Conflicts of Interest (Part Six - A Simple Framework)
Before every board meeting, every agenda item that could create a conflict, a director should ask:
Do I have a personal, financial, or relational interest in this matter?
Would a reasonable observer — seeing all the facts — question my objectivity?
Is this interest material enough to affect, or appear to affect, my judgment?
If the answer to any of these is yes: disclose. Let the board decide whether recusal is also warranted.
If the conflict is structural — recurring, pervasive, and irresolvable — then the harder question of continued service needs to be asked. Can the director continue in the role without breaching the attendant duties of their appointment?
And if the board itself is the problem — if disclosures are being buried, conflicts are being ignored, or the culture around the table makes honest governance impossible — then a director needs to weigh their personal integrity, and their personal liability, against their continued presence.
Sometimes the most important thing a director can do for a company is leave it.
Read our previous articles in this series:
