Formation, Dissolution, and Oversight of Related Entities

I.  General Policy Statement

This policy governs the creation, oversight, and dissolution of subsidiaries, affiliates, advisory boards, academic centers, and other entities related to Syracuse University (collectively, “Related Entities”). In general, and as set forth in this policy, creation and dissolution of Related Entities requires approval from the Office of University Counsel, the Chief Financial Officer, the Chancellor, and in some cases the Board of Trustees. Oversight of the operations of each Related Entity is the responsibility of the school, college, or administrative unit having the primary connection to the mission or purpose of the Entity.

II.  Reason for Policy/Purpose

The purpose of the policy is to standardize requirements for creating and maintaining Related Entities, and to clarify the role and responsibilities of University personnel, alumni, and supporters of the University involved with such entities. The controls set forth in this policy are needed to ensure there is appropriate oversight of the University’s tangible and intangible assets, and that operations are conducted consistently with applicable laws, rules, regulations, and University policies.

III.  Policy

Activities that are consistent with the University’s mission and status as a charitable educational institution should be conducted internally through the University. Activities that are consistent with the mission of existing Related Entities should be conducted through those entities. New entities will only be approved pursuant to this policy when justified by compelling legal, financial, academic, or operational reasons.

  1. Creation and Dissolution of Related Entities

Related Entities can only be created or dissolved with the appropriate approvals. Approval authority for Related Entities depends on the type of entity at issue as follows:

  1. Legal Subsidiaries

Legal Subsidiaries are separate entities that are owned or controlled, in whole or in part, by the University (e.g., Drumlins, Inc; Orange Insurance Company, LLC). Legal Subsidiaries may only be created or dissolved with approval from the Chancellor, Senior Vice President and General Counsel, and the Senior Vice President and Chief Financial Officer, with the concurrence of the Executive Committee of the Board of Trustees.

  1. Separate Entities Deploying University Resources

Separate Entities Deploying University Resources are separate entities that receive funding from the University, or otherwise use University personnel, property, or assets (e.g., Community Folk Art Center, Inc.; Light Work Visual Studies, Inc.). Separate Entities wishing to use the University’s name must obtain approval from the Chancellor, Senior Vice President and General Counsel, and Senior Vice President and Chief Financial Officer. Each Separate Entity Deploying University Resources must enter into a Memorandum of Understanding (“MOU”) with the University, unless the University resources at issue are de minimis, or contributed on a one-time or donation basis.

  1. Volunteer Boards and Councils, including Advisory Boards

Volunteer Boards and Councils are committees comprised of University personnel and outside volunteers, such as alumni, that provide schools, colleges, and administrative units with philanthropic support and strategic management advice (e.g., College of Law Board of Advisors; Friends of Hendrick’s Chapel; Falk Board of Visitors). Member nominations to Volunteer Boards and Councils will be made by the applicable dean or unit leader. The Chancellor must approve the appointments.

Creation or dissolution of school, college, or other academic Volunteer Boards and Councils requires approval from the Chancellor, Vice Chancellor and Provost, and the dean for the school or college wishing to establish or dissolve such an entity. Creation or dissolution of non-academic, administrative Volunteer Boards and Councils requires approval from the Chancellor, the Senior Vice President and Chief Advancement Officer, and the unit leader for the unit wishing to establish or dissolve such an entity. Volunteer Boards and Councils may not form separate corporate entities, including, without limitation, limited liability companies, charitable 501(c)(3) organizations, or other corporations.

  1. Academic Centers or Institutes

Academic Centers and Institutes are formally-structured associations among faculty, staff, and students formed to further specific research, advocacy, or other academic endeavors (e.g., Burton Blatt Institute; Falcone Center for Entrepreneurship). Creation or dissolution of Academic Centers or Institutes requires approval from the Vice Chancellor and Provost and the dean for the school or college with which the entity is associated. Academic Centers or Institutes may not form separate corporate entities, including, without limitation, limited liability companies, charitable 501(c)(3) organizations, or other corporations.

  1. Associations and Clubs, including Alumni Affinity Groups and Clubs

Associations and Clubs are formally organized groups established to support fundraising and other charitable efforts of schools, colleges, or specific programs at the University (e.g., SU Law Alumni Association; Maxwell D.C. Alumni Club). Creation or dissolution of Associations and Clubs requires the approval of the Chancellor and the Senior Vice President and Chief Advancement Officer. Nothing in this policy is intended to prevent informal associations and gatherings of University alumni or supporters.

  1. Oversight and Review of Related Entities

Every Related Entity must be overseen by a University officer or senior leader. The University officers and senior leaders responsible for oversight of the University’s Related Entities are responsible for ensuring the entities have appropriate formation, governing, and operating documents in place (e.g., Bylaws; standard operating procedures; MOUs). The responsible officers and leaders must perform periodic reviews, at least every three (3) years, of the Related Entities within their purview. Such reviews should determine whether the entities continue to serve important University interests.

