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A Working Paper Prepared by the Government Issues Committee of the Alma Mater Society

Sarah Corman
Rodger Scott
Christopher Henderson
Neil Thompson
John Brodhead
Andrew Cowan
Erin Young
Dave Contant
Scott Affleck

April 2000

This paper received the unanimous approval of AMS Assembly on April 6, 2000.

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Contents

Part One: The Issues

• 1.1 Introduction
• 1.2 Corporate Involvement at Universities
• 1.3 The Absence of Guidelines and the Slippery Slope
• 1.4 The Purpose of this Paper

Part Two: The Queen's Landscape - A Survey

• 2.1 Introduction
• 2.2 Gifts
• 2.3 Naming
• 2.4 Research Funding and Agreements
• 2.5 Corporate Sponsorship
• 2.6 Contracts
• 2.7 Investments
• 2.8 Conclusions

Part Three: Recommendations and Issues Requiring Exploration and Policy Development

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Part One: The Issues

1.1 Introduction

The recent decrease in public funding for universities has created an environment in which institutions must actively pursue alternative sources of revenue. This net decrease in federal transfers to provinces coupled with decreased provincial support for Ontario universities has called the "public" nature of our universities into question. Universities are scrambling to obtain support from the private sector to make up for the lost revenue from government grants. The AMS hopes that as universities become more successful at garnering private support, they do not undermine their case for increased public funding. We hope the "Public" Ontario University does not become a thing of the past.

Ontario universities are dependent on a continuous flow of funds from four distinct sources: government, tuition and ancillary fees paid by students, private donations, and corporate support. The proportion of funding obtained from each continues to shift as students, private donors, and the corporate sector take on much of the funding that used to be provided by the government. This paper will focus on the issues relating to the increased involvement of the corporate sector in the funding of universities.

1.2 Corporate Involvement at Universities

Many members of university communities are concerned about the increased commercialization of their institutions. As universities become more dependent on private funds, they become increasingly subject to influence by private interests. It is possible that the academic integrity of institutions will suffer and they will waver from the path to achieving their mission. On the other hand, since a large increase in public support of Ontario universities is unlikely in the near future, it is probable that growth in corporate support will become necessary for universities to achieve their goals. However, universities have a critical responsibility to ensure that this increased corporate involvement does not erode their fundamental character as a place of academic freedom and intellectual development.

The government has not only passively encouraged universities to seek corporate support by decreasing grants but has actively encouraged, if not forced, this support through specific joint-funding initiatives. Universities have been pressured to develop corporate partners through both federal and provincial matching programs. Increasing proportions of resources are tied to the university's ability to obtain corporate partners. The Canada Foundation for Innovation has recently received $900 million that can only be accessed by universities that can provide matching funds to cover 60% of their project. This type of program has sparked concerns about the power that private corporations are given over the ability of institutions to obtain public funding. On the provincial level, the Ontario Student Opportunity Trust Fund initiative and the Access to Opportunities Program , both provided large amounts of money to universities contingent on matching funds from the private sector.

Universities, including Queen's, are also pursuing their own independent, unique relationships with corporations. The Queen's Principles and Priorities document (1996) states in Recommendation 14:

That units be encouraged to explore non-traditional funding opportunities in support of core activities and that the Advancement Office continue to link with academic units in developing Faculty and University-wide priorities for fundraising.

In the current funding climate, the AMS believes that it is appropriate for Queen's to pursue these sources of funding in order to ensure the highest quality of education for students in conjunction with the lowest fees possible.

1.3 The Absence of Guidelines and the Slippery Slope

The widespread concerns about corporate involvement in universities often stem from the fact that many Canadian universities lack broadly-recognized and accepted institutional principles, policies, and guidelines to regulate and direct corporate involvement. In some cases, the results of this lack of central direction have been quite detrimental to universities. An excellent example of the negative ramifications of the laissez- faire mentality occurred at the University of Toronto during its recent fundraising campaign, The Campaign of Campaigns, which raised an unprecedented $400 million from 1995 to 1999. At the end of this fundraising initiative, some U of T Faculty members became increasingly concerned that the administration had compromised the academic freedoms of the University by infringing upon "[the] right to raise deeply disturbing questions and provocative challenges to the cherished beliefs of society.¹ This conclusion was reached when reports surfaced about an agreement between The Energius Incorporation and U of T's Faculty of Applied Science. Apparently, the incorporation donated money to purchase an endowed chair and professorship, and as a result, was given the power to choose who would be hired for these positions and what type of research they would undertake. In the end, the company was able to inappropriately out-source a large amount of work to U of T professors. This arrangement violates the fundamental principles on which universities pride their operations.

