A FTSE SMALL CAP Group Company Secretary and General Legal Counsel writes...
When addressing the issue of Director’s Conflicts of Interest – what is the scope of questioning?
- Family – how close/remote do you ask?
- Shares – assume it excludes shares in a listed plc but what other categorisations are looked on?
- Do you work off top 10/20 customers?
- Do you ask re consultant/employee /shareholding or other?
How frequently is an exercise undertaken to check on potential conflicts – is it a standing item for each Board meeting or just an annual/6 monthly review?
Is the exercise carried out by the Board or a Board Committee?
Is there any published guidance which you use?
The burden on disclosing conflicts of interest is on each of the directors in relation to the business due to be discussed and any other conflicts (such as a new director appointment) which may arise. This is discussed at the start of each Board meeting and is a standing agenda item.
A formal conflicts questionnaire is circulated on an annual basis to each of the directors for their sign off. We have developed this in recent years to include top customers/distributors/advisers in addition to understanding connected persons, shares etc.
The schedule is reviewed at the beginning of every board meeting after apologies and quorum. We do not apply de minimis criteria to potential conflicts – they either have potential or they dont. We dont have family shareholding issues.