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Explanation:

The University owns stocks and other forms of equity in companies as part of its investment holdings and endowment portfolio. These businesses may sponsor research or conduct other activities at the University.

Examples of potential risk situation:
The University owns a significant amount of equity in a local company. The company asks to use University research facilities at a favorable overhead rate.

Process for Potential Conflict Identification and Management:

The University manages potential conflicts of interest related to investments by segregating the decision-making for investment transactions from the decision-making for University research, teaching and outreach activities. Under Regents policies, outside professional asset management firms independent of the University manage the University's endowment and investment portfolios and determine when to buy and sell stock and other holdings on behalf of the University. See the Board of Regents Policies:

• Investment Transactions
• Investment of Reserves
• Endowment Fund

This mechanism creates a sufficient firewall between the University's investment decisions and its research, teaching and outreach activities to minimize the risk of an institutional conflict of interest arising.

However, the risk of a potential conflict of interest increases where the University holds equity in companies that license intellectual property from the University or sponsor research at the University related to the licensed technology. These potential conflicts are handled through the Administrative Procedure: Managing Potential Institutional Conflicts of Interest: Licensing and Technology Transfer.