Blackmail, extramarital affairs, compromising photos, national newspapers, billionaires, private investigators… Conflicts of interest? No, this isn’t the latest drama from the Beeb. Instead, say hello to the current world of multi-billionaire Amazon founder Jeff Bezos.
The Amazon founder is having his private life played out in the public eye, with intimate texts between himself and Lauren Sanchez, a TV presenter, being published in the National Enquirer. Meanwhile American Media Inc (AMI), owner of the National Enquirer, has become embroiled in a spat with Bezos and the Washington Post — bought by Bezos in 2013 — regarding Bezos’ investigation into the Enquirer’s source for the texts and whether AMI had used the Enquirer for politically motivated reasons.
Now, I know exactly what you’re thinking — is there not a conflict of interest if Bezos controls both Amazon and the Washington Post?
In the UK, directors of a company must avoid putting themselves in a position where their personal interests (including those of their family, close friends or businesses in which their close family own shares) appear to conflict with the interests of the company. If such a situation does arise, however, it is not necessarily fatal — directors can often obtain the approval of their fellow directors or shareholders to legitimise their actions.
For example, let’s pretend that Bezos was a director on the board of the Washington Post and the Post was a UK company. He would be required to let all of the other directors know about his interests in Amazon, given the potential for Amazon and the Post’s interests to be misaligned.
A UK director is also under a general duty to promote the success of the company for the benefit of all of its shareholders. If a board member of a newspaper insisted on a story about a personal scandal being quashed solely because it would not be in his personal interests, it’s unlikely that he or the other directors would be acting in the best interests of the newspaper.
It’s important to note that where a board of directors authorises a conflict of interest, they must ensure that, in doing so, they are not breaching their own directors’ duties. For example, they would need to exercise independent judgment and put the interests of the company over and above their own.
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This article was published on 20/02/2019 based on information as of that date. The material contained in this article is for general information purposes only and is not intended to provide legal advice.