Question

Please only provide feedback for this discussion:

One major conflict of interest for a board member is when the CEO of the company is on the board, in anyway, but especially as the chair of the board. This is a problem for the company and shareholders because the board determines the salary of the CEO. The board is also in place to make decisions that would be in the best interest of the company and the shareholders, not just for the CEO, who is more likely to be looking for a way to build the company in order to increase their own salary. This could be avoided by no allowing the CEO to sit on the board at all.

Another way that a board could act unethically is to buy up major shares in the company to keep a buyout from happening. Often the buyout is necessary for growth, but the board will act in a way to keep their jobs, salaries and benefits. It seems like this could be unavoidable, but shareholders should determine the amount of shares needed to accomplish a buy out.

LA 1.2

A conflict of interest is usually understood by all involved and can be found in rules or regulations set by a company, for example, it is a conflict of interest in the U.S. Government or Military to have a spouse in command of their spouse. Morale reasoning is individually based and can change depending on who has to evaluate the situation.

Answer 1

Answer:

Feedback - Conflict of interest for a board member is when the CEO of the company is on the board:

This is a real point of conflict and it further become adverse when we look that this is at the senior position in the organization. Human beings have highest soft corner for their personal interests. Upon arrival of favorable circumstances, the human beings have the inbuilt habit to explore for their personal benefits. So based on this principle, the rule of conflicts are made, so that a person at one position should not explore for his personal use.

CEO is the person who is selected by the team of board of directors. The role fo board of director is to select the right CEO for the organization, so that he can take the organization on the growth path and they can achieve the success for their business. The team of board of directors decides the salary/packages/benefits for the CEO for the work he does during the CEO role for the organization.

So a person who is CEO, he himself cannot be the member of board of director, because he cannot make instructions for him only and a person cannot be involved in making salary/package/benefits for himself. Thus this is a strong point of conflict of interest for this scenario.

The CEO can make the misuse of his role as board of director as well as the role of CEO and he can finds the best suitable activities which makes best profit for him or is of best interest for him. Thus it will not have major benefits for the organization, but high personal benefit for the CEO.

Feedback : Military to have spouse in command of souse: This is a point of conflict, that a spouse cannot give the proper order to spouse, as there is a emotional relationship between the spouse partners and they cannot let one of their partner to do the complex job or work, as it impacts them emotionally. One spouse partner will have soft corner for other. Thus in order to avoid this conflict of interest, the spouse should not be in the preview of influence of another spouse. The spouses can work together, but both cannot be in the structure of one manages the other or reporting structure or cannot have the power to support each others. They can be like a team member in the department.