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Conflict of Interest Within a Company: How Can It Be Documented and Addressed Before a Dispute Escalates?

Introduction

A problem within a company may begin with a seemingly ordinary decision: entering into a contract with a new supplier, leasing a warehouse, or assigning a project to another company. But what if the supplier is owned by one of the partners? What if the contracting entity is affiliated with the company’s manager? Or what if the person participating in approving the transaction stands to gain a personal benefit from it?

This is where the issue of conflict of interest within a company arises. What may begin as an undisclosed business relationship can develop into a dispute between partners, a compensation claim, or a dispute over the validity of a contract, particularly when the interest has not been disclosed or the required regulatory approval has not been obtained before the transaction is completed.

The existence of a personal interest connected to a company decision does not automatically mean that a violation has occurred in every case. Certain transactions may be permitted after disclosure, obtaining the required authorization, and following the prescribed procedures. However, the risk arises when the interested person conceals their relationship with the contracting party, participates in decision-making despite a conflict that affects their independence, or exploits their position and company information for personal gain.

The Saudi Companies Law establishes clear provisions governing duties of care and loyalty, disclosure of direct and indirect interests, and the regulation of transactions that may give rise to conflicts of interest. The Ministry of Commerce has also made available guidance forms for disclosure and authorization in certain types of companies.

In this article, we explain the concept of conflict of interest, its most common forms within companies, how to document and disclose it, who has the authority to approve the relevant transaction, and what measures can help address the situation before it develops into a legal dispute.

First: What Is a Conflict of Interest Within a Company?

A conflict of interest occurs when an individual’s personal, financial, or business interests overlap with their duties toward the company in a way that may affect their impartiality or independence in decision-making, or lead them to prioritize their personal interests over those of the company.

A conflict may be direct, such as when a manager owns an entity seeking to enter into a contract with the company. It may also be indirect, such as when the contracting company is owned by one of the manager’s relatives or is controlled by the manager through another party.

A conflict of interest is not limited to managers or board members. It may also arise in relation to senior executives, employees, or others whose interests and relationships influence decisions or transactions involving the company, depending on the company’s nature and the applicable laws and regulations.

Practical Example

A construction company needs to enter into a contract with a supplier to provide building materials. The procurement manager recommends dealing with a particular establishment but does not disclose that they own a share in it.

If the manager participates in selecting the supplier, evaluating its offer, or approving the contract without disclosing their relationship, a conflict of interest may arise. This requires examining the procedures followed, whether disclosure and impartiality obligations were observed, and whether the transaction caused harm to the company.

Most importantly, a conflict of interest is not measured solely by whether a financial loss has occurred. A violation may arise from failure to disclose an interest or from bypassing the required procedures, even before any damage becomes apparent or its financial impact is discovered.

Second: What Is the Legal Basis for Regulating Conflicts of Interest in Saudi Arabia?

The Saudi Companies Law regulates this matter through provisions relating to company management and the duties of managers and board members.

1. Article 26: Duties of Care and Loyalty

Article 26 of the Saudi Companies Law requires a company manager or board member to comply with the duties of care and loyalty. These duties include:

Performing their responsibilities within the limits of their assigned authority.
Acting in the company’s interests and promoting its success.
Making decisions, or voting on them, independently.
Exercising reasonable care, attention, diligence, and skill.
Avoiding conflicts of interest.
Disclosing any direct or indirect interest in business activities and contracts carried out on behalf of the company.
Not accepting any benefit from a third party connected to their role within the company.

This article makes clear that disclosure is not merely a formal procedure. It is an essential part of management duties intended to protect the company’s interests and ensure independent decision-making.

2. Article 27: Conflicts of Interest, Competition, and Exploitation of Company Assets

Article 27 addresses specific forms of conflicts of interest. It provides that a company manager or board member may not have a direct or indirect interest in business activities or contracts carried out on behalf of the company, unless authorized by the partners, the general assembly, the shareholders, or a party delegated by them, as applicable.

The article also regulates the conduct of business activities that compete with the company’s business. It prohibits the exploitation of company assets, information, or investment opportunities presented to the manager or board member in their official capacity for direct or indirect personal gain.

The article also establishes legal consequences for violations of these provisions, including the company’s right to seek annulment of the contract and require the violating person to surrender any profit or benefit obtained, in the cases specified by the law, as well as to claim appropriate compensation in cases of unlawful competition.

3. Article 28: Management Liability

A conflict of interest may result in liability for a manager or board member if it involves a legal violation, error, negligence, or failure to perform their duties that causes damage.

