fiasco.

Fines or loss of funding: Failure to disclose can result in fines from thousands to millions of dollars, and grants can be suspended.

Loss of employment: Researchers who fail to disclose could be fired or forced to resign, and the conditions of which could make finding a new position difficult.

Criminal charges: In Alabama and Colorado, it’s a misdemeanor to fail to disclose a conflict of interest. In Wyoming, you can go to prison for up to six months!

Inability to publish: Researchers found to be in noncompliance may be barred from submitting work to research journals for a period of time.

Investigation: Federal agencies employ inspectors to conduct investigations if there are reports of research misconduct or noncompliance. Agency investigation is an unpleasant experience akin to being audited.

Not exactly sure what constitutes a conflict of interest? Let’s break it down.

What’s a conflict of interest?

You can’t be a judge and a contestant on Dancing with the Stars. That’s a pretty obvious conflict of interest. The same concept applies in research, but it gets tricky because most situations aren’t that simple.

According to the University of California, San Francisco, a conflict of interest is “a situation in which financial or other personal considerations may compromise, or have the appearance of compromising a researcher’s professional judgment in conducting or reporting research.” It can exist in any type of research, whether it involves humans, animals, chemicals, soil, and so forth. 

It’s important to note that everyone has financial and personal relationships outside of work, and those relationships aren’t necessarily bad or influence the outcomes of a study. In research, however, they need to be reported and evaluated to determine whether they constitute a conflict of interest (COI). “The existence of a conflict of interest does not imply any wrong-doing,” explains Brown University. “Conflicts of interest are not in and of themselves unethical or impermissible. Indeed, they are often unavoidable, and in many cases can be appropriately managed or reduced to an acceptable level.”

If an outside interest isn’t disclosed, it could bias research results or how they are reported—for example, minimizing certain results and emphasizing others. It might not even affect research, but it could give the appearance of bias, which may be enough for a conflict of interest. If you’re judging Dancing with the Stars and one of the contestants is your spouse’s cousin’s neighbor, it could look like you’re biased, even if you didn’t actually know the relationship existed!

Types of conflicts of interest

The most obvious type of conflict of interest is financial. If you’re a principal investigator and a doughnut company gives you $20,000 to study the health benefits of doughnuts, the results will be scrutinized and suspected of bias. The scrutiny is warranted: A report found that when food companies sponsor research, it’s much more likely for study findings to be positive than when independent entities fund the research. Or if someone on your research team owns stock in a pharmaceutical company and then studies the effectiveness of its medication, the study will face similar skepticism. 

Financial conflicts of interest (FCOI) may be the most well-known types, but non-financial conflicts of interest must be accounted for as well. Researcher and rheumatologist Dr. Paul Romain argues that non-financial outside interests may affect researchers’ professional judgment even more than financial interests—for example, wanting to replicate a colleague’s previous research findings, or validating someone’s political beliefs.

A relationship could be a conflict of interest if:

• Your spouse, relative, or household member works for an “external entity” (e.g., research sponsor or publicly traded company)
• Certain study results could advance your career or lead to a promotion
• You serve on a company’s board
• You volunteer for an organization
• A company gives you a gift or pays for equipment
• You are a consultant or lecturer for a company
• You provide expert legal testimony (on behalf of a company or not)
• You founded a company, even if it has no employees or revenue yet

The goal is not to eliminate these relationships, but to be transparent and forthcoming about them so that a third-party review can determine whether it’s a conflict of interest and if it can be managed.

Who has to disclose a conflict of interest?

Different institutions have different rules for COI disclosures. Some mandate that only researchers need to disclose interests, while others require all faculty and staff to complete conflict of interest disclosures. Check the policies and procedures at your institution so you know whether you need to participate.

The disclosure process

Many research organizations have an annual disclosure process, with the stipulation that if a researcher’s relationship with an external organization changes, s/he must disclose it within 30 days. Some institutions require research-based disclosures which must be submitted for each new grant proposal or project. In any case, individuals must disclose interests before a study begins. 

Disclosing outside interests entails filling out a form with various types of relationships (stock, gifts, travel, etc.), checking off any that apply to the researcher and his or her family members, and specifying the details of any relationships that do apply (e.g., dollar value of speaking fees received in the past 12 months, if it’s over $5,000). 

The review process

After a COI disclosure is submitted, it is reviewed by a group such as the COI Office, Office of Research Integrity, Compliance Office, Office of Sponsored Programs, etc. If there is nothing to disclose, or a relationship does not constitute a conflict of interest, it is called a “negative disclosure.” The vast majority of researchers have nothing to disclose!

If the researcher does have qualifying outside interests to disclose, reviewers determine whether it’s a conflict of interest. They consider the size, nature, and duration of the relationship, among other factors, as well as how the public may perceive it. If necessary, reviewers request more information about the relationship.

If reviewers determine an outside interest is a COI, then it’s called a “positive disclosure,” and  they decide whether or not it can be managed so the research may proceed. One study found that of financial relationships disclosed, only 1 in 4 constituted a conflict of interest that needed to be managed. Managing an outside interest could entail reducing or eliminating the relationship, disclosing it to study participants and the public, changing the researcher’s role on the project, or changing aspects of the research. In rare cases, the compliance group might say the COI is unmanageable and that the research cannot proceed.

Conclusion

Disclosing may sound fairly straightforward, but it’s quite time-consuming if the process is paper-based, with many spreadsheets needing to be manually updated and physical files stored in cabinets. As a result, researchers are often reluctant to participate. Reviewing the disclosures is cumbersome and involves multiple processes managed by different departments. Reporting on disclosure submission and status is also tedious, with low data integrity.

And yet disclosure is absolutely necessary. It may be a hassle, but it is certainly preferable to the consequences. With so much at stake, the conflict of interest process is vital to ensure the future of research integrity and public regard for science.

Interested in simplifying the conflict of interest disclosure and review process? Learn how Outside Interests can make disclosures painless.