Involvement in Faculty & Student Ventures
Harvard Business School (HBS) has a long tradition of entrepreneurial activity. In recent years, the emphasis on entrepreneurship at Harvard Business School specifically and at Harvard University more generally has grown considerably and is expected to grow and evolve in coming years. This policy revises and clarifies the School’s previous policy on faculty involvement in student ventures and extends it to cover student involvement in faculty ventures.1
Mission: The HBS mission is to educate leaders who make a difference in the world. An HBS faculty member’s primary responsibility to students is to educate them, help them develop their leadership skills, and prepare them to graduate.
Faculty Interaction: Important components of the HBS educational experience take place both inside and outside the classroom. Faculty members can and should play a valuable role with students by offering them advice and counsel on academic and career issues, including new ventures.
Conflicts of Interest: Financial or business relationships between students and faculty members have the potential to create conflicts of interest. Such conflicts—real or perceived—are most apparent when a faculty member is grading a student’s work, but they can also exist when there is the potential to grade future work, to vote on degrees, or to vote on disciplinary matters. Although the HBS Conflict of Interest Policy covers some of these issues, this policy is intended to provide more specific guidance, to avoid or eliminate potential conflicts before they arise, and to ensure that faculty-student interactions do not endanger the School’s mission, values, or reputation.
Administration and Oversight: As with other School policies, HBS faculty members and students are responsible for understanding and complying with this policy. Faculty members and students are encouraged to seek advice from the Dean or a Dean’s designate for activities or questions not explicitly covered by the policy, or to request interpretations of the policy, as needed. The Dean’s Office will use the annual reporting process and periodic audits to monitor compliance.
For the purposes of this policy statement, the following definitions apply:
A faculty member is anyone with a current full-time or part-time HBS faculty appointment.2 A faculty member who is on a leave of absence is still considered a full-time employee. In addition, all policies described in this document apply to a faculty member’s immediate family members (defined as the faculty member’s spouse or partner and dependent children).
A currently enrolled student is:
any student enrolled in an HBS MBA, doctoral (DBA or Ph.D.), post-doctoral, or joint-degree program (e.g., JD/MBA or MD/MBA). For the purposes of this policy, a student on summer break or who has withdrawn from an HBS program within the last year (e.g., is on leave) is considered a currently enrolled student. Students are no longer enrolled in an HBS program after they graduate.
any participant in an HBS open enrollment executive education
program.3 Executive education participants are considered enrolled until they receive a certificate of completion. Participants in HBS custom executive education programs are not covered by this policy.
any student from Harvard University or any other university that is registered for a course taught by an HBS faculty member.4
A student venture is any entity that is, or is expected to be, substantially controlled, owned, or managed by a currently enrolled student. These entities include all for-profit and nonprofit businesses and social enterprises, as well as venture capital funds, private equity funds, hedge funds, search funds, and other investment vehicles.
A faculty venture is any entity that is, or is expected to be, substantially controlled, owned, or managed by a faculty member. These entities include all for-profit and non-profit businesses and social enterprises, as well as venture capital funds, private equity funds, hedge funds, search funds, and other investment vehicles in which a faculty member has a material financial interest (e.g., greater than $10,000) or holds a position such as general partner, limited partner, or director.
A business relationship includes any type of leadership or formal non-academic advisory role, personal financial interest, or employment.
Part 1: Faculty Involvement in Student Ventures
Business relationships between faculty members and currently enrolled students or their ventures are prohibited until the student is no longer enrolled at HBS or the faculty member is no longer employed by HBS.5 Accordingly, as long as a student is currently enrolled at HBS, a faculty member may not:
Acquire or hold a financial interest in a student venture. Financial interests include all forms of debt, equity, and option securities.
Serve in any paid or unpaid position other than as an academic advisor. For example, the following positions are prohibited: a member of the Board of Directors or Board of Advisors, an employee, or a consultant. Faculty members can provide referrals to investors, firms, individuals, or other organizations as long as the referral does not represent a conflict of interest or result in personal financial gain. Faculty members serving in any advisory capacity are required to disclose potential conflicts of interest.
Discuss or agree to take a position with or to acquire a financial interest in a student venture at some point in the future.
