External income policy

People Experience and Culture External Income Policy

1. Introduction

1.1 The university recognises that it is often beneficial that staff members represent the university on various bodies and boards and carry out professional, academic, and civic responsibilities at other organisations, e.g., non-executive director roles in a personal capacity.

1.2 This policy helps the university to meet the requirements of the Committee of University Chairs (CUC) HE Senior Staff Remuneration Code (“the CUC Code”) which provides that institutions should publish their policy on income derived from external activity. The policy also supports the university in meeting its regulatory duties and conditions of registration as an HE provider, and in meeting the transparency and accountability principles set out in Section 2 of How We Work which applies to senior leaders.

1.3 This policy aims to guide those responsible for approving requests to undertake external activities in a personal capacity from those staff within scope of the policy. It also provides guidance on decisions on the retention of any payments or other benefits to be derived by the individual from such external activities.

1.4 This policy does not form part of any employee’s contract of employment and the university may amend it at any time.

2. Scope

2.1 The policy applies to all leadership and professorial staff.

2.2 While staff below leadership level are not within scope of this policy, if they are undertaking work or have paid/unpaid positions outside of their university employment, they should refer to another policy as appropriate for guidance. Please see relevant sections of How We Work (“HWW”) e.g., the sections on potential conflict of interest, working elsewhere, use of university property and resources, etc.; or the Private Consultancy Policy. Academic employees should also be aware of provisions in their contract of employment around exclusivity of service.

2.3 This policy does not apply to income generated for the university in an official capacity as part of the employee’s normal position.

3. Policy Statement

3.1 The university encourages and seeks to enable external work that aligns with the university’s strategic direction and its civic role and supports individual personal and professional development.

3.2 The university wishes to encourage a culture of openness and transparency in relation to external activities (whether paid or unpaid) and does not seek to restrict legitimate activities, or personal income creation, that does not otherwise conflict with the university’s interests or is or would be perceived as creating a conflict of interest for the individual employee. In particular, the university wishes to support activities that enhance the academic standing and external reputation of our staff or supports relevant institutional success measures or other performance metrics (e.g., HECBI; KEF etc.).

4. Categories of external activity

4.1 This policy broadly categorises different types of activity by the degree of connection to the university or the individual’s professional role. See Appendix A for the categories and illustrative examples of the type of activity each category might comprise.

5. Approval process

5.1 Subject to the terms of their contract of employment, leadership and professorial employees must seek prior approval in accordance with this policy if they propose to undertake external activity, whether paid or unpaid. Where the external activity is remunerated, then approval for retention of any income or benefits generated by the activity must be approved at the time the request is made.

5.2 Approval should be sought as follows:

5.3 The form at Appendix B can be used to request approval to undertake the activity and, where applicable, to retain any income derived from that activity.

5.4 Employees are under an ongoing obligation to notify the relevant approver (see 5.2) of any change in circumstances or new information arising after initial approval is given, so that the initial approval can be reviewed in the context of any new information. This is particularly important where approval was given in relation to an activity that is ongoing or recurrent, as opposed to a ‘one off’. In addition, where the activity is ongoing or recurrent, the employee is required to re-seek approval annually to ensure it remains appropriate in view of any changing circumstances for the individual or the university.

Considering and approving requests

5.5 When considering requests to undertake external activity, the following considerations may be relevant before approval can be given:

