Legal Question in Business Law in Connecticut

A conflicts of interest policy aims to prevent the company's members, shareholders, board members, investors, officers, service providers, employees and/or contractors from engaging in activities that may conflict with the business of the company. This addresses a problem where, for example, such individuals may learn confidential information about the company's business and be tempted to setup their own business to complete with the company. Such policy also sets out procedures in the event a party has ethical conflicts. For example, an insurance adjuster who may need to examine a relative's insurance claim.

In addition, many times, such a policy also contains a clause about self dealings that individuals may have with the company. For example, a shareholder of a company could also be a supplier of the company. In such case, the shareholder may be interested to sell to the company at a high price and may have influence within the company to approve such a deal, even though it would not be in the company's and remainder of the shareholders' best interests. Typically self dealing clauses ask that such deals be examined by non-interested parties.

Feel free to contact my office if you have any additional questions.

Roman R. Fichman, Esq.

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Disclaimer: This posting has been written for educational purposes only and was not meant to be legal advice and should not be construed as legal advice. You should always consult an attorney admitted to practice in your jurisdiction for specific advice.