I could imagine some slippier cases. A lot of successful startup executives have a bunch of money and invest it in startups. They (of course) pick ones that they think will do a good job in their space. It isn't that crazy to imagine them recommending using a startup they've invested in, and it's also possible to imagine them making a convincing case to a board that the startup is the best option available.
They still can profit massively from that, though, so it's still kind of messy territory.
That's not a grey area at all. If you are a director and you are pushing your board to drive business to a company you have a significant stake in, you MUST disclose that.
A grey area would be more like whether you should offer to leave the meeting while they discuss the proposal.
Yep, I agree. I was responding to the comment from ghaff that they "can't imagine any BoD would be cool" with a deal getting signed in a clear conflict of interest. I can imagine a board going along with it.
Of course, the conflict definitely needs to be disclosed!
Oh I agree. I was really talking about the kickback case as in here. There are other types of conflicts which happen and may be fine so long as the person in question isn't making the decision on their own and, as you say, has disclosed it.
I don't really disagree. Just because there's a potential conflict of interest doesn't mean there's corruption. And the further you get from large companies with internal audit teams and established procurement practices the fewer controls there are the murkier things can get.
Per the peer comment, if you don't disclose the conflict, and let the BoD decide what to do in light of that conflict, then you're into the realm of looking like you're hiding something.
It's the principal/agent problem. If the director is an agent of the shareholders then conflict of interest IS corruption unless you have some sort of safeguard to stop it affecting your behaviour.
They still can profit massively from that, though, so it's still kind of messy territory.