Another example of the ramifications of the lack of guiding policy with respect to corporations can be found at the University of Victoria. The University recently rejected a $2,000 scholarship from Shell Canada after a student senator raised objections about accepting donations from a company that engaged in questionable human rights practices. The Senate decided to reject the scholarship and ensure that some form of representative body would be established in the near future to ensure that a corporation's ethical practices are screened before the decision to receive monies is considered. David Cohen, Dean of Law and Vice-Chair of the Senate, agreed that "the University needed to establish principles and processes for making decisions on private sector funding."² This situation was embarrassing for the University and may deter other corporations from attempting to establish scholarships and bursaries - an unintended outcome of ill-preparedness.

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1.4 The Purpose of this Paper

The Government Issues Committee (GIC) of the Alma Mater Society has developed this paper, over the course of this year, out of a concern for ensuring that ³ÉÈË´óƬ is not forced into a compromising situation with respect to the involvement of corporations in the University. GIC is a standing committee of the Assembly of the Alma Mater Society. The Assembly is the highest legislative body of the AMS and the representative body for 12, 000 undergraduate students at Queen's.

The purpose of this paper is twofold: (1) to provide the thoughts, opinions, and recommendations of the AMS concerning corporate involvement at ³ÉÈË´óƬ, and (2) to begin discourse at the student, administrative, faculty and governance levels in order to develop a widely-recognized and accepted framework of highly regarded principles, policy and procedures to guide Queen's involvement with corporations.

The Queen's Landscape - A Survey

2.1 Introduction

Queen's has a variety of policies concerning corporate involvement in different areas of the University. The University has built relationships with outside corporations through research agreements, receipt of various gifts, establishment of endowed chairs, professorships and lectureships, exclusivity contracts and sponsorship. The goal of this section of the paper is to present and explore the relevant Queen's policy and practice relating to all areas of corporate involvement.

The following Queen's policy documents are relevant to this paper and may be referred to throughout this section:

• Gift Acceptance Policy, Nov. 1997 (G.A.P.)
• Final Naming Policy, Oct. 1996 (F.N.P.)
• Policy on the Establishment and Designation of Endowed Chairs, Professorships, and Lectureships, May 1995 (P.E.P.L.)
• Policy on Administration of Research Funds, Feb. 1995 (P.A.R.F.)
• Guidelines Concerning Publication of Research Results, Nov. 1972 (G.C.P.R.R.)
• Queen's Research Agreement
• Report of the Senate Ad Hoc Committee on Intellectual Property, 1991
• Mission Statement of ³ÉÈË´óƬ, Jan. 1996
• Report on Principles and Priorities, Jan. 1996 (R.P.P.)

These documents are all available on the Queen's website.

2.2 Gifts

Queen's gift acceptance policy states that,

[The]University welcomes gifts which enable it to fulfil its mission of teaching, research, and community service. Through the promotion of voluntarism and philanthropy, the Office of Advancement provides central friend-and-fund-raising support to assist the University. Federal and provincial governments encourage voluntary gift support of charitable organizations such as ³ÉÈË´óƬ, and allow substantial tax relief to donors. "(G.A.P.).

Increased resources have been devoted to seeking gifts for the University in recent years and are at a historical maximum with the current Campaign for Queen's.

The material from the "Gift Eligibility" and "Gift Limitations" sections of the Policy for Gift Acceptance is as follows:

The ultimate decision to accept or reject a particular gift rests with the Board of Trustees. The Director of Development consults with the Principal and Vice-Principals on particularly difficult cases when formulating a recommendation about the gift.

