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Can Directors vote or participate in any discussions on a matter where they have something to gain from the transaction?
Directors are expected to avoid or properly manage conflicts of interest as and when they arise. It is important that conflicted Directors not only exercise care to ensure that other interests do not influence their decision making to the detriment of the organisation but also that they are seen to be avoiding such situations. Directors with a personal interest in the outcome of a decision must disclose their conflict of interest and, usually remove themselves from the decision making process even if the decision is a “no brainer”
A matter in which a director is interested may be avoided by the company anytime within three months after the matter is disclosed to the shareholders unless it is proved that the matter involved is for fair value.
Failure to disclose can also open you up to a fine or an action from shareholders for breach of duty.
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