Part 2: Student Involvement in Faculty Ventures
The same principles and concerns that apply to student ventures also apply to faculty ventures, and are governed by a similar policy: Student involvement in faculty ventures is prohibited until the student is no longer enrolled at HBS or the faculty member is no longer employed by HBS. HBS faculty members should not, directly or through an outside entity under their substantial control, ownership, or management, employ or enter into business relationships with a currently enrolled student. Accordingly, faculty members should not ask or allow a currently enrolled student to:
Acquire or hold a financial interest in their ventures. Financial interests include all forms of debt, equity, and option securities.
Except as noted in #4 below, serve in any position, whether paid or unpaid, in a faculty member’s venture. For example, the following positions are prohibited: a member of the Board of Advisors or Board of Directors, an employee, or a consultant.
Except as noted in #4 below, discuss or agree to take a position with or to acquire a financial interest in a faculty member’s venture at some point in the future.
A student may enter into an agreement for a summer job or full-time employment with a faculty member’s venture only if the faculty member has recused himself or herself from the recruiting process and the hiring decision.
Note that these restrictions do not apply to the practice of hiring students for non-graded academic duties such as being a teaching assistant or a research assistant.6
This policy applies to all currently enrolled students and all HBS faculty members, regardless of whether there is a current teaching or advisory relationship between a particular student and a particular HBS faculty member. Although restricted from business relationships with students, all HBS faculty members can and should advise currently enrolled students on their ventures, as well as on other academic and career issues.
For students who withdraw from an HBS degree program prior to graduating, the policy applies for one full year after the formal withdrawal date. This one-year waiting period does not apply to executive education participants who have formally withdrawn from their programs.
A faculty member’s involvement with ventures associated with alumni (students who have graduated from HBS) is governed by the School’s Policy on Outside Activities. All faculty members are encouraged to carry out the appropriate due diligence on alumni ventures, as they would for any other venture, and to consider the impact such involvement will have on their commitments, obligations, and reputation as well as any potential impact on the School’s reputation.
A faculty member or student who is unsure about how to interpret this policy or how the policy applies to a particular situation should discuss the matter with the Dean or a Dean’s designate.
This policy is reviewed every 3–5 years.
- This policy was reviewed and approved by the faculty in October 2013. It should be read in conjunction with the School's Conflict of Interest Policy (which addresses the potential for conflict between a faculty member's primary interest in and obligation to HBS, and personal or financial involvement with outside organizations) and Policy on Outside Activities of the Faculty (which provides guiding principles for and limits on such involvement with outside organizations).back to text ↑
- Faculty appointments covered by this policy include teaching and research faculty members, visiting faculty members, Professors of Management Practice, Baker Foundation Professors, Entrepreneurs and Executives in Residence, Lecturers and Senior Lecturers, Adjunct Professors, and similar positions. All of these appointments are made for educational purposes, and thus are subject to this policy. Emeriti Professors without current appointments or assignments are excluded from this policy.back to text ↑
- The application of this policy to participants in longer modular programs such as OPM is challenging, as participants may spread out the completion of the program over multiple years, and many assume a key benefit of coming to HBS is access to faculty members who will help them implement what they are learning between modules. That said, the ratio of faculty members to participants is such that these opportunities necessarily can be available to only a small portion of participants, potentially creating real or perceived inequity. Unless they have received prior permission from the Dean, faculty members thus may not work with participants in these programs until they have received a certificate of completion.back to text ↑
- For students who are not enrolled in an HBS program, these policies apply only during the time the student is registered for a course taught by an HBS faculty member. Ideally, faculty members should not enter business relationships with a cross-registered student from Harvard University or from any other university until after the student has graduated from his or her home institution.back to text ↑
- A faculty member who has a business relationship with an executive education participant that began before the participant applied to HBS is allowed to continue that relationship. A faculty member who has a business relationship with a student that began before the student applied to HBS should either eliminate the relationship (e.g., move from a board of directors to an advisory board) or, to the extent possible, encourage the student to take her or his course with or be supervised and graded by a different instructor. Faculty members in either scenario should take care not to act in a way that might create real or perceived conflicts of interest—for example, the faculty member should ensure that all participants or students have equal access to learning opportunities, class discussions, and faculty time.back to text ↑
- Beyond business relationships, there are situations where faculty members wish to allow students to conduct independent projects in entities under their substantial control, ownership, or management. Although such projects are permissible, the faculty member may not personally supervise and/or grade such projects; the students must find another "non-conflicted" faculty member to serve as sponsor.back to text ↑