Which situation commonly creates a conflict of interest for a company director?
Correct answer: A. The director has a personal interest in a company contract
- A. The director has a personal interest in a company contract
- B. The director reads the company’s published annual report
- C. The director attends a properly convened board meeting
- D. The director receives an official meeting notice
Explanation
A conflict may arise when a director’s personal interest could influence judgment about a company transaction. Reading reports, attending meetings and receiving notices are normal duties or procedures and are not by themselves conflicts.
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About Company Law Basics
Company law covers incorporation, separate legal personality, limited liability, shares, the memorandum and articles of association, and the powers and duties of directors. It also includes shareholder meetings, resolutions, company records, audit, winding up and the differences between a registered company, partnership and sole proprietorship.
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