Commercial Activities Policy (Transitional)

1. Purpose

1.1 The Commercial Activities Policy (the policy) fulfils Council’s obligation to establish guidelines for commercial activities under section 21B(1) of the University of Technology Sydney Act 1989 (NSW) (the UTS Act). Specifically, this policy:

1. further defines commercial activities in line with section 21A of the UTS Act
2. outlines requirements for evaluating commercial activity proposals, approving commercial activities, and monitoring and reporting on commercial activities, and
3. identifies appropriate governance and administrative arrangements for commercial activities and further requirements in relation to controlled entities.

1.2 This policy is supported by the Commercial Activities Management Procedure (SharePoint) (the procedure) and should be read in conjunction with the Competitive Neutrality and Pricing Policy, which applies to all commercial activities undertaken at UTS.

2. Scope

2.1 This policy applies to all:

1. activities classified as commercial in section 21A of the UTS Act and this policy (refer statement 2.2), and
2. individuals (staff, affiliates and committees) involved in the evaluation, approval and management (review, monitoring and reporting) of these commercial activities.

2.2 Commercial activity, as defined in section 21A of the UTS Act, includes the promotion and establishment of or participation in any partnership, trust, company or other incorporated body, or joint venture, by or on behalf of UTS, for the primary purpose of making a financial profit, either in the short or long term.

2.3 The following activities are not considered commercial activities and are, therefore, out of scope of this policy:

1. award courses, short forms of learning, education and training activities and university non-award courses delivered on or offshore
2. the sale or provision of amenities, goods, services, facilities or equipment to faculties, units, staff or students of the university whether provided via UTS or via a contracted third party
3. research, or research that leads to the provision, sale or acquisition of property, goods, services or things that are the result or product of that research, either on or offshore
4. the provision of contract research, expert advice and consulting activities (managed by the Research Office in line with the Research Policy, the University Consulting Procedure (SharePoint) and the Outside Work Policy)
5. Cooperative Research Centres (CRC), except where UTS is the sole member, ongoing or for a period of time, of a company established in relation to research commercialisation or a CRC, in which case approval is required by the Vice-Chancellor (in line with the UTS Delegations)
6. activities undertaken in response to a grant, funding agreement or other agreement with the federal or a state or territory government or their funding bodies
7. services provided on a cost-recovery basis or not-for-profit basis
8. charitable fundraising or development activities or sponsorship conducted by or on behalf of the university (refer Philanthropic Fundraising Policy)
9. the hire of university facilities for a fee  (refer Facilities Hire Policy)
10. investment in infrastructure and the management of UTS facilities
11. the purchase and sale of property or shares where making a financial profit is not the primary purpose
12. activities undertaken in a legal entity (such as a company) in which the university has an interest. This exception does not apply to activities in controlled entities or commercial joint ventures of the university (refer statement 3.3 where there is ambiguity)
13. any activity exempted by Council on a legal, financial, risk and general liabilities basis aligned with the ethos of the Delegations
14. the university forming a membership or partnership with an association, trust, joint venture that is onshore for a purpose of engaging in activities described in this statement 2.3 a-m.

3. Principles

3.1 Commercial activities at UTS must:

1. align with the UTS 2027 strategy and values
2. be considered for approval based on a clear identification and appropriate management of the relevant opportunities and risks
3. provide clear benefits to the university (financial and other benefits)
4. be managed prudently, ensuring all funds and resources are allocated and acquitted appropriately, and
5. comply with any relevant reporting requirements to ensure continued accountability and transparency.

3.2 UTS undertakes a variety of commercial activities. Decision-making around these activities is risk-based, transparent and shows clear accountabilities. Sponsors, approval authorities and responsible owners of activities are responsible for mitigating and managing any risks in line with this policy.

3.3 Commercial activities under this policy require particular risk management and oversight. By approving commercial activities, approval authorities are agreeing that these risks have been and will be appropriately managed. 

3.4 Risk management processes must be conducted where there is ambiguity in relation to the commercial nature of an activity. If required, the process will escalate to the Chief Operating Officer for approval in line with this policy and the procedure.

