Catherine E. Pugh (D) resigned as mayor of Baltimore amid fallout from the self-dealing scandal involving the University of Maryland Medical System board. (Charles Krupa/AP)

The University of Maryland Medical System announced Friday that it has adopted a conflict-of-interest policy, as required by state law, that bars board members from obtaining contracts with the system through sole-source procurement and prohibits the system from giving preference to board members.

The medical system has been engulfed by controversy since March, when the Baltimore Sun reported that some board members had made business deals, in some cases worth millions of dollars, with the system they oversaw.

Under the new policy, board members with potential conflicts of interest will be required to present them before the board’s governance committee, which will then hold a vote.

Lawmakers rushed this spring to pass legislation to overhaul the board, and Gov. Larry Hogan (R) signed it into law April 18. The statute requires the conflict-of-interest policy and dissolves the current board in stages.

Interim UMMS president and chief executive John Ashworth said in a statement that the policy is “another major step forward as we improve Board governance.”

Hogan spokesman Mike Ricci said the governor’s office “will thoroughly review the new policy” and will “follow up with UMMS if we have any questions or concerns.”

A conflict of interest is defined by the policy as “any interest that may affect, or may reasonably appear to affect, the judgment of any covered person in a manner that is adverse to the interest of UMMS.”

“Covered people” include UMMS board members, members of committees of the board and UMMS employees at the vice-president level or above, including at subsidiary hospitals.

The system, which comprises 13 hospitals, has 28,000 employees.

The policy does not include board members at the local hospitals, where at least two dozen members had contracts with the hospitals on whose boards they sat, in some cases worth hundreds of thousands of dollars, according to financial disclosures.

Multiple reviews of UMMS are underway, and there has been an exodus among its top leaders, including chief executive Robert Chrencik and board chair Stephen A. Burch. Catherine E. Pugh (D), who was paid $500,000 by UMMS for her Healthy Holly children’s book series, resigned from the board and stepped down as Baltimore mayor amid fallout from the scandal.