Responsibility for oversight of a particular Related Entity depends on the type of entity as follows:

Type of Entity University Officer or Leader Responsible for Oversight
Legal Subsidiaries Senior Vice President and Chief Financial Officer
Separate Entities Deploying University Resources Vice Chancellor and Provost; or Senior Vice President and Chief Financial Officer
Volunteer Boards and Councils Vice Chancellor and Provost; or Senior Vice President and Chief Advancement Officer
Academic Centers or Institutes Vice Chancellor and Provost ; Senior Vice President and Chief Financial Officer
Associations and Clubs Senior Vice President and Chief Advancement Officer
Other To the extent entities are proposed, formed, or exist that do not fall within one of the above categories, the Chancellor will designate a University officer or other senior leader to oversee such entities.
  1. Exemptions from this Policy

Certain entities or groups are exempt from the requirements of this policy, as they are governed by other University policies, procedures, or contractual agreements. Such entities include:

  • Schools, colleges, academic departments, and administrative units;
  • Boards or committees appointed to evaluate Syracuse University academic or administrative operations for accreditation or compliance purposes, including committees of the Board of Trustees or University Senate, or other ad hoc compliance committees;
  • Registered student organizations, including student sports clubs and student affinity groups; and
  • Fraternities or sororities.

Nothing in this policy is intended to prevent separate entities from collaborating with, or otherwise supporting, the University.

  1. Violations of Policy

Any entity established after the effective date of this Policy outside of the procedures described herein will be dissolved by the University, or upon a directive from the University. The University reserves the right to take appropriate legal action to effectuate a dissolution or cease and desist directive. University employees or students who establish entities in violation of this Policy may be subject to disciplinary action.

  1. Policy Administration

The Office of University Counsel and the Office of the Chief Financial Officer are responsible for administering this policy.  

IV.  To Whom Does This Policy Apply

Select all that apply:

☒  Students     ☒  Faculty     ☒  Staff      ☒  Visitors/General Public     ☒  Other: Anyone wishing to establish a Related Entity

V.  Appendices (as applicable)

A.   Procedures

  1. Creation and Dissolution Procedures.

Any division, school, center, office, unit, or individual seeking to create or dissolve a Related Entity must prepare a written proposal. Proposals for creation should emphasize the purpose(s) of the entity, its connection to the University and its mission, and should include a 5-year budget and basic business plan. Such proposals must also identify the University officer or senior leader who would have oversight responsibility for the entity, and must be endorsed by that person, as well as by the dean or unit leader for the school, college, or unit involved.

Proposals for dissolution should explain why the entity is no longer serving its intended purpose or otherwise providing a benefit to the University. Proposals for dissolution must be endorsed by the University officer or senior leader with oversight responsibility for the entity.

Legal Subsidiaries. Written proposals for creation or dissolution of Legal Subsidiaries must be submitted simultaneously to the Senior Vice President and General Counsel, and the Senior Vice President and Chief Financial Officer. The General Counsel and Chief Financial Officer will consult with appropriate University personnel and units as needed. If the General Counsel and Chief Financial Officer determine that formation or dissolution of an entity is justified, they will so-recommend the appropriate action to the Chancellor. If the Chancellor adopts the recommendations of the General Counsel and Chief Financial Officer, the Chancellor (or a designee) will present the matter to the Executive Committee of the Board of Trustees for a vote.

Separate Entities Deploying University Resources. Written proposals to use the University’s name must be submitted simultaneously to the Senior Vice President and General Counsel, and the Senior Vice President and Chief Financial Officer. The proposal must include the name of the requesting party, the reason for the request, including how the use of the University’s name would be in the best interests of the University, and a full description of how the University’s name will be used. The General Counsel and Chief Financial Officer will consult with appropriate University personnel and units as needed. If the General Counsel and Chief Financial Officer determine that use of the University’s name for a Separate Entity is justified, they will so-recommend the appropriate action to the Chancellor who may adopt or reject the recommendation.

Volunteer Boards and Councils. Written proposals for creation or dissolution of Volunteer Boards and Councils must be submitted simultaneously to the Vice Chancellor and Provost, and the Senior Vice President and Chief Advancement Officer. The Provost and Chief Advancement Officer will consult with appropriate University personnel and units as needed. If the Provost and Chief Advancement Officer determine that formation or dissolution of an entity it justified, they will so-recommend the appropriate action to the Chancellor who may adopt or reject the recommendation.