• Does it create a direct mutual benefit for the university and, where there is an opportunity for income generation, should it be undertaken via the university e.g., via the Private Consultancy Policy or the Commercialisation Policy (The Commercialisation Policy is only relevant to the extent that the external activity is a potential commercial opportunity for the university (linked to the individual’s role for the university) and/or where the activity may be generating IP that may belong to the university. Key to this is whether the external activity is in furtherance of the university’s charitable aims e.g. learning, teaching and research).
• Does it create an actual or perceived conflict of interest for the individual or the university and, if so, can the conflict of interest be effectively managed?
• Does it divide the employee’s time to the extent that it may adversely affect the performance of their duties for the university, or have any other adverse effect e.g., health and wellbeing?
• Are there any performance concerns that would be exacerbated if the employee is undertaking external work/activity; conversely, does the external work help address any identified development needs?
• Does the external work/activity create any potential liabilities for the university e.g., where the work is closely connected to the university or where the individual is deemed to be acting on behalf of the university?
• Does the external activity involve the use of the university’s resources including physical/digital resources, facilities, property, time, or people e.g., other staff or students (including PGR students)?
• Does the external activity use and/or potentially compromise any of the university’s confidential information, staff/student personal data, intellectual property etc.?
• Does the work generate any intellectual property and who is the owner? (See the Intellectual Property for Employees Policy).
• Would the external work/activity, due to its nature, cause any reputational damage to the university?

6. Income derived from external activity

6.1 Any monies to be received from the external activity should be disclosed as part of the approval process so that this can be considered at the same time.

6.2 In cases where the external activity has been approved but there is no link to the university or the employee’s role, or it is sufficiently disconnected from normal role expectations (e.g., Category C), any income derived is a private matter for the individual although there is an ongoing duty to notify where circumstances change e.g., the arrangement changes from an unpaid to a paid arrangement, or the time commitment increases.

6.3 For Categories A and B, the following applies:

6.3.1 The individual may retain income without further approval where, in aggregate (across all such external activities undertaken), it amounts to no more than £1,000 (Excluding expenses (although these should still be declared) gross in a rolling 12-month period. In calculating the income, the cash value of any non-cash benefit received should be included.

6.3.2 If the activity is likely to generate more than £1,000 gross (in aggregate) in the rolling 12-month period, approval will be required for the individual to retain that income and the considerations below should help inform that decision:

• The employee’s role and seniority and the normal expectations of their paid position for the university.
• When the work is undertaken e.g. is it being undertaken during hours the individual would normally be expected to be working for the university and therefore already in receipt of pay?
• Is the activity using the university’s resources (including people resources) and/or equipment?
• Who directly benefits from the activity or from the expected outputs from the activity e.g., the university or the employee or another individual/organisation?
• Was the opportunity obtained because of their role with the university / connection to the university?

6.4 The more senior the employee (e.g., UEB), the less likely it is to be appropriate to retain significant additional income that has been generated through external activity obtained as a result of their university position, because at this level,

there is a greater need to ensure public confidence in how they are discharging their duties (including any fiduciary duty) to the university which may be compromised where there is opportunity to derive significant income from external work or appointments.

6.5 Other options may include an income-sharing arrangement with the university or, where appropriate, channelling the request via the Private Consultancy Policy.

6.6 Payment of expenses incurred in undertaking the activity or other benefits received should be declared and, where deemed reasonable, can be retained by the individual.

6.7 Where it has been approved that the employee may retain any income generated from the external activity, the employee is responsible for making the proper arrangements in terms of any tax or national insurance (NI) deductions.

6.8 Subject to 6.7, royalties from books, scholarly articles, etc. are excluded and can be retained by the individual as personal income.

6.9 Subject to 6.7, payment of fees for acting as an external examiner at another institution should be disclosed but can be retained by the individual without further approval.

6.10 Retrospective approval for retention of income will not normally be given.

7. Sanctions

7.1 Failure to comply with this policy may lead to the staff disciplinary procedure being invoked. This could result in disciplinary action up to and including dismissal.

8. Equality Analysis

8.1 Requests made under this policy will be monitored to ensure fairness and consistency in the application of the policy. Determinations made under the

policy will be reported to Governing Council as part of the annual report of Remuneration Committee in line with the Terms of Reference of Remuneration Committee.

Appendix A: Types of Activity Categories and Examples

Appendix B: Request / Approval Form

For further details or to access Appendix B, please email governance@derby.ac.uk.