4. Policy statements

4.1 Under section 6(3)(a) of the UTS Act, UTS may undertake commercial activities to generate funds for the benefit of the university including to:

1. fulfil its research and development roles
2. contribute to Australia’s economic advancement
3. contribute to the university’s financial viability, and
4. transfer the benefits of the university’s broader functions to the community.

Council delegations and university authorities for commercial activities

4.2 In line with section 17 of the UTS Act, Council has delegated responsibilities for the evaluation, approval, management and review/monitoring of some commercial activities (refer Appendix 1) in accordance with the following.

1. Council may delegate approval authority for a commercial activity where the proposed commercial activity is covered by the university’s existing insurance policies or where the uninsured liability is within the delegated authority of the approving senior executive or committee. It is expected that a financial provision will be made in the pricing of the commercial activity to provide an element of cover for the uninsured liability.
2. Council may limit responsibilities delegated under section 17 of the UTS Act by any means or criteria at any time.
3. Delegations in respect of commercial activities may only be exercised where delegates have appropriate commercial experience or have obtained advice from an appropriately qualified person.
4. The approval authority of a proposed activity must not also be the sponsor of the activity. In such cases, the new approver should default to the next most senior person or, where appropriate, to Council.
5. A Council delegated approval authority also provides authority to execute instruments to give effect to the commercial activity, in line with UTS policies and the request for contract signing (available at Office of General Counsel: Request for Contract Signing (SharePoint)).
6. Commercial activities may be ended or discontinued by the relevant approval authority or by Council at any time.
7. The appointment of a person to hold a position as a director of a company on behalf of the university is made in line with the Delegations by Council, except the appointment of CRC directors, which can be made by the Deputy Vice-Chancellor (Research), or directors of research commercialisation companies, which can be made by the Vice-Chancellor.

Determination and classification of commercial activities

4.3 Commercial activities are defined in the UTS Act, this policy and are further classified in the procedure.

4.4 Any new activity that may potentially be commercial but does not fall into one of the classifications identified in the UTS Act, this policy and defined in Appendix 1 of the procedure must be risk assessed in accordance with the Risk Management Policy. Where appropriate, it may be referred to the Chief Operating Officer (COO) for consideration who may escalate it to Council if required.

4.5 The COO will use a clear and transparent risk assessment process (as approved by Council and outlined in the procedure) to either:

1. make a recommendation to Council with regard to the classification of the activity, or
2. propose a new classification of commercial activity.

4.6 Where Council approves a new classification of commercial activity, this policy and the procedure must be amended as appropriate by the Governance Support Unit (GSU) to reflect the new classification or precedent.

Evaluation and approval of a commercial activity proposal

4.7 Sponsors may submit for evaluation any of the following in line with this policy and the procedure:

1. newly proposed commercial activities
2. activities that are potentially commercial as determined by the COO or Council, or
3. changes to existing commercial activities.

4.8 Proposals must be submitted on the Commercial activity evaluation, approval and registration form (SharePoint) and reviewed by the relevant evaluators (refer Appendix 1).

4.9 All required proposal documentation must be completed and endorsed by both the sponsor and the evaluator before submission to the approval authority (refer the procedure).

4.10 The approval authority must:

1. ensure that all evaluation activities outlined in the procedure have been met as required by this policy and the UTS Act
2. be satisfied that the proposal documentation has met the necessary criteria as outlined in the procedure, and
3. confirm approval by way of documented endorsement (for example, a minuted resolution of Council or a signed approved memo).

4.11 The approval authority must notify the Office of General Counsel of the approved commercial activity (including the person or people responsible for reporting on the activity) for inclusion in the register of university commercial activities (the register).

Additional requirements for the evaluation, approval and establishment of a controlled entity

4.12 Council is responsible for the approval of all controlled entities and must adhere to and fulfil the obligations outlined in sections 16(1B) and 16A of the UTS Act, which outline limits on activities and functions and required governance arrangements in order to safeguard the university’s interests and limit its liability.

4.13 Council requires each controlled entity to agree to observe the same limits on its activities and functions as apply to the university (outlined in section 16(1B) of the UTS Act).

4.14 Controlled entities must provide reports to responsible senior executive and/or Council on their activities, functions and governance arrangements in line with this policy and the procedure.

