Procedure to Create and Dissolve an Affiliated Entity

Procedure for Establishment of an Affiliated Entity
The Business Unit considering establishing an Affiliated Entity should consult with the office of the University Secretariat and Legal Counsel at the earliest stage of the planning process to ensure that all legal requirements are fulfilled, and that the proposed organization would meet the definition of an Affiliated Entity.

The Sponsoring Business Unit is responsible for managing the consultation and approval process for the proposal. Attached in Appendix A is a list of topics to be considered together with the office that should be consulted for each topic, as applicable.

The responsibility for preparing a Preliminary Proposal to create an Affiliated Entity lies with the Sponsoring Business Unit.

The Sponsoring Business Unit will develop a Preliminary Proposal which will include:
  1)    Goals and objectives of the proposed Affiliated Entity.
  2)    Proposed legal structure of the Affiliated Entity, including the relationship of the university with the Affiliated Entity together with the rationale supporting the recommended legal structure.
  3)    Proposed governance structure. The proposed governance structure shall reserve at least one voting position on the Entity’s board or equivalent body for the Senior University Representative.
  4)    A description of how the Affiliated Entity aligns with the university’s strategic goals, and/or core academic mission.
  5)    Preliminary risk assessment that defines and classifies risks inherent to both the proposed Entity and the university, including potential conflict of interest.  The assessment should include:
    i)    Risk identification – this involves identifying sources/causes of risk, areas of impact, anticipated events and  their potential results.
    ii)    Risk evaluation– this involves developing an understanding of the risk, and rating the risks by determining impacts and their likelihood.
  6)    An evaluation of the need for any formal agreements between the university and the proposed Affiliated Entity.
  7)    The identification of any services the university is expected to provide to the Affiliated Entity.
  8)    Evidence of consideration and a recommendation as to whether provisions should be incorporated in the establishing documents providing for consent or approval by Queen’s of fundamental changes to the mission, mandate, or purpose of the Affiliated Entity.

Preliminary Proposals for the creation of an Affiliated Entity shall be forwarded by the Dean or AVP of the Sponsoring Business Unit to the University Secretary, Associate Vice-Principal (Finance and Administration), and Executive Director, Planning and Budgeting who will review to ensure that all relevant factors have been addressed.

Once final, the Preliminary Proposal will be sent to the Vice-Principal (Finance and Administration), who will review and determine if it can proceed to the approval process.

Preliminary Proposals that are deemed by the Vice-Principal (Finance and Administration) to be ready for the formal approval process will be submitted by the Dean or the Associate Vice- Principal of the Sponsoring Business Unit to the Senior Leadership Team for approval to proceed with a Detailed Proposal.

Upon approval of the Preliminary Proposal, the Sponsoring Business Unit will complete a Detailed Proposal.

The Vice-Principal (Finance and Administration) will notify the Finance, Assets, and Strategic Infrastructure Committee of any Preliminary Proposals moving to the Detailed Proposal stage.

The responsibility for preparing a Detailed Proposal to create an Affiliated Entity lies with the Sponsoring Business Unit.

Any costs involved in the creation of an Affiliated Entity (such as the costs of incorporation or due diligence) will be borne by the Sponsoring Business Unit.

The Sponsoring Business Unit is responsible for ensuring that appropriate consultation occurs as part of the development of the Detailed Proposal. Attached in Appendix A is a list of topics to be considered together with the office that should be consulted for each topic.

The Sponsoring Business Unit will develop a Detailed Proposal
which will include, in addition to the information in the Preliminary Proposal:
  1)    Projected budget and business plan for at least five years, including establishing a maximum level of financial support from the University, and key financial monitoring metrics.
  2)    Thorough risk assessment that defines and classifies risks inherent to both the proposed Affiliated Entity and the university, including potential conflicts of interest. The risk assessment must include 
    i)    mitigation strategies categorized under prevention, detection, and response. 
    ii)    metrics designed to quantify risk throughout the life of the Affiliated Entity, such as likelihood of occurrence and impact.
  3)    A defined stage-gate approach to funding to ensure that any further University funding is only granted based on success as defined by clear financial and/or business metrics.
  4)    A record of the consultations undertaken in developing the proposal together with key outcomes / directions resulting from the consultations (see Appendix A).
  5)    Proposed memorandum of agreement defining the services, together with fees for the services, if the university is expected to provide services of any kind to the Affiliated Entity.
  6)    A list of any additional formal agreements between the university and the proposed Affiliated Entity that have been developed and/or are still outstanding.
  7)    Evidence that appropriate industry, functional and financial skills are in place in the proposed management team of the Affiliated Entity.
  8)    A commitment for the Affiliated Entity to undergo an annual audit.

