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You are required to draft a conflict of interest policy for a profit-oriented company. The provisions...

You are required to draft a conflict of interest policy for a profit-oriented company. The provisions in the policy should cover the board and management.

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Expert Solution

Conflict of interest policy between the management and the shareholders should be covering all such possible measures in order to resolve the conflict of interest between them. It would consist of following-

A.it would consist of all the objectives of the shareholders with the management will need to follow.

B. management should be trying to protect the interest of the shareholders always because they are acting as the agent.

C. there should be performance based incentives for the management in order to enhance their overall performance in the business.

D. Risk exposures should always be after proper analysis because this will expose the shareholders to a greater risk of insolvency.

E. Proper resolution plan in case of conflict of interest between the management on the shareholder should be properly followed.

F. Management should be made a participant in the ownership of the company through employee stock option scheme and then they would be trying to perform better because they will also have their interest synchronised with the company.

These are the measures I would look to adopt into the overall statement of conflict of interest policy.

jeff jeffy answered 2 years ago
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