What does the duty to avoid conflicts of interest require directors to do?

The duty to avoid conflicts of interest requires directors to separate personal interests from company interests. This principle is fundamental in corporate governance, ensuring that directors make decisions based solely on the best interests of the company and its stakeholders, rather than allowing personal gains or relationships to influence their judgment.

When directors do not maintain this separation, they risk prioritizing their personal interests, which can lead to decisions that are not in the best interest of the company or its shareholders. By adhering to this duty, directors help to foster trust and integrity within the organization, contributing to more effective management and governance.

The other options do not accurately reflect the core responsibility associated with avoiding conflicts of interest. Changing projects frequently does not directly address conflicts of interest. Consulting publicly on decisions can ensure transparency, but it doesn’t specifically tackle personal versus company interests. Sharing all business interests with shareholders might be an aspect of transparency but does not inherently resolve issues of conflicting interests.