4.3 Consulting and Other Outside Professional Activities by Members of the Academic Council and Medical Center Line Faculty

Establishes limits on the amount of time that may be spent on outside consulting activities by Stanford faculty, and describes procedures for implementing this policy. 2003 clarification relates to consulting and outside management responsibilities.

On September 7, 2010, the University Provost implemented a requirement for faculty to provide the summary of Stanford University Requirements for Faculty Consulting Activities and Agreements whenever entering into a consulting or non-disclosure agreement. You can also find the document in the Related Items section below.

Authority

Senate of the Academic Council

Contact

Questions about this policy can be answered by:

Arvin, Ann Margaret

Vice Provost and Dean of Research

Vice Provost and Dean of Research

650-725-4421

1. Principles and General Standards

This policy is applicable to all members of the Stanford faculty (Academic Council and Medical Center Line) including faculty members serving as University officers. (See the Stanford Faculty Handbook for policies governing those with consulting, visiting and acting faculty appointments and the School of Medicine Faculty Handbook, Chapter 8, Section 8.6.C, for policies governing Clinician Educators.)

The purpose of the policy on consulting and related activities is to state with both clarity and generality the limits on such activities and the reasons for those limits. Consulting and other outside professional activities can provide an important means of continuing education for the faculty and can provide them with a currency and experience in aspects of their professional fields outside the context of the University itself. These activities can also provide a mechanism for transfer of knowledge from the University to the public good. Though such attributes of consulting may make faculty better scholars and teachers, the employer-employee nature of the consulting process has in it the potential for diversion of faculty from their primary activities and responsibilities. Therefore, the basic principle of this policy statement is that there needs to be a limitation upon the time that a Stanford faculty member may spend in consulting. The limits set forth below are intended to strike a fair balance between consulting and regular faculty duties within the University and serve to safeguard the interests of both parties.

Though comprehensive, the policy cannot deal unambiguously with every instance of consulting or other outside professional activities. In cases of doubt, the primary guide should be the intention to promote the interests of the University as a place of education, learning, and research. Whenever uncertainty exists, it is the faculty member’s obligation to obtain prior consent from the appropriate University officer.

See also the summary below Attachment A: Faculty Consulting Policies, distributed by the University Provost September 7, 2010, and the document “Stanford University Requirements for Faculty Consulting Activities and Agreements.

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2. Definition of "Consulting"

In general, consulting is defined as professional activity related to the person's field or discipline, where a fee-for-service or equivalent relationship with a third party exists.

There are many types of consulting relationships and fee arrangements, and the precise form entered into may vary. The principle is that, in consulting, a person agrees to use his or her professional capabilities to further the agenda of a third party, in return for an immediate or prospective gain. Activities or titles that constitute or imply managerial or supervisory responsibility are not permitted under Faculty Conflict of Commitment and Interst policy, and are not allowable as consulting relations. Titles such as CEO, Director, Scientific Officer, or Vice President, etc., are designations generally assigned to people with line management responsibilities. Faculty must avoid titles that include terms such as executive, officer, director, manager, or chief as they imply or indicate management responsibilities and create real or perceived conflicts of commitment. Situations arise in which a Stanford faculty member is chosen to serve on a Board of Directors of a company, or on a company's advisory council or scientific advisory board. These appointments and titles are different from managerial roles and titles, and are permitted as consulting relationships.

Several types of faculty activity, other than regular University duty, are not “consulting.” These are:

A. Publication

Scholarly communications in the form of books, movies, television productions, art works, etc., though frequently earning financial profit for a faculty member and for another party (e.g., publisher), are not viewed as consultation. To attempt to distinguish between types of books, to assess the roles of book publication in different disciplines, or to challenge the historical relation between authorship and manuscript ownership would be fraught with danger and confusion. These reservations apply equally to the other types of scholarly communication cited above. However, faculty may not publish articles or other forms of scholarly communication under their own names in the course of their outside professional activities that are written in whole or material part by employees of the outside entity (i.e., “ghost written”). If a faculty member is listed as an author on any publication resulting from performance of consulting services, a disclosure should be included stating that the work was done as a paid consultant and was not part of the individual's Stanford duties and responsibilities.

