Skip Navigation
A Culture of Care >> Read Smith’s plans for the fall 2021 semester.

Conflict of Interest Policy

Your Duty to Smith College

Smith College is a charitable organization under the laws of the Commonwealth of Massachusetts. Under Massachusetts law, you, as a member of the Board of Trustees (the “Board”) of Smith, are subject to the duty of care and the duty of loyalty. The duty of care means that you must act with such care as an ordinarily prudent person would use in the performance of your function. The duty of loyalty means that you must act in good faith and in a manner that you believe is in the best interests of Smith.

In addition, as fiduciaries of Smith, the members of the Board, must avoid conflicts of interest between personal interests and the interests of Smith. Generally, a conflict of interest exists when a person is in a position both to influence a decision and to benefit from that decision.

The members of the Board have a wide range of professional and personal associations, and may have interests in other entities. In order to assure Smith’s many constituents, including donors, governments, faculty, students and staff, of the integrity of Smith and of its Board, you should avoid situations in which such associations or interests pose an actual, potential or apparent conflict of interest or impair Smith’s reputation.

The Board has adopted this Conflict of Interest Policy (the “Policy”) to assist you, as a Trustee, and the other persons subject to this Policy. The Board bears ultimate responsibility for the terms and administration of the Policy, but may delegate certain actions and responsibilities to a committee of the Board, who may be advised by the Secretary of the Board or other designated personnel. 

Other Persons Subject to This Policy

This Policy and its disclosure obligations shall also apply to (a) all of the members of the Investment Committee of the Board, including its non-Trustee members, (b), any other non-Trustee member of any other Board committee and any person appointed as a Special Representative to the Board, (c) the Officers of the College, and (d) such other persons as the Board shall determine may be necessary or appropriate for the benefit of Smith. 

References in this Policy to “you” or a “Trustee” shall include all other persons specified above, such as non-Trustee members of the Investment Committee and Officers of the College, who are subject to this Policy.

The Basic Principle: Avoid Conflicts of Interest

You should avoid any actions or situations that might result in or create the appearance of using your association with Smith for private gain, providing unwarranted preferential treatment for any outside individual or organization, losing your independence or impartiality, or adversely affecting Smith’s reputation or confidence in its integrity. 

Guidelines for Determining Conflicts of Interest

I. Presumed Conflicts of Interest

For purposes of this Policy, a conflict of interest is presumed to arise when the College has or is considering a (i) transaction or other business relationship with a Trustee or a Trustee’s family member (as defined below) or (ii) with an outside entity in which the Trustee or a family member has a “material financial interest”. 

A. What is a “Material Financial Interest”?

A financial interest is presumed to be a “material financial interest” if it entails:

  • an ownership or investment position (for example, stock options, a partnership interest or other ownership interest valued at more than $25,000, except equity ownership in a publicly traded company amounting to less than a 5% ownership interest in such public company.
  • Non-dividend compensation, partnership income, salary, consulting fees, board fees, etc., of more than $25,000 in any 12-month period during the past three years, or the expectation of such compensation in the future.1
  • Real property, personal property, intellectual property or other property valued at $25,000 or more.
  • A position of real or apparent authority in a company or other outside entity, such as acting as a director, officer, trustee or partner.
B. Parallel Investments in Non-Public Entities; Examples of Potential Conflicts

A conflict of interest may also arise when a Trustee, a family member or an entity in which such person has a material financial interest, has or is considering an investment in an entity, such as a fund or a partnership, that is not publicly traded and in which Smith has or is considering an investment. Such a “parallel investment” could be seen to create an appearance that the Trustee is benefiting from Smith’s investment. 

At present, Smith has delegated to Investure investment discretion with respect to selecting investments for Smith’s endowment. Investure primarily invests with external investment managers across all asset classes, utilizing pooled investment vehicles that are typically not publicly traded, on behalf of its clients. It also makes certain direct investments. Both of these are considered investments by Smith.

The basic rule is that a Trustee or a family member should not be seen to personally benefit from any investment made by Investure on behalf of Smith. For example, if a Trustee is involved in making decisions for an entity from which the Trustee does not derive any personal benefit, and that entity also invests in an investment held by Investure, this would not in and of itself cause a conflict of interest.

While it is not possible to identify all potential conflicts, examples of potential conflicts that warrant disclosure could include a suggestion or recommendation by a member of the Investment Committee that Investure invest in an investment in which such committee member or a family member holds a material interest. Other examples related to knowledge of Investure’s strategy could include a parallel investment in a non-public pooled fund or a “piggy backing” investment in a direct investment when made for the benefit of a Trustee, or a family member, or for an entity from which the Trustee could earn a fee or benefit from capital appreciation.

Promptly upon becoming aware of any such potential conflict, the Trustee must promptly disclose to the Chair of the Board and the Secretary of the Board, and if the Trustee or non-Trustee is a member of the Investment Committee, promptly disclose to the Chair of that Committee, any “material financial interest” in a non-publicly traded entity in which the Trustee knows Smith is considering an investment or with which Smith is a considering a transaction. Ordinarily, the Trustee should not participate in any decision by the Board or of any of its committees, including the Investment Committee, regarding such investment or transaction.

