Managing conflicts of interest
If there is anything good to be said about recent corporate scandals and crises it is that corporate governance in many nations and corporations has improved. Driven by bad experience, regulations have been tightened through various national corporate governance codes, legislation and stock exchange controls.
One aspect of these stricter requirements deals with the correct and transparent way to handle conflicts of interest on the board.
Although often scandalized by the media, conflicts of interest are, per se, not criminal. They are even, in principle, desirable. For example, the Swiss Exchange Group requires that directors have the necessary networks in place to be of advantage to the shareholders. But networks themselves can be the source of a conflict of interest.
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