Detailed Proposals for the creation of an Affiliated Entity shall be forwarded by the Dean or AVP of the Sponsoring Business Unit to the University Secretary and the Associate Vice-Principal (Finance and Administration), and the Executive Director, Planning and Budgeting who will review to ensure that all relevant subject matters have been addressed.

Once final, the Detailed Proposal will be sent to the Vice-Principal (Finance and Administration), who will review the Detailed Proposal and supporting documentation and determine if it can proceed to the approval process.

Detailed Proposals that are deemed by the Vice-Principal (Finance and Administration) to be ready for the formal approval process must first be submitted by the Dean or AVP of the Sponsoring Business Unit to the Senior Leadership Team (SLT) before being presented to the Finance, Assets, and Strategic Infrastructure Committee for review.

The Finance, Assets, and Strategic Infrastructure Committee will, following its review and satisfaction with the Detailed Proposal, recommend approval to the Board of Trustees.

The establishment of any Affiliated Entity must be approved by the Board of Trustees.

Procedure for Dissolving an Affiliated Entity

The Sponsoring Business Unit considering dissolution of an Affiliated Entity should consult with the University Secretary and Corporate Counsel. 

The Sponsoring Business Unit is responsible for managing the consultation and process to dissolve the Affiliated Entity.

Appropriate steps to implement sun setting provisions, including seeking approval from the Board of Trustees of the university, will be initiated.

The proposal for dissolution of an Affiliated Entity shall be forwarded by the Dean or AVP of the Sponsoring Business Unit to the University Secretary and the Associate Vice-Principal (Finance and Administration), who will review the proposal to ensure that all relevant matters have been addressed.

The proposal for dissolution will then be sent to the Vice-Principal (Finance and Administration), who will review it and determine if and when the proposal can be presented to SLT. Upon SLT approval, the proposal for dissolution will be presented to the Finance, Assets, and Strategic Infrastructure Committee for review.

The Finance, Assets, and Strategic Infrastructure Committee will, following its review and satisfaction with the proposal for dissolution, recommend approval to the Board of Trustees.

Areas to be Considered

Considerations

Consult with

• Type of Entity:
  • Incorporated
  • Joint Venture
  • Partnership
  • Other similar entity
• Implications for university’s charitable status

• University Secretariat and Legal Counsel 

• Purpose for Affiliated Entity and strategic rationale
• Alignment with the university’s strategic goals/ core academic mission

• Sponsoring Business Unit

• Consultation and/or
  governance process to be
  followed

• University Secretariat and Legal Counsel 

• Employer of record
• Secondments
• Process for appointment, review, termination
• Benefits/Pension
• Association representation
• Employee ethics
• Labour Relations Act, impact
• Other, as dictated by the proposal

• Human Resources / Labour Relations/ Faculty Relations

• Intellectual property ownership
• Process for commercialization

• Office of Vice-Principal
  (Research)

• Board of Directors
• Officers
• Advisory boards
• Other, boards/committees/structures

• University Secretariat and Legal Counsel 

• Budget
• Financial contributions and reporting considerations
• Record keeping
• Audits
• Financial systems and controls
• Asset ownership/transfer
• Ownership dissolution
• Taxation

• Office of AVP Finance and Administration
• Office of Planning and Budgeting

• Indemnities
• Limitation on liability
• Insurance
• Environmental health &
  safety matters
• Security issues

• Office of Risk and
  Safety Services
• University Legal
  Counsel

• IT Services (if provided by Queen’s IT Services)

• IT Services

• Space requirements

• Campus  Planning and Real Estate (on campus)

• Renewals
• Rights upon dissolution

• University Secretariat and Legal Counsel 

• Research ethics implications

• University Research
  Services

• Research security considerations

• University Research Services

• Use of university name/logo/trademarks
• Government linkages
• Reputational risk

• Office of the Vice-
  Principal (University
  Relations)

• Eligibility to apply for and
  hold research funding

• University Research Services

• Contract signing authority

• University Legal Counsel 

• Use of personal information
• Records management & retention issues

• Records Management and Privacy Office

• Relations with potential donors and linkage to university

• Office of the Vice-
  Principal
  (Advancement)

• Confidentiality
• Governing Law
• Other, as required

• University Legal Counsel
• Others, as required