Category: Finance
Approval: Board of Trustees
Responsibility: Vice-Principal (Finance and Administration)
Date: October 12, 2018 (Amended December 6, 2024)
Purpose/Reason for Policy:
On occasion, it may be in the best interests of the university to become involved in the creation of an Affiliated Entity. On those occasions, the university must ensure that appropriate processes are in place to safeguard against potential risks and liabilities resulting from the creation, maintenance, and operation of an Affiliated Entity.
This policy provides a framework to guide the university in establishing and monitoring its relationships with Affiliated Entities. It also outlines the processes that must be followed and the approvals that must be obtained prior to the university becoming involved in the creation of an Affiliated Entity.
Scope of this Policy:
This policy applies to all Affiliated Entities.
The university has an additional Procedure Governing the Establishment, Reporting and Review of Research Centres, Institutes, and other entities at ³ÉÈË´óƬ that outlines the process to follow when establishing Research Centers and Institutes (as defined in that Procedure). Where such status is sought for an Affiliated Entity, that Procedure and this Policy and its associated procedures shall also be applicable.
Policy Statements:
The creation and activities of Affiliated Entities must support or complement the mission of the university.
Prior to the university participating in the creation of an Affiliated Entity it must undertake the appropriate due diligence to ensure that it has an understanding of the legal, financial, and other issues associated with its involvement with the Affiliated Entity.
The Board of Trustees and its Committees exercise oversight over Affiliated Entities through the following mechanisms:
- Approval of the establishment or the dissolution of Affiliated Entities (see Procedure to Create and Dissolve an Affiliated Entity).
- The requirement for an annual audit.
- Receipt of annual reports from the Vice-Principal (Finance and Administration) (see Procedure – Required Reporting by Affiliated Entities).
- Assessment of governance and financial skills on the governing body of any proposed Affiliated Entity.
- Receipt by the Governance and Nominating Committee (GNC) of the Board of Trustees of Queen’s University of a report after the first year of operation of the Affiliated Entity, as well as any follow-up reporting as required by GNC concerning the establishment of governance structures, practices and policies.
Affiliated Entities are also overseen by their own governing boards, which will include a Senior University Representative. To the extent possible, Affiliated Entities should adopt policies and procedures that are consistent with Queen’s University policies and procedures.
The University Secretary will initiate a review of the relationship with each Affiliated Entity in collaboration with the Vice-Principal (Finance and Administration) or delegate, and the applicable Senior University Representative at least every five years. If it is deemed that an Affiliated Entity is no longer required, the University Secretary will take appropriate steps to implement sun setting provisions, including seeking approval from the Board of Trustees of the university.
Responsibilities:
The Senior Leadership Team (SLT) is responsible for:
- ensuring that an Affiliated Entity is created to support or complement the mission of the university (through approval of the Preliminary Proposal); and
- reviewing and recommending approval to the Finance, Assets, and Strategic Infrastructure Committee, as appropriate, Detailed Proposals for the creation of Affiliated Entities.
The Board of Trustees is responsible for approving the creation and dissolution of Affiliated Entities, and, through its Finance, Assets and Strategic Infrastructure Committee, for providing governance oversight of the Affiliated Entities as outlined in the policy.
The Finance, Assets, and Strategic Infrastructure Committee is responsible for reviewing and recommending approval of the proposals for the creation and dissolution of Affiliated Entities to the Board of Trustees, and for receiving annual reports from the Vice-Principal (Finance and Administration) on Affiliated Entities.
The Governance and Nominating Committee is responsible to evaluate the governance and/or financial skills on the governing body of any proposed Affiliated Entity and to receive reports from the Affiliated Entity as detailed in this policy.
The Senior University Representative is responsible for briefing the Vice-Principal (Finance and Administration) at least annually on the operations of and risks associated with the Affiliated Entity.
The Vice-Principal (Finance and Administration) or delegate is responsible for providing oversight for the administration of the Affiliated Entity Policy and the related Procedures, and with the University Secretary, to review the relationships with the Affiliated Entity at least every five years.
The Vice-Principal (Finance and Administration) or delegate is also responsible to monitor the operations of Affiliated Entities.
The University Secretary is responsible for determining if an organization falls within scope of this Policy, and with the Vice-Principal (Finance and Administration) for reviewing the relationships with the Affiliated Entity at least every five years.
The Office of the Controller is responsible for administering this policy and related procedures and maintain a repository of required documents such as agreements with Affiliated Entities.
Definitions
Affiliated Entity: An Affiliated Entity is an organization that has been formed to support or complement the mission of the university, in which the university:
- holds at least a 20% ownership interest;
- in the case of not-for-profit entities, holds at least a 20% share of the membership or voting rights; or
- has the ability to appoint at least 20% of its directors or trustees or equivalent.
Senior University Representative: A university representative as designated by the Principal with full voting rights on the governing body of the Affiliated Entity.
Sponsoring Business Unit: The faculty or shared services unit that identifies the need for an Affiliated Entity.
Contact Officer: Associate Vice-Principal, Finance
Date for Next Review: 2029
Related Policies, Procedures and Guidelines: Affiliated Entities Procedure