Selling to External Customers: Institutional Risks

Institutional Risks - Risks associated with external sales that are University wide. Processes, relationships and outcomes reflecting the policy should seek to manage these risks to meet the mutual and balanced needs of the University, the collegiate unit conducting the activity and the external customer with whom the University is conducting business.
  1. Activity consistency with University Mission.

  2. Business Risks.
    a.
    Economic viability of activity.
    b.
    Conducting commercial activities in academic units. Managing these activities with adequate knowledge of impact on existing organization assets and activities.
    c.
    Understanding relationship of market influences on the activities.
    d.
    Distribution of product or services into commercial channels.
    e.
    External sales financial planning, reporting, controls and accountability standards that are different from typical academic unit business transactions.
    f.
    Venture capital availability and use.
    g.
    Business development and performance issues, i.e. role of Office of General Counsel, Office of Technology Commercialization, and other resource offices to support development of new external sales in units.
    h.
    Unique nature of activities demands different risk management than research, sponsored project, or gift activities, to achieve business results.
    i.
    Generation of more than $50,000.00 annually in revenue.
    j.
    Exclusive contract with a single vendor.
    k.
    Noncompete commitment.
    l.
    Pricing basis.
    m.
    Market knowledge about a product or services, planning for competition, estimation of market value about product or services.
    n.
    Market distribution management issues.

  3. Legal Risks.
    a.
    Legality of activity, in law and in University policy.
    b.
    Contract between parties.
    c.
    Commercial documents in use in lieu of contracts, when appropriate.
    d.
    Business relationship documented.
    e.
    Intellectual property asset protection and managing copyright, trademarks, patents, trade secrets and proprietary information, and publication rights.
    f.
    Support for leading edge activities, i.e. internet commerce.
    g.
    Use of the University name, logo and/or wordmark.
    h.
    Compliance with licenses between the University and resource providers that may restrict University actions.

  4. Tax.
    a.
    State and local.
    b.
    Federal, Unrelated Business Income Tax (UBIT) reporting to University Tax office.
    c.
    Impact of activity on preexisting conditions, i.e. bond limits.
    d.
    Institutional UBIT strategy.
    e.
    Tax planning topics in the business relationship.

  5. Insurance. (See also Risk Management and Insurance website)
    a.
    Liability issues for third parties on university premise; waiver issues on product sales.
    b.
    Activities of employees, University or non-university employees working on campus.
    c.
    Product or service warranties of performance.
    d.
    Release or consent forms.
    e.
    Intra and interstate insurance and liability coverage differences.

  6. Regulatory, oversight and ethics compliance.
    a.
    Agency rules and limits, i.e. use of federally funded equipment for external revenue generation.
    b.
    Human and Animal Subjects IRB and IACUC oversight and approval.
    c.
    Environmental Health and Safety oversight and compliance.
    d.
    Knowledge and incorporation of outside agency audit standards into business plans and operating procedures.
    e.
    Conflict of interest.
    f.
    Individual involved in proprietary interest in company that may be affected by sales.
    g.
    Relationship to individual consulting policy and activities.

  7. Political and public relations.
    a.
    Use or discrediting the University name or reputation.
    b.
    Internal. Having an internal plan that supports the outcomes.
    c.
    External. Unfair competition allegations.
    d.
    Timeliness of planning and implementation to achieve results.

  8. Administrative.
    a.
    Classification and management of activity consistent with University policies and processes.
    b.
    Approval of activities by department head and dean.
    c.
    Financial resources management in departments.
    d.
    Collegiate unit strategic planning of activities of research and external sales.
    e.
    Appropriate administrative support to manage activity in the department.
    f.
    Collaboration betweencollegiate and administrative areas to support accountability for emerging activities and relationships.
    g.
    Financial reporting system in department to account for and manage activities.
    h.
    Establishing processes in departments to demonstrate valid audit trails.

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