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One major conflict ofinterest for a board member is when the CEO of the company is onthe board, in anyway, but especially as the chair of the board.This is a problem for the company and shareholders because theboard determines the salary of the CEO. The board is also in placeto make decisions that would be in the best interest of the companyand the shareholders, not just for the CEO, who is more likely tobe looking for a way to build the company in order to increasetheir own salary. This could be avoided by no allowing the CEO tosit on the board at all.

Another way that aboard could act unethically is to buy up major shares in thecompany to keep a buyout from happening. Often the buyout isnecessary for growth, but the board will act in a way to keep theirjobs, salaries and benefits. It seems like this could beunavoidable, but shareholders should determine the amount of sharesneeded to accomplish a buy out.

LA 1.2

A conflict of interestis usually understood by all involved and can be found in rules orregulations set by a company, for example, it is a conflict ofinterest in the U.S. Government or Military to have a spouse incommand of their spouse. Morale reasoning is individually based andcan change depending on who has to evaluate the situation.