Managing Conflicts of Interest: The Role of the Board of Directors in Public Company Governance

Conflict of interest arises when a director has a personal or financial interest that may influence their decision-making as a member of the board. Examples of conflicts of interest include a director being a significant shareholder in a competing company or having a close relationship with a member of management. Such conflicts can impact a director's ability to make unbiased decisions in the best interests of the shareholders.

It is important to note that not all conflicts of interest are actual conflicts and can be managed through disclosure and oversight. A director who owns shares of the company they serve on the board of may not be a conflict of interest if the shares are not significant or if the director has no control over the company.