4. Avoiding Conflict Of Interest.
Under Companies Act 2006, it is a legal obligation for company Directors to avoid situations that can lead them into having direct or indirect interests that conflict with the interests of the company.
Examples of Conflict of Interest;
• The director should not be seen to also be a supplier or customer to the company
• The director should not take advisory or directorship positions with competitors
• The director should not loan out resources to other entities, even themselves to the detriment of the company
A director should not make personal profit from their position. Their job should be restricted to making decisions that impact positively to the company.
To avoid conflict of interest it is a duty of a director to make the board aware if there are any potential conflict of interests, or if they have interests in any transaction as this will help the other directors to ensure that in performing their duty the transaction does not just promote the interest of the director but rather the whole company.