Conflicts of Interest Involving Sponsored Projects:
Conflicts of interest occur when researchers find themselves in situations in which their responsibilities to the institution are or may be compromised by their relationship with outside entities. This would usually occur when a researcher has a financial interest in a company that is either sponsoring the research project or could benefit from the results of the research project.
This does not mean that researchers cannot have external relationships with companies or other external entities. The involvement of researchers with companies can be very beneficial to the researchers, companies and/or the institution. Indeed, most situations present no problems at all. On the other hand, if researchers or members of their immediate families have a significant financial interest in a company, the institution needs to be informed of the situation and then review and manage or eliminate the conflict. A significant financial interest is defined as annual income of greater than or equal to $10,000 or greater than or equal to 5% equity holdings in a company that is either sponsoring the project or which could benefit from the results of the research. The value of the equity is determined by applying the fair market value to the percent holdings and determining whether it is greater than or equal to $10,000. When there exists a combination of both cash income and equity, the values are combined and a determination made whether the total meets to $10,000 rule. The definition of a significant financial interest is taken from the National Science Foundation Policy and the U.S. Department of Public Health Service regulation. The following are two examples of conflicts of interest that would be disclosed to the institution, and then reviewed and managed or eliminated. Each can be described in a sentence, but they more than likely would present complex issues that would require careful management.
- A researcher is the Principal Investigator of a sponsored project funded by Company A and he/she receives $10,000 annually as a consultant from Company B and Company B could benefit from the results of the research sponsored by Company A.
- A researcher is the Principal Investigator of a sponsored project funded by Company C and holds a position on the Company C's Scientific Board of Advisors and/or serves Company C as a consultant and receives annual income of $10,000 from Company C.
Disclosure of potential conflicts of interest is key because the institution must review each case and make a determination as to whether a conflict exists or not. To accomplish this, the institution has formed a Conflict of Interest Committee. Researchers cannot make this decision for themselves. It must be done by those having no financial interest at stake. It must also be done by those appointed by and representing the institution. The prime reason for this is that the institution, not the researcher, is the entity named as the grantee or contractor on sponsored projects.
While institutions can create policies, criteria, and guidelines, each case has its unique characteristics and must be evaluated on its own merits. Sometimes a case may present very obvious problems that must be managed. Sometimes two cases may be very similar and yet managed in very different ways. The bottom line is that each case must be reviewed in light of the policies of both the institution and the sponsor.
There are three categories of conflict situations: real conflicts of interest, situations that constitute potential conflicts, and situations that are likely to be perceived as conflicts of interest. Each type of conflict presents its own problems and require careful review and appropriate management or elimination. They all have one thing in common: unless they are addressed adequately, they will cause a loss of public trust in the institution and the research it conducts. For nonprofit institutions having public missions, the loss of public trust would be devastating. Over time, an institution that has a reputation for being indifferent to conflicts of interest can suffer a number of consequences. It can lead to a loss of prestige, a lessening of respect for faculty, suspicion that research findings are tainted, a loss of sponsored funding, and a loss of private donations.
