Addressing Corporate Conflicts in the Trump Era


Donald J. Trump, then the Republican presidential nominee, at the opening ceremony for his Trump International Hotel in Washington.

Stephen Crowley/The New York Times

Conflict-of-interest questions swirled around the Clinton Foundation last year. Today, the focus is on President Trump’s conflicts — his business interests, those of his family and those of his appointees.

The continuing coverage of possible Trump conflicts isn’t affecting just the electorate, ethicists and elected officials. It’s also heightening the sensitivity to conflicts among corporate governance stakeholders at all levels, including directors, shareholders, transaction partners, regulators and the courts.

This heightened sensitivity will probably apply to how boards identify, evaluate and manage conflicts. That same sensitivity may also extend to the interests of family members of directors and officers, and to the outside business interests of chief executives.

The drumbeat of conflict-related headlines offers a road map of sorts to the issues and relationships that raise concerns. These include questions on individual intent, due diligence on personal interests, full and timely disclosure of personal interests, detailed review of disclosures by independent directors, careful management of approved conflict-implicated transactions and the relationship of perceived conflicts to individual and organizational reputation.

There can be challenges in disclosing interests in hybrid investments, as well as in the divestment of assets prompted by conflicts. Questions are also being raised concerning the duties and loyalties of corporate ethics advisers.

The risk is that corporate boards will become unintentionally swept up in the frenzy over conflicts. The personal business interests of corporate directors could be subjected to the same…

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