Are You "Self-Dealing" Without Knowing It?
Download the 2026-2027 Conflict of Interest Policy & Disclosure Form.
Protect the Board. Validating Related-Party Transactions. Satisfy Fiduciary Duties.
The "Duty of Loyalty" Trap.
As a Founder or Director, you owe a strict Duty of Loyalty to your corporation. This means you cannot prioritize your personal financial interests over the Company.
But in the tight-knit startup ecosystem, conflicts are inevitable:
I. Hiring Family: You want to hire your spouse as a consultant.
II. Vendor Investing: You hold early equity in a SaaS tool the company wants to buy.
III. Advisory Seats: You sit on the board of a company that is "kind of" a competitor.
If you execute these transactions without a formal Conflict of Interest (COI) Protocol, you are committing Self-Dealing. This allows shareholders to sue you personally, void the contracts years later, and claw back your profits.
The Legal Attorney Conflict of Interest Policy is the governance shield used by mature Boards to immunize "Interested Director" transactions under Delaware General Corporation Law (DGCL) Section 144.
What You Get Inside the Master File:
The "Safe Harbor" Governance Protocol (Article III)
A step-by-step procedural framework for validating conflicted transactions. It defines the mechanics of Recusal (leaving the room), Market Checks (getting comparable quotes), and the Disinterested Majority Vote required to make a dirty deal clean in the eyes of the law.
The Annual Disclosure Questionnaire (Exhibit A)
The mandatory "Yes/No" survey that every Director and Officer must sign annually. It forces the disclosure of:
I. Outside Directorships: Identifying if a Board member is secretly advising a competitor.
II. Family Member Interests: Catching nepotism before it becomes a lawsuit.
III. Material Financial Interests: Defining exactly what percentage of ownership constitutes a conflict.
The "Corporate Opportunity" Waiver (Article II)
Legal language preventing Directors from "usurping" business opportunities that belong to the Company. It establishes the rule that you cannot take a deal for yourself unless the Company has formally rejected it first.
The AI & SPV Modernization (Article II)
Updated for 2026, this policy specifically addresses modern conflicts, such as holding "Side Fund" investments in vendors or utilizing Special Purpose Vehicles (SPVs) that interact with the Company's cap table.
Why Founders and Board Members Need This Specific Policy:
It Prevents "Voidable" Contracts
Under Delaware law, a contract between the Company and a Director is automatically voidable unless specific disclosure steps are taken. This policy forces those steps to happen, ensuring your contracts stick.
It Satisfies Auditor Requirements
When you reach Series B or go public, auditors will demand to see your "Related Party Transaction" logs. This policy generates the exact paper trail (Minutes & Questionnaires) they need to sign off on your financials.
It Professionalizes Your Board Meetings
Move beyond the "friends and family" stage. This document introduces the rigor of Recusal and Abstention, proving to institutional investors that you take governance seriously.
Disclose the Conflict. Immunize the Deal.
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Frequently Asked Questions
Does this stop me from hiring my brother?
No. It does not ban the transaction. It creates a legal process to approve it. If the Board determines your brother is the best candidate at a fair price—and you recuse yourself from the vote—you can hire him legally.
Who needs to sign this?
We recommend having all Directors (Board Members), Officers (C-Suite), and Key VPs with spending authority sign the Annual Questionnaire.
What happens if a Director lies on the form?
Article IV provides for disciplinary action, including removal from the Board and "Clawbacks" of any profits made from the undisclosed transaction. This protects the Company from rogue directors.