4.15 As far as is reasonably practical, Council must ensure that the proposal and establishment documents for each controlled entity:

1. include appropriate limitation provisions in its constitution
2. include a relevant corporate strategy and/or business plan outlining achievable and measurable goals, values and performance targets
3. outline appropriate and effective risk management strategies, including independent evaluation, accountability and audit processes, in line with the UTS Act, this policy and the procedure
4. require that the entity's directors possess the necessary expertise and experience to provide proper stewardship and control of the entity
5. recommend the inclusion of board members who are not Council members, staff or students of the university, and
6. outline governance principles, requirements and practices (including reporting requirements in line with Appendix 2), and a mechanism for reviewing these governance arrangements.

Review and reporting requirements of commercial activities

4.16 Every UTS commercial activity included on the register must be reviewed and risk assessed by the responsible owner at least once a calendar year in line with the procedure.

4.17 An exception report detailing the issues and circumstances must be provided to the relevant approval authority (outlined in Appendix 1) if one of the following arises from the annual management review:

1. a change to the risk profile, and/or
2. a recommendation is made to end or modify a commercial activity.

4.18 The COO will prepare an annual report for the Audit and Risk Committee for their input and oversight including: 

1. a statement of assurance
2. a summary of activities (as appropriate by classification) with risk assessments
3. an outline of all activities, or classification of activities, valued above the delegated financial level for a Deputy Vice-Chancellor as detailed in section 1.2 of the Delegations (currently $2,000,000)
4. any exception reporting that has taken place, and
5. the response of the approval authority to any exception reporting.

4.19 Every 3 years the COO will receive a detailed report of all activities contained in the register. This triennial report will be based on the information provided by responsible owners to the Office of General Counsel, gathered as part of the annual management reviews, including: 

1. any significant changes to the activity, including identification of changes to the risks associated with the activity or the financial basis of the activity, and 
2. in light of associated risks or other developments, any recommendations as to whether the commercial activity should be continued for a further period, modified (including appointment of a new responsible owner) or ended. 

4.20 The COO will provide this report to the Audit and Risk Committee and then to Council for their oversight and input.

Additional reporting requirements for controlled entities and authorities of Council

4.21 To enable Council to have sufficient oversight, and to fulfil its obligations under the UTS Act and this policy, controlled entities must report on their functions, activities and governance arrangements as outlined in the Commercial Activities Reporting Protocol in Appendix 2.

4.22 The senior executive responsible for a controlled entity (the responsible owner) must, among other reporting requirements, provide Council with evidence that their assigned controlled entity continues to meet its responsibilities by reporting on:

1. internal assessments and expert (external) evaluations of the nature, efficacy and adequacy of their management and operational systems and processes, and
2. the identification of any amendments, additions and improvements to their systems and processes as requested by Council.

4.23 Council may at any time:

1. request reports or other information from a controlled entity
2. declare that any particular commercial activity, or class of commercial activities, undertaken by a controlled entity shall be subject to additional processes and systems for assessment and approval, and/or
3. request that responsible senior executive work with the controlled entity to review whether any activity proposed to be undertaken by a controlled entity should be subject to processes and systems more closely aligned or consistent with those that are used by the university for its own commercial activities.

Conflicts of interest

4.24 Council and committee members involved in the evaluation, approval, management and/or reporting of commercial activities (including controlled entities) are subject to the requirements detailed in Schedule 2A of the UTS Act, including the disclosure of any interests.

4.25 Staff and affiliates must declare any actual, perceived or potential conflicts of interest in line with the Conflicts of Interest Disclosure Policy. 

Register of commercial activities and controlled entities

4.26 Council must ensure a register of university commercial activities (the register) is established in line with section 21C of the UTS Act. This register is managed and maintained by the Office of General Counsel. 

4.27 In addition to the requirements of section 21C, the register must also contain the following information on controlled entities and their commercial activities (this may be kept in a separate subsection of the register relating to controlled entities):

1. the basis on which the controlled entity was established
2. the formal status of the entity
3. names of the directors or other owners including a short statement of their qualifications and experience
4. a summary of the governance arrangements and processes established by the entity for its own commercial activities, and details of where further information about the entity, including all reports received from the controlled entity, can be obtained, and
5. information on commercial activities owned by UTS controlled entities that is equivalent to the information required by UTS for its own commercial activities.