B. Professional Service (Other Outside Professional Activities)

Under this rubric falls service to national commissions, governmental agencies and boards, granting agency peer review panels, philanthropic organizations or charities, professional societies, visiting committees or advisory groups to other universities, and analogous bodies. The fundamental distinction between these activities and consulting is that they are public or University service. Although an honorarium or equivalent sometimes is forthcoming, these professional service activities are not undertaken for personal financial gain. Therefore, such service does not fall within the consulting category as defined by Stanford policy. However, federal regulations related to PHS-funded research consider income provided for service to some foundations and professional societies to be consulting and reporting is required PHS and NSF Requirements Regarding Financial Disclosures and Agency Notifications in RPH. In addition, even activities such as pro bono work, government service in the public interest, and any outside employment unrelated to the faculty member's University responsibilities (therefore not included as "consulting" in the policy on outside consulting), should be managed so they do not take precedence over a faculty member's primary commitment to the University.

C. "Moonlighting"

Faculty members may pursue a variety of endeavors for financial profit that are not directly related to the person's field or discipline. These efforts are part of the faculty member's private life and do not come under University regulation or this consulting policy. To emphasize again, however, such endeavors may only be pursued after the full-time commitment to Stanford has been fulfilled. Faculty in the School of Medicine must adhere to policies on “moonlighting” when it involves providing clinical care.

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3. Number of Permissible Consulting Days

Consulting is permitted provided the faculty member's full-time obligation to the University is met. The maximum number of consulting days permissible for a member of the Academic Council or the Medical Center Line Faculty on a full-time appointment is 13 days per academic quarter. This limit is based on a judgment about incentives and is aimed at furthering Stanford's teaching and research objectives; it is not derived from accounting principles. University holidays are included in each 13-week academic quarter from which the 13-day consultation limit is derived. A limited amount of “averaging” of consulting time among full-time quarters is permissible if, on occasion, a faculty member plans to consult for more than 13 days in one quarter but no more than 39 days for three academic quarters (the Guidelines for Policy Implementation, below, deal with averaging in more detail). Thirteen days of consulting per quarter, or 52 days for four quarters of active duty, is intended to be a liberal allocation, yet one that is fair to the University. In addition to this general policy on consulting, University policies exist or may be instituted in individual schools or academic units, e.g., those currently applying to full-time faculty members in clinical departments of the Medical School.

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4. Responsibilities of Faculty Members

The responsibility for adhering to the limit on consulting days, and other aspects of Stanford's consulting policy, lies first with the individual faculty member. Faculty members should resolve any questions and/or ambiguities with their department chairperson or dean before the fact, so that the University community is not injured by their actions. The University has the right, and indeed the obligation, to protect itself from losses due to excess consulting and to seek reimbursement from the faculty member for salary and benefits covering time spent on consulting beyond the limits provided for by this policy, especially in cases where amounts are significant and the faculty member did not seek prior consultation or follow the advice given by his or her department chairperson or dean. Faculty members have an obligation to report fully the level (i.e., number of days) of their consulting activities when asked to do so by the University so that it may be determined whether the principles set forth herein are being adhered to.

Furthermore, faculty must disclose their financial interests in outside entities that are related to their institutional responsibilities for research/scholarship, teaching/education, administration or clinical care as required by the Faculty Policy on Conflict of Commitment and Interest in RPH.

NOTE: Faculty entering into a consulting or non-disclosure agreement with a commercial entity must provide to that entity a copy of the attached summary of Stanford University Requirements for Faculty Consulting Activities and Agreements.

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5. Guidelines for Policy Implementation

A. General

The nature of the consulting work should in no way detract from the prestige of the University or the professional stature of the faculty member. Consulting obligations undertaken should conform to this objective.

