Soliciting your thoughts...

Here is a fictional situation, please give your thoughts ...

Situation:

During a BOD meeting, an agreement is made that 2 of the directors (director "A" & "B") will abstain from voting and remove themselves from the situation, since they both will be affected, and a personal interest exists for both. So to be fair, it is agreed that the final decision on the matter will be left to the remaining 3 BOD's. Both directors agree and the situation is tabled. This is all recorded in the minutes, and a short time later the meeting is adjurned.

A day or so passes, and director "A" has a meeting with a key person involving the matter that is to be decided upon by the 3 remaining BOD's. Director "A" then contacts the director "B" and asks that they join discussion.

(Keep in mind, that both have agreed to remove themselves from the situation since a personal conflict seems to exist).

The director "B" joins director "A" and the other party. It is not known who requested the meeting.

A statement is made by director "A" to director "B", that they have made a personal request of the other party to withdraw an offer that had been extended at an earlier date.

The director "B" indicates that they are not comfortable with the situation, and reference what was agreed upon in a meeting that had taken place. The director "B" indicates that they feel the other BOD's should be present involving the discussion since they will be making the final decision.

The director "A" says that all the other directors are at work, and can not be reached. Later it is learned by director "B", that infact only 2 of the other BOD's are actually away during the day at work, the 3rd director (director "C"), was infact home and available for contact. Director "B" hadn't been provided with contact numbers for all the BOD's up to this point, and was assuming director "A" knew this as matters of fact.

It should be noted here also, that director "B" was recently instated to the BOD.

Has director "A" done anythting wrong?

Has director "B" done anything wrong?

Should this meeting have taken place? Why? or Why Not?

Is the offer that was extended still valid?

If you were director "A", what would you have done or not have done?

If you were director "B", what would you have done or not have done?

And any other thoughts you might think of...

Thank for the time

Randy

Roger,

Thank you vere much for your thoughts, In reviewing each point you made there, I agree that both directors A & B should remove themselves from all discussions involving a matter such as this, since it appears to be just as you outlined, a conflict of interest.

While I was inputing the situation, I was thinking about how to respond myself to it. I too thought it wrong of Director A, it would appear that there was something more there, but without knowing "everything" surrounding this it's really hard to tell.

I would think that the others board members should have been notified of any such meetings to take place. Makes me wonder what the position of these directors would be in relationship to the BOD.
If they were officers then that could make it look even more suspicious, at least to me anyway.

Thanks again for your thoughts, it's interesting to see how something like this is thought about.
You have to really enjoy the internet for making things of this type available to run through.

Randy