4.28 The register must be kept up to date and accessible to members of Council under conditions determined by Council from time to time and recorded in the minutes of Council.

4.29 Council may, in accordance with section 21C(2), make alterations or exemptions to the register. In doing so, Council must keep a record of and include such determinations in the register.

4.30 Council may authorise the COO to amend or supplement any details included in the register if:

1. the details are considered inaccurate or incomplete, or
2. an approved change to a commercial activity (in line with this policy and the procedure) requires a subsequent change to the relevant details included in the register.

Review of the register

4.31 The register must be reviewed once every 3 years by an independent person or people designated by the Provost to ensure that the register is up to date and that the information contained meets the purposes of the UTS Act and this policy.

4.32 The review shall be conducted in accordance with a self-assessment process developed and overseen by an independent auditor.

4.33 A report of each review must be provided by the COO to the Audit and Risk Committee for noting.

Breaches of this policy

4.34 Breaches of this policy will be dealt with in accordance with the relevant Enterprise agreement, employment contract, the Code of Conduct and Council’s resolutions relating to conflicts of interest.

4.35 Breaches of this policy that relate to issues of serious wrongdoing will be managed under the Whistleblowing and Public Interest Disclosures Policy.

4.36 The COO is responsible for authorising corrective action to rectify all breaches of this policy, and must report any activities that may involve corrupt conduct, maladministration or serious and substantial waste of public funds in line with the Whistleblowing and Public Interest Disclosures Policy.

5. Roles and responsibilities

5.1 Policy owner: The Chief Operating Officer (COO) on behalf of the Vice-Chancellor is responsible for the enforcement of and compliance with this policy, ensuring that all its principles and statements are observed, and is responsible for the approval of any associated university level procedures. The COO is the university’s nominated custodian of the register and is responsible for the annual and triennial reporting to Council.

5.2 Policy contact: The COO has accountability for coordinating the implementation of this policy, acting as a primary point of contact and providing advice to the university community about the operation of UTS commercial activities.

5.3 Implementation and governance roles:

1. Approvers and evaluators as listed in Appendix 1 have specific responsibilities in relation to this policy.
2. Council and its committees receive reports in relation to commercial activities as outlined in Appendix 2.
3. Council is responsible for the oversight and management of commercial activities and controlled entities as outlined in the UTS Act and this policy.
4. The Provost is responsible for engaging the independent person who will conduct the triennial review of the register.
5. The Office of General Counsel is responsible for maintaining the register of university commercial activities (the register) in line with this policy.

6. Definitions

The following definitions apply for this policy and all associated procedures. These are in addition to terms defined in Part 4 of the UTS Act and Schedule 1, Student Rules. Definitions in the singular include the plural meaning of the word.

Approval authority (or approver) means Council or the UTS staff member with responsibility for approving a proposal for the establishment of a commercial activity in line with this policy and the procedure. Approval authorities must be satisfied that the requirements of the UTS Act and this policy have been met in advance of approval and may seek additional advice from evaluators, the Office of General Counsel and/or committees of Council as necessary. The approval authority of a proposed activity must not also be the sponsor of the activity.

Commercial activity (or activity) is defined in section 2 of this policy.

Controlled entity means any person, group of people or body as defined in section 16A of the UTS Act. Controlled entities are commercial activities. 

Evaluator means the UTS staff member with responsibility for evaluating a proposal for a commercial activity in line with this policy and the procedure. Evaluators must be satisfied that the requirements of the UTS Act and this policy have been met in advance of submission to the approval authority. Evaluators may also provide additional advice and context for approval authorities.

Proposal means any formal proposal developed in line with this policy and the procedure for the university to participate in a commercial activity. Proposals must be submitted on UTS’s formal proposal documentation as outlined in the procedure. 

Responsible owner means the UTS individual/individual(s) responsible for the relationship with the controlled entity or commercial activity after the completion of the approval process. The responsible owner(s) should be identified, or the process for selecting the responsible owner should be identified, as part of the proposal. A member of the senior executive must be the responsible owner for controlled entities and commercial activities that are considered higher risk. 