The policy on Gift Acceptance states that:

The Queen's Fund Council of the Board of Trustees used to review the gift arrangements obtained by the Department of Development on a regular basis. The Campaign Cabinet is currently reviewing arrangements that are a part of the Campaign for Queen's and is reporting directly to the Board of Trustees.

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2.3 Naming

Queen's Naming Policy makes no direct reference to corporations. The "background" to the policy states that:

The naming of university activities or property is a well-established custom at ³ÉÈË´óƬ. From named Chairs and awards to named buildings and gardens, ³ÉÈË´óƬ welcomes the opportunity to honour those who have rendered outstanding service to the University, the Province of Ontario, or to Canada. It also welcomes the opportunity to honour individuals whose generous benefactions make possible the construction or restoration of buildings, the establishment of endowed chairs, the development of programs.

The "Scope" section of the policy states that:

The Board of Trustees has the ultimate authority to accept or decline a naming proposal. Naming options include the things listed in the "Scope" above and are generally to be held in perpetuity although there is the option of offering named recognition for a limited amount of time.

The guidelines for gifts that may involve naming include:

• It is the responsibility of individuals negotiating on behalf of the University to consult with the Department of Development when gifts involve a proposal to name.
• It is the responsibility of individuals negotiating on behalf of the University to advise potential benefactors that the acceptance of any gift contribution which involves a proposal to name is conditional upon final approval of the naming by the Board of Trustees.

Facilities

In order to name a facility or activity the donor is expected to provide all, or a major part, of the funding. The "Guidelines for Naming Buildings and other Facilities" makes no reference to naming by corporations. Queen's does not currently have any facilities named for corporations.

Endowed Chairs, Professorships and Lectureships

Queen's has, however, accepted corporate names for endowed Chairs, Professorships and Lectureships. Corporations involved include the Bank of Montreal and Alliance-Atlantis Film Productions. Queen's Policy on the Establishment and Designation of Endowed Chairs, Professorships and Lectureships (May 1995),

The University requires that adequate funding be in place prior to the commencement of the Chair, Professorship or Lectureship to ensure it is sustainable. The Senate Budget Review Committee and the Senate Committee on Academic Development review all proposals and pass recommendations on to the Senate. In order for a naming to take place, the funding agency is generally expected to have contributed at least 51% of the value of the endowment. The funding agency is involved in establishing the terms for the use of funds but is generally not expected to have further involvement after the original terms are approved. The policy states:

The benefactor(s) or funding agency may participate with the Vice-Principals, Deans, or Directors in establishing the terms of reference for the Chair, Professorship or Lectureship. These terms will include guidelines for the use of funds, area of appointment, and, in the case of fixed term appointments, length of appointment.

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2.4 Research Funding and Agreements

Queen's has well-developed guidelines for its research-based involvement with corporations and has been participating in these types of relationships for a long time. The Queen's Research Agreement, or a substitute with the same components, is used whenever the University is entering such an agreement. The Policy on Administration of Research Funds (Feb. '95) identifies the various types of funding and the general policies governing the conduct of researchers and the University with respect to this external funding. According to the policy:

• all funds received in support of research which utilizes University facilities are administered on behalf of Researchers by the University
• research gifts are funds with no attached expectation of return or direct benefit to the donor
• research contracts/agreements "are agreements negotiated with the University to provide research on a project defined by the funder in which all direct and indirect costs are paid by the sponsor. Research contracts normally include a work plan, deliverables, conditions related to publication of results, clauses related to ownership of intellectual property and its commercialization. All research contracts require the approval of the Head of the Department/Academic Unit and must be signed by the Director of Research Services or designate prior to implementation." (P.A.R.F.)
• the Director of Research Services and the Head of the Department/Academic Unit to which the researcher belongs oversee all research contracts
• the minimum indirect cost rate on research Contracts/Agreements with the private sector is 40% of the total direct cost of performing the research (the recovery rate for indirect costs is higher for the private sector than other sectors)

Publication of Results

Queen's is firm in its commitment to its role as a centre for scholarly research, and as such, the need to maintain the right to publish research information. The Guidelines Concerning Publication of Research Results (Nov. 1972), prepared by the Presidents of Universities of Ontario, states:

