What principle must be upheld regarding board director conflict of interest?

The principle that must be upheld regarding board director conflicts of interest is that directors must disclose all conflicts of interest. Transparency is crucial in governance, particularly in the context of fiduciary responsibility. When board members disclose their conflicts, it allows for informed decision-making by the board and helps maintain the integrity of the board’s actions. This practice fosters trust among stakeholders and helps to prevent any potential harm that might arise from undisclosed conflicts, which could lead to favoritism or unethical decisions.

Proper disclosure ensures that other board members are aware of these conflicts and can take appropriate actions, such as recusing themselves from specific discussions or votes where the conflict exists. Upholding this principle is essential for maintaining good governance standards and protecting the interests of shareholders and other stakeholders involved.