January 30, 2021
Partner in Torys’ Calgary office Stephanie Stimpson has told Director Journal’s column Directors’ Dilemma that directors should ensure they’re declaring any potential conflict of interest earlier rather than later.
Stephanie’s comments come in the last edition of the column which asks the question: I may have a conflict of interest on one of my boards. Should I wait to raise it with the board chair until I am sure or should I discuss it with her now?”
Stephanie said there are several circumstances where a conflict of interest could arise and suggests that the best way to handle these circumstances is declaring them early and managing them appropriately from the outset.
“The clearest examples are where a director may benefit financially from a decision being made by the board or serves in a dual role with transacting parties,” Stephanie said.
“In certain situations, improper handling of board conflicts can result in challenges to a board’s decision-making and assertions of breach of fiduciary duties.
“Directors should err on the side of declaring conflicts early and managing them appropriately from the outset, as a board may find it difficult to cleanse a conflicted process or decision-making down the road.”
You can read the full column here.