B. Averaging

Full-time Academic Council members who expect to consult for more than 13 days in any one academic quarter, but not more than 39 days in the academic year, should so inform their department chairperson or dean on a prospective basis. A reasonable amount of “averaging’’ over the quarters of the academic year (or the full year, if the person is at 100 percent time for all four quarters) ordinarily is acceptable, although particular circumstances such as teaching loads or the terms of support under grants or contracts will need to be taken into account. Averaging of consulting time from quarters of less than full-time service to quarters of full-time service is not permitted.

C. Consulting During Periods of Part-Time University Employment

The 13-day limit should be pro-rated for those members of the Academic Council holding part-time appointments, using the following formula: [13 x F] + [(1-F) x 6 x 13], where F is the fraction of full-time duty, 13 represents the average number of weeks per quarter, and 6 represents the maximum number of days per week which are likely to be devoted to professional activities during the period of off-duty time. Thus, a faculty member holding a 75% appointment is permitted up to 29-1/4 days of consulting per quarter.

D. Consulting During the Fourth Quarter or During Periods of Leave Without Salary

Faculty members on nine-month appointments with no salary supplement for the fourth quarter (usually, but not always, the summer quarter) are not subject to the 13-day limit during that quarter. Nor does the limit apply to faculty members on leave without salary. The 13-day limit should be prorated on the basis of one day per calendar week of duty time for those on leave without salary for less than a quarter.

If the faculty member receives a 3/9 salary supplement for the fourth quarter the regular 13-day consulting limit shall apply. If the appointment is for less than 3/9 time, one of two conditions applies: (a) the appointment specifies a particular calendar period as “on duty,’’ in which case the regular consulting policy applies during that period and there is no limit during the remaining time; or (b) the appointment is at part-time for all or part of the quarter, in which case the above paragraph applies.

E. Consulting While on Sabbatical Leave

The purpose of sabbatical leave is to permit faculty members to take time off from normal University duties to advance their scholarly interests so that they may return to their posts with renewed vigor, perspective, and insight. A faculty member on sabbatical leave receiving full-time University salary may consult up to the regular 13-day limit per quarter during the period of sabbatical. A person on sabbatical receiving less than full-time University salary may supplement income up to the full-time equivalent salary, and in addition, may devote up to a maximum of 13 days per quarter to consulting.

F. Hourly Consulting

Some consultation is carried out by the hour and not by the day. In such cases, a total of 130 consulting hours is permitted per full-time academic quarter. Stipulation of this total, as opposed to an hour-to-day conversion formula, permits faculty members added flexibility in carrying out consulting and still protects the primary interests of the University. The figure 130 does not derive from accounting principles, but stems from subjective judgments about the length of average faculty work days, the work days of businesses employing consultants, and the desire to accommodate legitimate needs of some University faculty. For those individuals who consult on both a daily basis and an hourly basis during one academic quarter, a formula of one consulting day equals 10 consulting hours should be used in calculating total consultation time.

G. Use of University Facilities or Services

The facilities and services of the University may not be used in connection with compensated outside work, except in a purely incidental way.

H. Conflict of Interest

In April 1994 the Senate of the Academic Council approved the Faculty Policy on Conflict of Commitment and Interest, which states in part:

"An implicit assumption underlying the University's [consulting policies] is that such outside professional activities are a privilege and not a right and must not detract from a faculty member's full-time obligation to his or her University duties."

Consulting agreements involving Stanford faculty should specifically address this concern by acknowledging that:

  1. The primary duty of the Consultant, who is a Stanford faculty member, is to Stanford University
  2. The Consultant is subject to Stanford's policy on outside consulting activities of its faculty
  3. The Consultant may have obligations to Stanford by reason of agreements between Stanford and external organizations for research or other activities performed in part by the Consultant in fulfilling his/her duties to the University

In addition, faculty are required to disclose to the University whether they (or members of the immediate family) have consulting arrangements, significant financial interests, or employment in an outside entity before the University will approve the following proposed arrangements between such entities and Stanford: a) gifts; b) sponsored projects; c) technology licensing arrangements; and d) procurements.

