Legal problems of managing conflict of interest in a situation when an employee of a legal entity competing with the company becomes a member of the board of directors of a company

The Russian legislation does not regulate the situation of conflict of interests when an employee of a legal entity competing with the company becomes a member of the board of directors of a company. The article examines the competition of legal norms: on the protection of the rights of a shareholder and on the protection of the company from unfair competition. A board member dependent on a competitor creates a conflict of interest situation. Information obtained by a member of the board of directors, voting on the instructions of a competing shareholder, may constitute a commercial secret of the company and could be interested to a competitor, therefore such a potential conflict of interest could lead to unfair competition. Based on the recommendatory norms of the Corporate Governance Code of the Bank of Russia, the Listing Rules of PJSC Moscow Exchange, the company's internal regulations in the field of corporate governance, joint stock companies were offered recommendations on how to interact with a competing shareholder and a board member dependent on a competitor.