CSSA Best Practice Guide - Conflicts of Interest
Conflicts of interest occur frequently in the boardroom, and need to be appropriately managed, to ensure compliance with various legislative, governance and compliance requirements companies are subject to. The creation of an ethical culture within companies is paramount to its long-term success.
Ethical culture is also required to ensure that conflicts of interest are addressed and handled appropriately, and do not lead to unethical behaviour and corruption. Where companies allow conflicts of interest to exist without following proper procedures, the reputation of the company will be adversely affected. Company secretaries, as the trusted advisors in the boardroom, need to ensure that the board is aware of process and legal requirements by which conflicts of interest should be managed. Given the role of the company secretary as trusted advisor to the Board, this will require company secretaries to be resolute in ensuring compliance with these legal and common law principles, especially where they are aware of non-compliance. Where company secretaries take a back seat and remain silent, they will inevitably be seen as complicit to such behaviour.
This guide mainly deals with conflicts of interest of a personal financial nature. This guide aims to assist company secretaries to understand conflicts of interest and the processes that need to be adhered to when such conflicts arise. We trust that the use of practical examples will assist in better understanding the theory behind managing conflicts of interest.
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