Risk is defined in the Risk Management Policy. For the purposes of this policy includes:

1. risk of financial loss
2. risk of incurring a legal liability
3. risk of loss of or damage to the reputation of the university
4. risk of corruption or malpractice
5. risk to workplace health and safety
6. risk of impairment of the conduct of UTS’s principal functions under section 6 of the UTS Act
7. risk of adverse tax or duty consequences to the university
8. other risks specific to a particular commercial activity where those risks are believed to be material, or
9. any other type of risk determined by Council to be a risk for the purposes of this policy.

Serious wrongdoing is defined in the Whistleblowing and Public Interest Disclosures Policy.

Sponsor means the individual(s) responsible for proposing the establishment of a commercial activity under the scope of this policy.

Approval information

Policy contact	Chief Operating Officer
Approval authority	Council
Review date	2026
File number	UR20/1373
Superseded documents	Commercial Activities Policy 2015 (UR 15/329)

Version history

Version	Approved by	Approval date	Effective date	Sections modified
1.0	Council (COU/20-4/80)	19/08/2020	01/10/2020	New policy.
1.1	Deputy Director, Governance Support Unit (Delegation 3.14.2)	03/03/2021	03/03/2021	Minor correction to Appendix 4 to align frequency and timing of triennial reviews. Updates to references and links.
1.2	Council (COU/21-6/143)	24/11/2021	17/12/2021	Updates to reflect changes under the portfolio realignment (Fit for 2027) and minor operational fixes. Changes to appendix 1 (commercial leases) also approved via Physical Infrastructure Committee report (COU/21-6/142).
1.3	Director, Governance Support Unit (Delegation 3.14.1)	14/03/2022	14/03/2022	Updates to change policy contact from Manager, Strategic Initiatives to the Director, Risk. Other changes resulting from Fit for 2027 restructure and Operations division titles.
1.4	Director, Governance Support Unit (Delegation 3.14.1)	01/11/2022	02/11/2022	Changes and updates required as part of the policy migration project.
1.5	Deputy Director, Corporate Governance (Delegation 3.14.2)	24/11/2022	05/12/2022	Minor change to reflect new position title of General Counsel and Executive Director, Risk and Compliance.
1.6	Deputy Director, Corporate Governance (Delegation 3.14.2)	09/02/2023	09/02/2023	Minor change to refer to the new request for contract signing document managed by the Legal Unit.
1.7	Council (COU/23-2/38)	19/04/2023	05/05/2023	As part of a wider review, first suite of changes to reflect authority of Vice-Chancellor to approve establishment of research commercialisation companies and solely owned CRCs.
1.8	Council (COU/23-2/38)	19/04/2023	05/07/2023	Second suite of changes as part of a review to reflect the disestablishment of the Commercial Activities Committee.
1.9	Director, Governance Support Unit (Delegation 3.14.1)	08/09/2023	30/09/2023	Changes resulting from the development of the Whistleblowing and Public Interest Disclosures Policy.
1.10	Deputy Director, Corporate Governance (Delegation 3.14.2)	19/09/2024	23/09/2024	Update to reflect new title of Deputy Vice-Chancellor (External Engagement and Partnerships).

References

Code of Conduct

Commercial Activities Management Procedure (SharePoint)

Competitive Neutrality and Pricing Policy

Conflicts of Interest Disclosure Policy

Facilities Hire Policy

Office of General Counsel: Request for Contract Signing (SharePoint)

Outside Work Policy

Philanthropic Fundraising Policy

Research Policy

Risk Management Policy

University Consulting Procedure (SharePoint)

University of Technology Sydney Act 1989 (NSW)

UTS Delegations

UTS 2027 strategy

Whistleblowing and Public Interest Disclosures Policy

Appendix 1: Commercial activities evaluation, approval, management and review responsibilities

The following commercial activities are listed by classification. The 6 classifications are approved by Council and defined in Appendix 1 of the procedure.

