3.7.3.4 Conflict-of-interest transactions

Section 144 of the Delaware GCL makes clear that transactions between the company and a director or a third party will not be voidable solely because they are entered into by a director, who has a conflict of interest, if any of three provisions applies: (1) the director's interest was disclosed and was authorised by disinterested board members in good faith, or (2) the director's interest was disclosed and approved by the shareholders, or (3) the contract is fair when authorised by the board or approved by shareholders. There is no reason why the conflicted director should not attend the debate in the board. Indeed, it is actually deemed better if he does.