NACD Library

Director FAQ: Avoiding Conflicts of Interest

Director FAQ: Avoiding Conflicts of Interest Cover
Publication Date: October 7, 2016
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In brief: Directors of all company types (public, private, and nonprofit) are bound by the fiduciary duty of loyalty to act in the best interests of the corporation and its shareholders. This means avoiding all business matters involving a party with which they are affiliated, whether the relationship is financial or personal. This memo provides guidance on what constitutes a conflict of interest, including information on related-party transactions and interlocking directorates.

This resource can help your board

  • Learn about how conflicts of interest may arise
  • Screen directors and officers for potential conflicts of interest
  • Develop a conflict of interest policy

Most relevant audiences: General counsel, directors serving multiple boards, directors engaged in related-party transactions