C. When is a Trustee presumed not to have a “material financial interest”?

A Trustee is presumed not to have a material financial interest in a publicly traded entity that invests in other publicly traded entities, such as through a mutual fund, as long as the Trustee does not control or have investment discretion with respect to the investment decisions.

D. Who is a “Family Member”?

A Trustee’s “family member” is (a) a spouse, dependent child, or domestic partner, (b) any individual who lives in the same household as the Trustee and (c) any person to whom the Trustee provides primary financial support and over whose accounts the Trustee exercises control or has investment discretion (or provides ongoing investment advice). 

For the avoidance of doubt, “family member” accounts covered include (i) securities accounts, (ii) any trust or other arrangement for the benefit of the Trustee or other “family members”, (iii) any partnership, corporation or other entity owned and operated as an investment vehicle for the benefit of the Trustee or other “family members”, (iv) and any other accounts for the benefit of the Trustee or other ”family members” and over which the Trustee has investment discretion or provides investment advice. 

II. Disclosure of Material Financial Interests

A Trustee who has a known “material financial interest” in a pending transaction or proposed transaction or other business relationship of the College must promptly disclose to the Chair of the Board and the Secretary of the Board the existence of the interest and any other material information that the Trustee has regarding this interest or relationship.

In addition, each Trustee must annually sign and submit to the Secretary of the Board a statement disclosing all “material financial interests” of the Trustee or a family member, that are known or reasonably should have been known to the Trustee, in any outside entity with which the Trustee knows the College has or is considering a transaction, or a business relationship, or affirming that the Trustee knows of no such transaction or relationship.

For the avoidance of doubt, this disclosure obligation and the requirement to sign and submit an annual disclosure statement applies to all other persons subject to this Policy, including non-Trustee members of the Investment Committee and Officers of the College.

III. Determination if a Conflict of Interest Exists

The Secretary of the Board shall review the annual statements of disclosure and determine if a “material financial interest” has been disclosed. If a “material financial interest” has been disclosed, the Secretary shall promptly share with the Executive Committee such disclosure forms and any additional information about the current or proposed transaction and the business relationship that may give rise to a conflict of interest which the Executive Committee may deem informative.

If the conflict of interest involves the Chair of the Board, any other member of the Executive Committee, or a non-Trustee member of the Investment Committee, the Secretary shall share the disclosure forms and any additional information with the other disinterested members of the Executive Committee. In addition, the Secretary shall disclose the information to the Executive Vice President for Finance and Administration on a need to know basis, as determined by the Executive Committee.

The Executive Committee shall review the information provided in the disclosure forms and determine whether or not there is a conflict of interest. If it is determined that there is a conflict of interest, the Chair of the Board shall so advise the affected Trustee, who shall have the opportunity to discuss the matter with the Executive Committee. The matter may be referred to the entire Board for a decision.

IV. Board Consideration of Matters Involving Conflicts of Interest

If a Trustee becomes aware of a potential conflict of interest during or just before a meeting of the Board, the interested Trustee shall so inform the Board and shall be recused while the Board discusses the matter. The interested Trustee may be asked to make a presentation to the Board to assist the Board in its deliberations. If it is determined that no conflict of interest exists, the interested Trustee may rejoin the meeting and participate in discussions and a vote on the proposed transaction. If it is determined that a conflict of interest exists, the interested Trustee shall be required to leave the meeting prior to any discussion of the proposed transaction or arrangement and shall not vote on the matter.

The Board shall approve the transaction or arrangement only upon a finding by a majority vote of the disinterested Trustees, that the transaction or arrangement is in the best interest of, and is fair and reasonable to, Smith.

V. Minutes

If the Board has a discussion or meeting at which a Trustee’s financial interest in a matter is disclosed, a determination regarding a conflict of interest is made, or a transaction or arrangement in which a Trustee has a conflict of interest is considered, the Board’s consideration of these matters, including any reasons for approval, shall be reflected in the minutes of the meeting.


Trustees shall not encourage or accept gifts, favors, gratuities and the like for themselves or a family member from any individual or entity that to the Trustee’s knowledge has, or seeks to have, a business relationship with Smith.

Appropriation of Opportunities

If a Trustee becomes aware of a business, investment, or other potentially valuable opportunity that rightfully belongs to Smith, the Trustee shall bring the opportunity to the attention of the Board.

Confidential Information

Trustees may not use any confidential information acquired as a result of service on the Board or any other service performed for Smith, or provide such confidential information to a third party, without the consent of the Board. Examples of misuse of confidential information include disclosure of information to engage, invest, or otherwise participate in any project, venture, or any business transaction other than through Smith.

Actions Not Void or Voidable

No transaction or action undertaken by Smith, the Board or any Committee of the Board, shall be void or voidable, or may be challenged by any outside party or person, by reason of having been undertaken or approved in violation of this Policy or its principles.

Revised and approved by the Smith College Board of Trustees, October 21, 2017


  1. Professional services relationships between Smith and a Trustee, or his or her firm, present special conflict of interest concerns. In assessing whether the service presents a conflict, and whether or not the relationship should go forward, the Board should consider such factors as whether the relationship between Smith and the firm is longstanding, the cost, quality of services and the reputation of the firm in comparison to other alternatives, the conflicted role of the Trustee in the relationship, and financial, and other benefits to Smith, the firm, and the Trustee.