Academic Centers or Institutes. Written proposals for creation or dissolution of Academic Centers or Institutes must be submitted to the dean of the school or college at issue. The dean will consult with appropriate University personnel and units as needed. If the dean determines that formation or dissolution of an entity is justified, they will so-recommend the appropriate action to the Vice Chancellor and Provost who may adopt or reject the recommendation.

Associations and Clubs. Written proposals for creation or dissolution of Associations and Clubs must be submitted to the Senior Vice President and Chief Advancement Officer. The Chief Advancement Officer will consult with appropriate University personnel and units as needed. If the Chief Advancement Officer determines that formation or dissolution of an entity is justified, they will so-recommend the appropriate action to the Chancellor who may adopt or reject the recommendations.

The foregoing procedures may be modified with approval from the Chancellor where, as determined in the Chancellor’s sole discretion, University interests would so require.

  1. Operational Review Procedures.

The Office of University Counsel will maintain a list of all known and active Related Entities, including the name of each entity, type of entity, and the University officer or senior leader responsible for the entity.

At least every three years, University officers and senior leaders with responsibility for Related Entities will review their entities to determine whether the entities are still serving their intended purposes. The responsible parties will submit a written report summarizing their findings to the Office of University Counsel and the Office of the Chief Financial Officer. The written report must include at least the following elements for each entity covered in the report:

  • A summary of the entity, including its purpose, year established, and activities undertaken in the preceding three years;
  • A description of the benefits provided to the University by the entity;
  • A description of the University resources used by the entity, if any;
  • An explanation of how the entity is funded, and whether it is financially viable;
  • A confirmation that there is an appropriate MOU in place, if applicable;
  • A summary of any risks, liabilities, or operational issues encountered by the entity during the reporting period; and
  • A conclusion as to whether the entity continues to serve its intended purpose.

Within 60 calendar days of receiving an operational report, the Senior Vice President and General Counsel and Senior Vice President and Chief Financial Officer will inform the Chancellor of any operational or compliance concerns involving the Related Entities covered in the report, and will propose a corrective action plan.

The Comptroller’s Office is responsible for financial oversight of Legal Subsidiaries, and the review procedures for those entities may differ from the procedures described in this section. Specifically, the Comptroller’s Office monitors Legal Subsidiaries on an ongoing basis, and prepares annual financial statements for those entities. An outside auditor performs accounting and tax services for the Legal Subsidiaries.

  1. Business Transactions with Affiliated Organizations.

Business transactions between the University and Affiliated Organizations are subject to the requirements and procedures set forth in the University’s Policy on Business Transactions Between the University and its Affiliated Organizations.

B.  Definitions

The following definitions apply to this policy:

Academic Centers or Institutes” are formally-structured associations among faculty, staff, and students formed to further specific research, advocacy, or other academic endeavors (e.g., Burton Blatt Institute; Transactional Records Access Clearinghouse (TRAC); Falcone Center for Entrepreneurship).

Associations or Clubs” are formally organized groups that are established to encourage social engagement and support related to schools, colleges, or specific programs at the University (e.g., SU Law Alumni Association). Associations and Clubs do not include: registered student organizations or club sports; fraternities or sororities, student affinity groups, or other informal gatherings of University supporters.

Affiliated Organizations,” as defined in the University’s Policy on Business Transactions Between the University and its Affiliated Organizations, means (a) corporations, partnerships, limited liability companies or other organizations in which Syracuse University owns, directly or indirectly, more than 50% of the ownership interests in the entity, (b) non-profit organizations in which Syracuse University has the power to appoint or elect a majority of the organization’s directors or trustees or where a majority of the organization’s directors or trustees are trustees, directors, officers, employees or agents of Syracuse University, and (c) organizations that conduct joint programs or share facilities or employees with Syracuse University. Legal Subsidiaries and Separate Entities Deploying University Resources are Affiliated Organizations.

Legal Subsidiaries” are separate corporate entities that are owned or controlled, in whole or in part, by the University (e.g., Drumlins, Inc; Orange Insurance Company, LLC).

Related Entities” means Affiliated Organizations and other related entities, including Legal Subsidiaries, Separate Entities Deploying University Resources, Volunteer Boards and Councils, Academic Centers or Institutes, and Associations or Clubs.

Separate Entities Deploying University Resources” are separate entities that receive funding from the University, or otherwise use University personnel, property, or assets (e.g., Community Folk Art Center, Inc.; Light Work Visual Studies, Inc.).

University Officer or Senior Leader” means the officers set forth in the University’s Bylaws, or a member of the Chancellor’s Executive Team.

Volunteer Boards and Councils” are committees comprised of University personnel and outside volunteers such as alumni, that provide schools, colleges, and administrative units with philanthropic support and strategic management advice (e.g., College of Law Board of Advisors; Friends of Hendrick’s Chapel; Falk Board of Visitors).

C.   Forms

To be developed.

D.   Other Related Policies and Documents