Article 28 establishes management liability for compensating the company, partners, shareholders, or third parties for damage resulting from a violation of the law, the company’s articles of incorporation or bylaws, or from errors, negligence, or shortcomings in the performance of their duties.

Accordingly, concealing an interest or abusing one’s position should not be treated as a minor administrative disagreement if the facts have resulted in damage or a violation that warrants accountability.

Third: What Are the Most Common Forms of Conflicts of Interest Within Companies?

Conflicts of interest may arise in everyday business transactions that company owners may not notice until a dispute occurs. The most common examples include:

1. Contracting With a Company Owned by the Manager or One of the Partners

One of the clearest examples is when a company enters into a contract with an entity owned by its manager or a board member, or in which that person has a direct or indirect interest.

For example, a manager may be responsible for selecting suppliers and then direct the contract to their own establishment without disclosing their relationship or obtaining the required authorization.

The fact that the establishment offers reasonable prices is not enough to resolve the issue. Disclosure, approval, regulatory procedures, and the company’s interests must all be considered.

2. Dealing With Relatives or Related Parties

An indirect interest may arise when a company enters into a contract with an entity owned by one of the manager’s relatives, or with which the manager has a significant financial or business relationship.

In such cases, the nature of the relationship and its impact on the independence of the decision must be examined, as well as whether it falls within the circumstances requiring disclosure or authorization under the applicable laws and regulations.

3. Exploiting the Company’s Investment Opportunities

A manager may become aware of an investment opportunity because of their position or information obtained through their work, then take advantage of it personally instead of presenting it to the company or handling it in accordance with the applicable legal requirements.

For example, a company may receive an offer to acquire a commercial property suitable for its business. The manager may exploit the information available to them and negotiate to purchase the property personally in order to obtain a private benefit.

Article 27 prohibits the exploitation of investment opportunities presented to a manager in their official capacity, or presented to the company, for direct or indirect personal gain, subject to the applicable legal requirements.

4. Competing With the Company in a Way That Affects Its Interests

A manager may establish a business operating in the same field as the company, participate in a competing entity, or direct customers and business opportunities toward another venture that provides them with a personal benefit.

A distinction must be made between merely holding an investment that does not affect the company and participating in a competing business in violation of legal restrictions. The nature of the activity, the circumstances, and the applicable requirements and approvals must be considered.

5. Accepting Gifts or Benefits From Suppliers

A supplier or contractor may offer a gift, commission, or benefit to a company official in an attempt to influence a contracting decision, renew an agreement, or approve invoices.

Such practices may undermine independent decision-making and affect the integrity of the procurement process. They may also conflict with the duty not to accept benefits connected to one’s management role, as established under Article 26.

6. The Interested Person Participating in the Vote on a Transaction

A manager may disclose their relationship with the contracting party but continue participating in evaluating the offer, voting on the decision, or influencing the approval process.

Disclosure alone does not mean that all procedures have been properly completed. The applicable authorization and approval rules must be followed, and the interested person must refrain from participating in cases where the laws and regulations require it.

For this reason, the company’s policy should clearly specify how to handle a person who has an interest in the matter under consideration, as well as the authority responsible for reviewing and approving the request.

Fourth: How Should a Conflict of Interest Be Properly Disclosed?

Disclosure is the essential first step in identifying a conflict before completing a transaction. It should be clear, specific, and documented rather than being limited to a verbal statement or incomplete information.

The disclosure process can be organized through the following steps:

1. Identify the Nature of the Interest

The person concerned should explain the type of interest connecting them to the transaction or contracting party, whether it is a direct financial interest, ownership in an entity, an indirect relationship, or a business connection that may affect their independent judgment.

It is important not to rely on a general statement such as “I have a relationship with the other party.” The nature of the relationship should be explained to the extent necessary to assess it.

2. Identify the Party Connected to the Transaction

The company should identify the name of the entity or individual with whom it intends to conduct business, the nature of their activities, their relationship with the person making the disclosure, and any related parties that may influence the decision.

3. Explain the Scope and Value of the Transaction

The disclosure should include a description of the transaction or contract, its estimated value, duration, nature of the obligations, beneficiary, and any important commercial terms that would help the authorized party assess the transaction.

4. Submit the Disclosure Before a Decision Is Made

Ideally, disclosure should take place before final negotiations begin, the transaction is approved, or the contract is signed. This allows the company to assess the interest and take the appropriate legal action.

The company should not wait until the relationship is discovered after the transaction has been completed, as delayed disclosure may make the violation more difficult to address and affect the position of the company and the parties concerned.

5. Update the Disclosure When Circumstances Change

If the ownership of the contracting entity changes, a new relationship emerges, or the nature of the interest changes, the disclosure should be updated and the situation reassessed as required by the applicable laws and company policy.

