The first instance represents a conflict of interest. This is because the printing firm owned by the spouse of the board member got the contract in a noncompetitive process. Contrary to good corporate governance which dictates that only the best and most efficient option be taken, this firm got the contract under terms that are suspect and thus vague. The cost of the contract is also suspect because it costs 25000 dollars instead of 1000 dollars.
The second example does not constitute a conflict of interest. This is because all board members had the choice on whether or not to participate in the formation of the separate facility. As such this board member is under no obligation to participate in the formation of the separate facility. The formation of this separate facility is good corporate governance because it signifies the expansion of the existing corporation.
The third example does not constitute a conflict of interest. This is because the director used the appropriate official channels to apply for the job ad get the job. This is however not good corporate governance because thorough searches were not conducted for the next CEO. This means that there might have been a more qualified person who missed out on the opportunity.
The fourth example is not a conflict of interest because the CEO’s son had nothing to do with the solicitation. It is however not good governance because the relationship between the CEEO and his son might get in the way of their corporate relationship. The fifth example is a conflict of interest because the board gives the director leeway because of his relationship with the board. The sixth example is a conflict of interest because the chairman guaranteed the debt but the other members are turning their backs on him.
Hirschey, Mark, Kose John, and Anil K. Makhija.Corporate governance. Amsterdam: Elsevier JAI, 2004. Print.
Monks, Robert A. G., and Nell Minow.Corporate governance. 3rd ed. Malden, Mass.: Blackwell Pub., 2004. Print.