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What is a Conflict of Interest?

Conflict of Interest

What is a conflict of interest? Conflict of interests among managers and members of boards of directors for their personal interests, desires, and aspirations, which they wish to protect, and achieve.

But by virtue of being managers of the company or members of the board of directors, some of these interest, desires, and aspirations may conflict with their work in the company, which requires them to be honest, sincere, and careful, by exerting effort and diligence in performing it.

What is a conflict of interest?

Interest conflict is the situations that may lead to a conflict of interest can be summarized in four areas:

1- Personal interests in the company’s operations and contracts

Interest conflict: These personals interests that exist in the operations and contracts of the company, maybe clear so that the director or member of the board of directors is present at the parties to the contract or the commercial process.

This presence is not supposed to be personally the first and second party in the same contract. Rather, the company for which he works interest as a manager or a member of its board of directors is one of the parties, and he is personally, or as the owner of a sole proprietorship, or a partner in a company, the other party interest to the contract.

Interest conflict: This takes place in cases of determining fixed and variable bonuses and allocations, signing the work contract, determining its duration and conditions, and obtaining loans from the company, Conflicts policy financial research interest employee public person professional policies exist arise situation organization disclosure relationship many occurs trust private official related must influence guidelines principles for work.

Likewise, interest conflict is in cases of commercial dealings with the company when the director or member of the board of directors has a sole proprietorship or a company that deals in commercial transactions with the company of which he is a director or a member of its board of directors.

Likewise, interest conflict when the director or member of the Board of Directors buys one of the company’s assets, or its goods and services commercially.

These cases may push him to give precedence to his personal interest or the interest of his own institution and to treat it with preferential terms and prices, interest conflict taking advantage of his position and his ability to do so.

This conflict of interest may be unclear or indirect, and this is in cases where the company in which the director or member of the board of directors works contracts with the relatives of this director or with a company in which this director or member has a large stake.

2- Personal interests in the investment opportunities that the company offers

Businesses, companies, or institutions, interest conflict come to them with investment opportunities by virtue of their conducting business interest, conflict interest the first to see these opportunities are the company’s managers and members of its board of directors.

In some cases, the company may wish to benefit from the commercial project offered to it; In some cases, interest conflict or conflicts it may be decided to reject it for various reasons, including its lack of economic viability, interest conflict the inability of the company to finance the project, or its inability to manage it.

But this becomes apparent only after presenting the opportunity to the company and its management, Conflicts interest policy financial research employee arises workplace decisions judgment definition also reviewers involved law term lawyer-client will conduct procedures often interest make integrity take compromise actual used real individuals ensure requirements for work.

Therefore, interest conflict of the director or member of the board of directors exploits the investment opportunities before offering the opportunity to the company – directly or indirectly – and transferring it to his personal account or the account of one of his family members is an option, interest conflict this misses the company the potential returns from it, and it is undoubtedly against the conflict interest of shareholders in general.

3- Company competition

Company competition is by doing business or participating in establishing companies that compete with the company in which the director or member of the board works, policy interest conflict or conflicts, or sitting on the boards of directors of competing companies.

Because in these cases, these competing companies participate in targeting the quality of customers and clients, qualified employees, policy financial interest conflict or conflicts investment opportunities, Conflicts interest policy financial research employee apply to learn commitment loyalty unbiased obligations appearance considerations bias number activities help discussed sponsored service legal best agencies clash duties self-activity way interest.

This means that the director or member of the board of directors may obtain a market share through the company in which he works by transferring some of its customers and clients to his own business, research interest conflict or transferring competent employees to his own work and depriving the company of their services, interest conflict or conflicts he exploits the investment opportunities of the company he works In which.

4- Getting benefits from a third party

Interest conflict or conflicts These benefits or gifts are provided to the director or member of the board of directors from a third party because of his being a director or a member of the company’s board of directors.

The purpose of this third party may be to facilitate his contract and dealings with the company, or that these gifts may in fact be bribes provided by the third party to the managers of the company for the purpose of favoring interest conflict him and signing commercial deals with him with facilities not available to others.

Interest conflict: The Bottom Line

Therefore, the director or a member of the board of directors, in this case, may outweigh the interest of the company by his individual interest, Conflicts policy financial research employee include duty perception reality experience increased managing impartial represent procurement property intellectual someone committed for work.

Although these cases are hypothetical cases, interest conflict or conflicts interests they are contained and occur, so they need systems that preserve the rights of shareholders and protect the assets of the company from the tampering of some Tampere’s, and at the same time, these systems do not prevent managers and members of the board of directors from benefiting in such cases whenever the controls that exist a balance between these interests conflicts without harming the interests of the company and the shareholders.

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