![]() unavoidable conflicts of interest. Business Culture: The company board must strive to create a climate and culture not only at board level but throughout the entire company that promotes trust, integrity, accountability, independence and professionalism. In addition, promoting a culture in which directors and staff are comfortable enough to openly discuss any conflicts they may have will also contribute to manage conflicts of interest more effectively. Continued Training and Development to Directors and Staff: We live in a very changing world where a certain approach for identifying and handling conflicts of interest may vary over time. Not only is it important to revise and update existing policies but to offer continued training to directors and staff to keep them well-informed of any such developments. Record Conflicts of Interest: A director facing a conflict of interest should be obligated to disclose any such situation immediately, rather than trying to handle the situation personally. Not only is it important to disclose the existence of a conflict of interest, be it to fellow directors or to another person or group created to that effect, but it is also advisable to update such records at least once a year, keeping track of any changes that may affect the concerned director. advisable to consult with a lawyer in order to better navigate and resolve any unclear or complex conflict of interest situation. conflict of interest requires a previous analysis of the conflict itself. When analyzing a conflict we must pay attention to its seriousness, directness and significance. We must analyze factors such as the importance of the particular decision or transaction affected by the conflict situation, the director's personal interest at play, and the extent to which the director is involved in the relevant decision or transaction. The dimension and interrelation of these elements will be the determining factors to select the best alternative to mitigate the conflict. Setting obligations at board level to disclose and record a conflict of interest will often not be enough to actually mitigate the effects of a conflict of interest. Recommended measures by governments and public institutes to help manage and mitigate conflicts of interest affecting public officials often include the so-called "Six R's." These can also be used to manage conflicts of interest in any company. for conflicts of interest that represent the lowest possible risk for a given transaction or situation, where disclosing and recording a conflict of interest can be enough to preserve transparency. transaction or situation only partially, restricting the involvement of the director in the decision-making process can be an option. Often times, restricting the involvement of a particular director in the voting of a transaction may be easier or more advisable than entirely removing that director. not advisable, for instance, in a small operation where all the expertise is needed or where removing a director is a third independent party for voting or overseeing the transaction and bringing objectiveness to the decision table can be an optimal alternative. considerable, and in cases where all other options would prove inadequate, removing a director with opposed personal interests to those of the company may be the only alternative to preserve the board's integrity and credibility and the company's reputation. continued conflict of interest that is likely to affect the company's reputation, for instance, where a director's external professional duties are a concern and can be perceived as barring him from acting impartially, then the best alternative may be to require that director to relinquish such external professional duties. the most extreme option and will be advisable in cases where there is a severe collision of interests and no other remedy can be effective. involving a director can not only discredit the director, but also damage the reputation of the company. Because directors are active members of their communities and may be involved or have connections with several organizations, it is imperative for companies to be adequately prepared to take action to effectively identify, manage and mitigate the effects of director's conflicts of interest. |