1. Controlled entities

University commercial activity threshold/trigger	process/stage	Authorities approved by Council/delegates
All	Evaluation	Chief Operating Officer
All	Approval	Council
All	Review and monitoring	Chief Operating Officer

2. Commercial joint venture projects

(other than those listed under statement 2.3 of this policy)

University commercial activity threshold/trigger	Process/stage	Authorities approved by Council/delegates
All	Evaluation	Relevant member of UTS senior executive
All activities with over $5,000,000 annual UTS income or expenditure, or involving a UTS interest in a company (excluding research commercialisation or CRC related companies)	Approval	Council
Establishment of (or participation in) research commercialisation companies (non-CRC) or UTS sole ownership of a CRC. No limit to value of annual income or expenditure	Approval (to be reported to next Council meeting)	Vice-Chancellor
All activities between $2,000,000 and $5,000,000 annual UTS income or expenditure, and not involving a UTS interest in a company	Approval	Vice-Chancellor
All activities between $1,000,000 to $2,000,000 annual UTS income or expenditure, and not involving a UTS interest in a company	Approval	Chief Operating Officer
All activities with under $1,000,000 annual UTS income or expenditure, and not involving a UTS interest in a company	Approval	Delegate with the appropriate authority under financial delegation 1.2 or 1.7 (refer Delegations)
All joint venture projects	Review and monitoring	Chief Financial Officer

3. Intellectual property commercialisation

University commercial activity threshold/trigger	Process/stage	Authorities approved by Council/delegates
Research-related intellectual property	Evaluation	Director, Research Office
Licensing or assignment of research-related intellectual property	Approval	DVC (Research)
Research-related intellectual property	Review and monitoring	Director, Research Office
Student-related startups	Evaluation	DVC (External Engagement and Partnerships)
Establishment of a student-related startup company with UTS investment >$100,000	Approval	Council
Establishment of a student-related startup company with UTS investment <$100,000	Approval	DVC (External Engagement and Partnerships)
Student-related startups	Review and monitoring	DVC (External Engagement and Partnerships)
Make patent applications on behalf of UTS with regard to any patentable invention or discovery in which UTS has a right or interest.	Evaluation	Director, Research Office
Make patent applications on behalf of UTS with regard to any patentable invention or discovery in which UTS has a right or interest.	Approval	DVC (Research)          Director, Research Office (subject to conditions prescribed by the DVC (Research))
Make patent applications on behalf of UTS with regard to any patentable invention or discovery in which UTS has a right or interest.	Review and monitoring	Director, Research Office
All other intellectual property commercialisation	Evaluation	Provost
Licensing or assignment of all other intellectual property	Approval	Provost
All other intellectual property commercialisation	Review and monitoring	Provost

4. Commercial lease

(other than those listed under statement 2.3 of this policy)

University commercial activity threshold/trigger	Process/stage	Authorities approved by Council/delegates
All	Evaluation	Manager, Retail and Commercial Property
Where lease is included in Vice-Chancellor-approved lease plan	Approval	Director, Property
Where lease is not included in lease plan and valued up to $250,000 per year.          In exceptional circumstances, where lease is not included in lease plan, and valued up to $5,000,000.	Approval	Director, Property
Where lease is not included in lease plan, valued over $5,000,000.	Approval	Vice-Chancellor
All leases	Review and monitoring	Chief Operating Officer

5. Public clinics

University commercial activity threshold/trigger	Process/stage	Authorities approved by Council/delegates
The provision of health or other services to the public for a fee, where UTS students and/or staff are not the primary client group	Evaluation	Dean/director of relevant faculty/unit/institute
The provision of health or other services to the public for a fee, where UTS students and/or staff are not the primary client group	Approval	Provost
The provision of health or other services to the public for a fee, where UTS students and/or staff are not the primary client group	Review and monitoring	Chief Operating Officer

6. Offshore projects

(other than those listed under statement 2.3 of this policy)

University commercial activity threshold/trigger	Process/stage	Authorities approved by Council/delegates
All	Evaluation	As per class of activity, following consultation with DVC (International)
All	Approval	As per class of activity, following consultation with DVC (International)
All	Review and monitoring	As per class of activity, following consultation with DVC (International)

 

Appendix 2: UTS commercial activities reporting protocol

Visit Appendix 2: UTS commercial activities reporting protocol (PDF).