Directors’ dilemma: chairman’s conflict of interest

In this case study, David is a long-standing expert in the airline business. He has been non-executive chairman of a large listed low-cost airline, RA plc, for 16 years.

A recent Sunday newspaper has revealed that David’s own multi-million dollar investment company, which he co-founded some years ago, is a bidder for an airport that is up for sale. RA plc is the airport’s biggest customer and has, until recently, also been interested in buying the airport.

Is there a conflict of interest? How can it be resolved?