The classification of research findings at the sole discretion of the sponsoring agency does irreparable violence to the most fundamental objectives of academic research. Classified research is not subject to the open judgment of scholarly and scientific peers and accordingly fails one of the most crucial tests of a true accretion to knowledge - universal accessibility. While we are sensitive to the claim that classified research findings may on occasion be in the public interest, we cannot reconcile this claim with the greater public interest that universities serve as our society's principal repository of open inquiry. Universities exist to maintain a free flow of ideas and observations and to examine critically all aspects of man and the universe. They provide through research and criticism the catalysts of change, and they are by tradition and mandate the mainstream of renewal in society. It is a simple fact that these functions are undermined when academics within the jurisdiction of the university engage in work whose findings do not become universally accessible. To the limited extent that academics feel called upon to do such work, they should seek leave of absence from the university and should conduct their work entirely on the premises of the sponsoring agency.

Article 13 of the Queen's Research Agreement states:

The parties agree that it is part of Queen's function to disseminate information and to make it available for the purpose of scholarship. It is further recognized that the publication of certain technical information may compromise its commercial value.

Queen's agrees to advise the company of proposed material for public disclosure and, if there is an objection from the company, to try to come to an agreement on an acceptable version for release. If an agreement cannot be researched, Queen's is free to publish the material after a six month waiting period. Queen's is sensitive to the desire of some companies to have a period of confidentiality in order to protect their "first-comer" position in the market. In general, the company and the University will both be bound be certain reasonable confidentiality requirements.

General Guidelines and Accountability

The Office of Research Services applies general 'common sensical' guidelines in deciding about the appropriateness of a research relationship for Queen's. The Office is guided by the principle that the University should only accept research relationships about which it can be proud and open. Research Services, Department Heads and Researchers all work to ensure the University does not participate in unethical research. Research Services acts as a central clearing office for all research funding and works to monitor the various university branches and the many individual relationships that develop between researchers and corporations. PARTEQ Innovations is a Queen's not-for-profit corporation that acts as the technology transfer agent for ³ÉÈË´óƬ and has the exclusive rights to all intellectual property owned by the University. PARTEQ's mission is "to stimulate and facilitate the commercialization of intellectual property generated at Queen's and to enhance and foster linkages between the university research community and industry". PARTEQ is responsible of the development of the research completed at Queen's, and often, the transfer of particular projects into the corporate sector.

Information about research agreements is not publicized but is available upon request. The names of corporations that are funding research at Queen's are included in the Annual Donors Report but the amount of their monetary contribution is not mentioned.

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2.5 Corporate Sponsorship

There are many University units and student groups that receive sponsorship from corporations. The University has a policy related to alcohol sponsorship but little else. Groups currently receive monetary sponsorship or support-in-kind for events, programs, specific initiatives (e.g. Solar Car). The University has also recently entered a cold-beverage exclusivity contract with Coca-Cola. The contract brings in a rights fee as well as commissions on sales. The University is free to spend the sponsorship money as it chooses. The only involvement that Coca-Cola must have, according to the agreement, is with the chunk of money for marketing products on campus. Coca-Cola will have a representative on the Marketing Committee that will be comprised primarily of Queen's students and employees. The contract with Coca-Cola spans a ten-year period.

The Cold Beverage Exclusivity Committee was struck to guide the process and is comprised of the Director of Food and Beverage Services, the Dean of Student Affairs, the AMS President, the SGPS President and the Partnership Development Officer. The committee determined its own terms of reference. It also acted as the Working Group on the Allocation of Funds from the contract and made a recommendation, consistent with the AMS proposal, that was accepted by the VP (Academic).

2.6 Contracts

The University has service-provision contracts with external corporations (e.g. Sodexho-Marriott). Contracts vary in duration and allow different degrees of flexibility and independence on the part of the corporation. The University does not have overarching guidelines for entering into these sorts of contracts although high quality operations and service are generally expected of the corporation. Individual units and the Office of the VP (Operations and Finance) are generally responsible for ensuring the contracts are in the best interests of the University.

