Question

conflict of interest is a common problem that corporations have to deal with. discuss the disciplinary mechanisms used to dispel the concerns of shareholders.

Answer 1

Conflict of interest can be considered as a serious problem for the firm because here there is a problem of loyalty. Which means the shareholders are the owners of the firm and they may have conflict in their choice or interest. It is nothing but he may have to commitments or more than one interest so he is not able to make a choice that whichever he would chose. This is a serious issue that he needs to decide his priorities that the firm needs their contribution entirely and firm dont want to lose their full effort and energy. If their contribution conflicted or partial then there will not sufficient value for that contributions.

For avoiding this situation there should be proper code of conduct and ethical and moral values ensured. By giving proper workspace and motivated feel in the firm will also helps to avoid these kind of situation. The agency problems should be avoided and proper communication will ensure more transperancy and reliabilty towards the business. So there should be proper communication, transparency in data ,accountabilitt