On an annual basis, and when situations arise that require disclosure as specified in the Faculty Policy on Conflict of Commitment and Interest, all faculty members must certify to their school deans their compliance with Stanford's policies related to conflict of commitment and interest.

6. Attachment A: Provost's 2010 Letter on Faculty Consulting Policies, including required Stanford University Requirements for Faculty Consulting Activities and Agreements

ttachment A to RPH 4.3: Consulting and Other Outside Professional Activities by Members of the Academic Council and Medical Center Line Faculty

Date: Promulgated by the University Provost, September 7, 2010

Dear Colleagues,

As you know, Stanford encourages research relationships with other entities as a way to foster the transfer of knowledge gained through University research and scholarship for societal benefit. We also recognize, however, that our concern to preserve openness in research may be at odds with the need of for-profit companies to keep research information and materials proprietary. With these differences in mind, I would like to review Stanford’s policies governing two types of agreements that faculty enter into without direct University oversight. These are personal consulting agreements and non-disclosure agreements (NDAs). As a Stanford faculty member, it is your responsibility to know the principles and policies that must be followed when entering into such agreements.

If you enter into a consulting or non-disclosure agreement with a commercial entity, a copy of the attached summary of Stanford University Requirements for Faculty Consulting Activities and Agreements must be provided to the company.

Consulting:

Any consulting agreements with outside entities should carefully delineate and separate your university responsibilities from consulting responsibilities. Specifically, these agreements must not involve or address Stanford University, or its resources and people, including students, postdoctoral scholars and staff. You are responsible for making sure that your consulting activity and the terms of any written agreements are consistent with requirements of the faculty Conflict of Commitment and Interest policy and your university obligations related to inventions and other intellectual property . The School of Medicine also prohibits consulting that is solely or primarily for commercial marketing purposes. To avoid confusion, correspondence and agreements related to consulting activities must not use Stanford letterhead or appear to be Stanford documents. Finally, facilities and services of the University may not be used in connection with your consulting, except in a purely incidental way.

Non-Disclosure Agreements:

In their capacity as University employees, Stanford faculty and staff may not engage in confidential work for an entity other than Stanford. Confidential work for another entity may only be pursued during time allowed for consulting.

Any confidential information received for research purposes at Stanford must be incidental to University research activities and may not interfere with the participation of anyone at Stanford in the intellectually significant portions of the research activity Openness in Research Policy. Within these important limits, if it becomes necessary for you to share confidential information with, or receive information from, another entity for your work at the University, you may personally sign a Confidentiality Disclosure Agreement (CDA) or Non-Disclosure Agreement (NDA). The agreement must state clearly that you are signing in your individual capacity and covers only your own activities. If it is necessary for those you supervise to receive confidential information, they must separately sign a confidentiality agreement, but only if the confidential information to be received is incidental and with approval of your school dean. (See also Export Control information.)

Some CDAs or NDAs presented to faculty for signing may contain intellectual property provisions impacting Stanford’s rights in patents, copyrights, or patentable technology or copyrightable works. Faculty may not sign any agreement that could affect Stanford’s or other Stanford researchers’ rights in intellectual property or your Stanford obligations related to intellectual property.

The CDA/NDA must not include Stanford University as a party. Individual researchers, faculty members and other employees have no authority to sign CDAs or NDAs on behalf of the University, their school or department, or any other division or department of the University. Stanford generally does not sign CDA/NDAs on behalf of the University, because there is no institutional mechanism to ensure the confidentiality of information received.

NOTE: The summary of Stanford’s policies will be available for downloading on the Research Policy Handbook website, the Office of Technology Licensing , and from your school dean’s office.

Please contact your school dean’s office or the office of the Dean of Research to discuss any questions that you may have concerning consulting agreements; the Industrial Contracts Office will advise about CDA/NDAs related to your Stanford work.

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