2.7 Investments

The University has a range of investments in external corporations. The Investment Committee of the Board of Trustees is responsible for making recommendations to Board about the management of the investments. In March 2000 the committee reported to the Board,

... the Investment Committee reviewed the history (over the period 1977-1987) of Queen's policy/practice with respect to the ethical/socially responsible investing policies and addressed the issue of Talisman Energy in particular.

Although there is some body of opinion (not universally held) that establishment of non-financial investment criteria is not consistent with the fiduciary responsibility of the Investment Committee and Board members, such matters were discussed over a ten-year period at the Board and the Committee on Social Responsibility (CSR) established by the Board. Since the resolution of the South African apartheid policy, the CSR has been discontinued

The Investment Committee concluded on January 25, 2000 that shares of Talisman were an inappropriate holding given current conditions in Sudan.

The Investment Committee decided the University should sell its shares in Talisman for both ethical and financial reasons. The committee initiated a discussion with the Board about possible approaches to setting up investment screens based on ethical criteria and the possible pros and cons of such action. The Board of Trustees currently has no guidelines for screening investments.

2.8 Conclusions

Queen's has principles, policies and guidelines for some specific types of corporate involvement in the University while they are lacking for other types. There is no central policy that can be drawn upon by all areas of the University to guide involvement with corporations. Where specific policies or established practices do exist, there is general a lack of awareness about these policies and practices.

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Part Three: Recommendations and Issues Requiring Exploration and Policy Development

After considering the current landscape at Queen's and the broad range of issues regarding corporate involvement in Universities, the Government Issues Committee of the Alma Mater Society has proposed six specific recommendations for ³ÉÈË´óƬ and identified seven additional issues for further discussion.

Recommendations

1. ³ÉÈË´óƬ should develop overarching principles, policies and procedures to guide all aspects of corporate involvement in the University. These principles, policies and procedures should be well-publicized to all members of the Queen's Community.

Accountability

2. The University should strike an ad hoc committee comprised of representatives from various University constituencies to develop the above-mentioned principles, policies and procedures and to recommend a structure for a permanent body to maintain and evaluate them. The membership of the committee should include representation from: the Board of Trustees, Senate, QUFA, QUSA, AMS, SGPS, Office of the University Advisor on Equity, Office of the VP (Operations and Finance) and the University Secretariat. The VP (Academic) should Chair the committee.

3. Information about research agreements with corporations and donations from the private sector should be made easily available to members of the Queen's community.

4. Large corporate sponsorship deals, including exclusivity contracts, should follow as open a negotiation process as possible and should be open to scrutiny by all members of the Queen's community. Representatives from relevant stakeholder groups, including students, should be part of a committee that guides the development of the arrangement with the corporation.

Ethics

5. The University should develop ethical criteria that must be met by corporations with whom the University is to be involved (including donations, sponsorship, research arrangements, investments etc.)

6. All corporate involvement arrangements should be reviewed regularly to ensure that all parties have acted, and continue to act according to the established guidelines.

Critical Issues Requiring Exploration and Policy Development

Academic Freedom

7. Corporations should not be given the power to directly influence intellectual development of students and faculty.

8. Regular instructors for Queen's courses should be paid by the University and never by outside corporations. These individuals should not be people whose objective is to promote a particular product of industry.

Corporate Monies

9. The University should not become financially dependent on an agreement with a corporation.

10. The Office of Advancement should work with University Faculties and Units to obtain financial benefit for the University through involvement with corporations. The arrangements to bring in corporate monies should never interfere with the University's Mission.

11. The Office of Advancement should establish as one of its priorities the devotion of central resources to aiding areas of the University that have had difficulty obtaining outside financial support and have received proportionally less support than average.

Donor Recognition

12. The University should be particularly cautious if it considers proposals to explore the option of granting named recognition for buildings to corporations.

13. The recognition of donations should be done in a consistent manner and style throughout the University. This manner and style should compliment the character of the University.

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1.  T Cole, "Ivy-League Hustle," Report on Business Magazine. June 1998, p. 37.

2.  "University Affairs," Association of Universities and Colleges of Canada, Feb. 1999.