9.2.5.1 Conflicts of interest

In the case of conflicts of interests, section 8: 23 SCA states that board members may not participate in decision-making about the following three types of agreements: ‘1. an agreement between the board member and the company; 2. an agreement between the company and a third party, where the board member in question has a material interest which may conflict with the interests of the company; or 3. an agreement between the company and a legal person which the board member is entitled to represent, whether alone or together with another person.’ The first type of agreement, made between the board member and the company, is equated with litigations and other legal proceedings. This section does not apply to board members who own – directly or indirectly – all the shares of the company. Furthermore, the third type of agreement does not apply to a board member if the legal person belongs to the same group or if the relationship is of the same nature. These prohibitions also apply to the managing director, according to section 8: 34 SCA. However, section 8: 34 SCA is only relevant if the managing director is not a member of the board of directors, because otherwise section 8: 23 SCA applies to the managing director.