Affiliated Entities (Affinity Principles)
Policy Number: 3349-03-190
Effective Date: 06/25/2014
Responsible Department: Office of the President, Office of the Vice, President for Administration and Finance, Office of the General Counsel
Applies To: All Affiliate Entities
Considerations for Creation of Affiliates
Policy Issues: “Will the Affiliate Serve the Best Interests of the University?”
- Is the Affiliate formed to achieve a public purpose which is consistent with the mission of the University?
- Does the Affiliate have a plan which has a reasonable probability of success? Have the appropriate internal constituencies been consulted (e.g., faculty, affected departments, etc.)?
- Will the Affiliate’s activities conflict or complete with existing university activities
- How will the Affiliate be received by external constituencies?
Financial Issues: “What are the Financial Implications of Establishing the Affiliate?”
- Has a thorough and credible budget and/or business plan been prepared?
- What level of financial support is expected to be provided by the University, does it serve a public purpose, the mission of the University and is it reasonable and appropriate?
- What are the financial risks to the University and how are they addressed?
- If the Affiliate will use University facilities or services, is proper reimbursement assured?
- What is the proposed distribution of the Affiliate’s revenues and surplus?
- What are the provisions for recovery of University investment?
Governance Issues: “Is the Appropriate Governance Structure Established?”
- Who should represent the University on the Affiliate’s Board of Directors?
- Are the proposed University Representatives for the Board of Directors qualified to oversee the mission and operations of the Affiliate?
- Has responsibility for supervision of the activities of the Affiliate been clearly delegated to an official (e.g., vice president or dean) within the University?
- Has a timeline been established for performance review and assessment?
- Is the inclusion of reserve powers in the Affiliate’s governing documents appropriate?
Legal Issues: “Are there Adequate Safeguards to Avoid or Minimize Legal Risks and Financial Exposure?”
- Is the Affiliate properly structured to maintain the appropriate degree of separation from the University?
- If University employees will be involved with the Affiliate, have they complied with all University employment policies?
- Is there a plan to manage real or potential conflicts of interest?
- What are the risks of legal liability that may result from the activities of the Affiliate?
- Are these risks adequately insured? What level of risk is the University prepared to accept?
- Will the activities of the Affiliate give rise to questions regarding ownership of intellectual property?