In today’s fast-paced academic environment, conflicts of interest are not just inevitable, they are a sign of a thriving and innovative ecosystem. As University staff, including researchers, engage in various internal and external activities the need for increased knowledge and effective management of conflicts of interest has become a focal point for forward-thinking institutions such as Stellenbosch University (SU) where patenting and commercial activity increases annually. 

At a recent workshop held by the Innovus Technology Transfer Office at SU in partnership with Dommisse Attorneys, Anita Nel, Chief Director of Innovation and Commercialisation, aptly points out that conflicts of interest are inevitable. “It is going to happen, it is in the nature of what we do but it’s not something to be feared,” Nel observed. Conflicts of interest are a byproduct of the intersection between research and commercial ventures. The focus should be on effective management rather than avoidance. 

While conflicts of interest are a natural occurrence, they must be recognised and disclosed to prevent biased decision-making. The Higher Education Act, requires universities to have a process for managing conflicts of interest, this includes annual disclosures and obtaining relevant approvals where conflicts may arise. “Engagement from Human Resources (HR) is not a witch hunt, it’s about safeguarding all parties, and it certainly does not imply wrongdoing,” states Steven Adams, Deputy Director of SU Employee Relations. This perspective emphasises that the process of managing potential conflicts is designed to protect the integrity of research and uphold ethical standards, not to assign blame. 

Conflicts can arise when university staff engage in various activities such as research, teaching, consultancy and involvement with spin-out companies or any commercial activity internally and externally. While transparency is key, it is equally important to take preventive measures such as recusal from decision-making, to mitigate the impact of potential conflicts, advises Naseemah Sonday, Deputy Director of SU Research Contracts & Compliance. 

Decision-making, especially where researchers are appointed as directors or shareholders in a spin-out company, should be supported by transparency and the relevant documentation. If, for example, a company that is owned by a director is proposed as a supplier, that director must disclose their financial interest and may need to recuse themselves from voting on the contract to avoid a conflict. This practice helps to maintain fairness and integrity in decision-making processes. In events like these, “proper documentation of board resolutions is crucial for future reference and legal compliance,” says Tim Kelly, Senior Associate at Dommisse Attorneys.  

Directors have rigid financial duties, including ensuring the accuracy of financial statements and avoiding reckless trading. Being in breach of these duties, by engaging in fraudulent activities or making misleading statements, can lead to personal liability including being barred from operating as a director. These responsibilities are crucial for directors to know for their own protection and that of the institution. As stated by Ya-fan Wong of Dommisse Attorneys, “ignorance cannot be used as a defense.” Even if not a financial expert, directors should understand the basics and not sign off on false or misleading reports. 

The proactive management of conflicts of interest will allow staff and researchers to uphold the integrity of their work whilst positively contributing to the academic and commercial sectors.

For more information about what our spin-out companies do, visit Innovus: https://innovus.co.za/

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