![]() as any situation where a director may abuse or neglect his/her duties to act impartially and objectively, in order to obtain some kind of personal or business advantage. A conflict of interest is not necessarily a wrongdoing or breach of fiduciary duties in itself. Any company director, once or several times throughout his/her career, can find himself facing a conflict of interest. What is important in order to foster the good governance and reputation of any company is to be able to effectively identify, manage and mitigate any actual, potential or perceived conflicts of interest. impartially and in the company's best interest. Conflicts of interest may arise in situations where a director can be in a position to put his/her private interests (related, for instance, to family or to business elsewhere) ahead of those of the company. Conflicts of interest may arise in situations: of another company which is a relevant client, supplier, distributor, competitor of or has any other material relationship with the first company; major shareholder in the company with conflicting interests with the company; some kind of benefit from a third party who stands to benefit from the director's decision; position with a regulator that is preparing industry policy affecting the company; with any relevant advisor to the company such as an auditor, tax or legal advisor, consultancy firm or investment bank; while carrying out his/her duties, relative or close personal friend; or interest in a proposed transaction that he/she will be voting. should raise red flags in any company board, in other cases it may be difficult to assess whether a situation or behavior constitutes a conflict of interest. The question to ask is whether an unbiased third party could reasonably perceive that a director's actions are being compromised by his personal or other business affairs. of interest is well established in many jurisdictions, some of which have set forth strict guidelines for directors to abide by before a potential conflict of interest. In addition to being observant of any applicable laws and policies, company boards should be able to react in due time with efficient procedures and specific actions aimed at helping their members identify, avoid if/where possible, and manage conflicts of interest. These actions may include: Board and Staff: A Code of Conduct should require all directors to avoid, whenever possible, any actual, potential or perceived conflicts of interest; explain how to identify conflicts of interest very clearly and using examples; and set forth acquisitions. She represents Spanish and international clients doing business in Spain and abroad. Clients include companies in the medical, real estate and consumer goods areas. She has worked in Spain, the United States and Chile. Mestre Nicolau 19 2nd floor Barcelona, Spain 08021 +34.93.200.74.48 Fax 1961bcn.com |