This review list is being supplied to you in order to inform you about the document in question and to assist you in preparing it for submission. It is critical that you adhere to the formalities of corporate governance and ensure that any party that has a conflict of interest appropriately recuses himself or herself and that this is recorded in the corporate minutes on a formal and permanent basis. This safeguards the individual, the Board of Directors, and the company from certain unfavorable repercussions in the event of a shareholder litigation.
- Make numerous copies of the document. Keep a copy of this in the company’s minutes book.
Conflict Of Interest Disclosure
Conflict of Interest Disclosure
WHEREAS, I, _________________________, am a member of the Board of Directors of _________________________, and, WHEREAS, the Board of Directors of ________________________ will consider the following issue: _________________________, and, WHEREAS, I have a conflict of interest in that, _________________________, I herewith notify the board of such conflict, and recuse myself from the consideration and discussion of _________________________, and request that this disclosure be made a part of the records of the _________________________ Corporation.
Dated: ______________________
__________________________
_________________________Receipt of this instrument is acknowledged on ________________________:
__________________________
Corporate secretary of _________________________
Conflict of Interest Disclosure
Review List
This review list is provided to inform you about this document in question and assist you in its preparation. It is extremely important that you follow the niceties of corporate governance and make sure any party with a conflict of interest properly recuses him or herself and records it on the record in the corporate minutes. This protects the individual, the Board, and the Company from certain negative consequences in a shareholder lawsuit.
1. Make multiple copies. File one in the corporate minute book.
Frequently Asked Questions
What is a conflict of interest disclosure?
A conflict of interest disclosure is a formal document used by a member of a board of directors to notify the board of a conflict of interest. It states the nature of the conflict and the board matter involved. The individual also recuses themselves from the consideration and discussion of that matter and requests that the disclosure be made part of the corporate records.
When should a board member file a conflict of interest disclosure?
A board member should file a conflict of interest disclosure when they have a conflict of interest regarding an issue that the board of directors will consider. The disclosure should be made before the board takes up the matter. This allows the member to recuse themselves from the consideration and discussion of the issue.
What information must be included in a conflict of interest disclosure?
The disclosure must include the name of the board member, the name of the corporation, and the issue to be considered by the board. It must also describe the nature of the conflict of interest. The document includes a statement of recusal from the consideration and discussion of the issue and a request that the disclosure be made part of the corporate records.
How does a board member recuse themselves from a conflicted matter?
A board member recuses themselves by notifying the board of the conflict and stating that they will not participate in the consideration and discussion of the specific issue. This is done through a formal conflict of interest disclosure. The disclosure is then made part of the corporate records.
Why is it important to document a conflict of interest in corporate minutes?
Documenting a conflict of interest in corporate minutes is important because it follows the niceties of corporate governance. It ensures that any party with a conflict of interest properly recuses themselves and that the recusal is recorded on the record. This helps maintain transparency and proper corporate records.
Who acknowledges receipt of a conflict of interest disclosure?
The corporate secretary acknowledges receipt of the conflict of interest disclosure. The acknowledgment is made on a specified date. The corporate secretary signs the acknowledgment as part of the document.
What is the purpose of a conflict of interest disclosure review list?
The conflict of interest disclosure review list is provided to inform you about the document and assist in its preparation. It emphasizes the importance of following corporate governance and ensuring that any party with a conflict of interest properly recuses themselves. It also highlights the need to record the recusal in the corporate minutes.
Is a conflict of interest disclosure required for all board matters?
A conflict of interest disclosure is required when a board member has a conflict of interest in a specific issue that the board will consider. It is not required for all board matters, only those where a conflict exists. The disclosure is specific to the issue in question.
What happens after a conflict of interest disclosure is filed?
After a conflict of interest disclosure is filed, the board member recuses themselves from the consideration and discussion of the conflicted issue. The disclosure is made part of the records of the corporation. The corporate secretary acknowledges receipt of the instrument.
Can a conflict of interest disclosure be made orally?
The conflict of interest disclosure described in the article is a written instrument. It includes a dated signature and an acknowledgment of receipt by the corporate secretary. The article does not mention oral disclosures.
