Confict of Interest 'Directors in a Limited company '

[willbee]

I hope this is the right forum for this thread. I am one of 10 directors in a company/co-op and 3 of the directors are trading the same product (fish)to the company's buyers also. These 3 directors are getting inside info. of all the companies activities. Up to now it wasn't a problem because there was enough of a market for everyone but now its creating conflict. Has anyone any experience of similar situations?

 

[ClubMan]

Is the co-op governed by official documents such as articles and memorandum of association or something like that? These might outline the rules on such alleged conflicts of interest? Or the CRO might have rules depending on how the organization is constituted?

 

[willbee]

Is the co-op governed by official documents such as articles and memorandum of association or something like that? These might outline the rules on such alleged conflicts of interest? Or the CRO might have rules depending on how the organization is constituted?

Yes, It is stated clearly in the memorandum of association that if any member is in competition with the company they should n't be allowed into it. But they were when the company (60 members) was set up, All was in good spirit. They were then elected as directors. This company is in a closely nit community where people dont want to fall out with each other, so the situation is delicate, but if they dont cease trading what are the options?

 

[ClubMan]

It may not be possible to deal delicately and at the same time effectively with such issues. From what you've posted it sounds like the option most likely to be taken right now is to just ignore it. But if this is not possible then the bullet will just have to be bitten - e.g. by asking them to stop competing with the co-op or to resign or something like that?

 

[willbee]

Thanks Clubman, You are absolutely spot on in your suggestions. That is what is being said in the whisperings, so now we shut up or put up.