What conflict-of-interest considerations should board members observe?

• A. Disclosures for financial interests only.
• B. Recusal from decisions affecting relatives or firms in which they have a stake.
• C. Adherence to ethics policies and gift restrictions.
• D. Disclosures for financial interests, recusal from decisions affecting relatives or firms in which they have a stake, adherence to ethics policies and gift restrictions.

Answer: (D)

Managing conflicts of interest means using three protections: disclosing any financial interests, recusing oneself from decisions where a relative or a firm with a stake could be affected, and adhering to ethics policies and gift restrictions. Disclosures make potential conflicts visible so the board and the public can assess risk. If a conflict exists, recusal prevents biased influence on the decision. Ethics policies and gift restrictions establish clear rules about acceptable behavior and what gifts or benefits can’t be accepted, reducing the chance that relationships or rewards sway judgment. Taken together, these practices cover disclosure, withdrawal when necessary, and behavioral standards, providing a complete approach to keeping board decisions fair and trustworthy. The other options miss one or more of these important elements, so they don’t fully address conflict-of-interest management.