Fifth: How Should a Conflict of Interest Be Documented Within a Company?

Documentation turns disclosure from a simple statement into a record that can be reviewed when necessary or when a dispute arises.

It is preferable for the company to adopt a written conflict-of-interest disclosure form and maintain a central register of disclosed cases and the decisions made regarding them.

Each case file should ideally include the following:

1. Details of the Person Making the Disclosure

The person’s name, position, capacity within the company, and the department or entity in which they work.

2. Description of the Interest

Clarification of whether the interest is direct or indirect, and the nature of the relationship with the contracting party or beneficiary.

3. Details of the Related Party

The name of the entity or individual, the nature of their business, and the ownership or relationship details explaining the existence of the conflict.

4. Transaction Details

The type of contract or transaction, its value, duration, main terms, and commercial purpose.

5. Supporting Documents

These may include the commercial registration of the contracting entity, documents proving ownership or the relevant relationship, the commercial offer, price assessments, or any other documents that help evaluate the situation.

6. Action Taken

Specify whether the interested person refrained from participating in discussions or voting, and whether the request was referred to the board of managers, general assembly, or delegated authority.

7. Approval or Rejection Decision

The decision, its date, the authority that issued it, and the basis for approval should be retained, together with any conditions or restrictions associated with the authorization.

8. Monitoring the Transaction’s Implementation

Record whether the contract was signed, whether its terms were implemented, and whether any changes occurred that require updating the disclosure or reconsidering the approval.

It is important that minutes and records be accurate and stored in a way that allows them to be retrieved when needed, while maintaining the confidentiality of information and complying with applicable data protection requirements.

Sixth: Who Has the Authority to Approve a Transaction Involving a Conflict of Interest?

There is no single authority responsible for granting approval in all companies. The competent authority differs depending on the type of company, the position of the interested person, and the legal provisions and regulations applicable to the situation.

Article 27 of the Saudi Companies Law identifies the parties that may grant authorization, namely the partners, the general assembly, the shareholders, or a party delegated by them, as applicable.

The following provides a practical overview:

1. Limited Liability Companies

Addressing conflicts of interest in a limited liability company requires reviewing the provisions of the Companies Law, the articles of incorporation, and the powers assigned to the partners or the board of managers, if one exists. The authority empowered to grant authorization must be identified in accordance with the law and regulations.

The Ministry of Commerce provides forms for this type of company, including a conflict-of-interest disclosure form, a board of managers authorization form, and a general assembly authorization form.

These forms help organize and document the procedure, while it remains necessary to verify that the conditions for their use apply to the specific case.

2. Joint-Stock Companies

Transactions involving the personal interests of board members are subject to the provisions of the Companies Law. Listed joint-stock companies are also subject to additional requirements under the Corporate Governance Regulations issued by the Capital Market Authority.

These requirements include establishing clear procedures for disclosing conflicts of interest, obtaining the necessary approvals, and refraining from voting when an interest exists, in accordance with the provisions applicable to the type of transaction and company.

3. Companies Listed on the Financial Market

Listed companies are subject to more detailed corporate governance and disclosure requirements concerning transactions with related parties.

The Corporate Governance Regulations contain a dedicated section on conflicts of interest and related-party transactions. They also require companies to establish a written policy explaining the procedures for disclosing and addressing actual or potential conflicts.

General internal procedures alone are not sufficient when a company is subject to additional requirements imposed by the Capital Market Authority or the Saudi Exchange.

Seventh: What Procedures Should Be Followed Before Approving a Transaction?

After receiving a disclosure, the company should not proceed directly to signing the contract. Instead, it should examine the situation, determine whether the transaction can be approved, and identify the procedures needed to protect the company’s interests.

This process can be organized into the following stages:

1. Review the Disclosure

The competent authority verifies that the information is complete, examines the nature of the interest and its connection to the transaction, and determines whether there are any additional relationships that have not been disclosed.

2. Assess the Company’s Commercial Interest

The company should assess its need for the transaction, the suitability of the price and terms, compare the offer with alternative offers, and verify that the transaction serves a genuine commercial interest.

3. Evaluate the Impact of the Conflict

The company determines whether the interest may affect the concerned person’s impartiality or independent judgment, and whether that person should be excluded from discussions, voting, or negotiations.

4. Identify the Authority Empowered to Grant Authorization

The applicable laws, articles of incorporation or bylaws, and regulations should be reviewed to identify the authority empowered to approve the transaction, without assuming that a manager can authorize their own interest.

5. Document the Decision

The approval or rejection decision should be recorded in official minutes, explaining the nature of the interest, the measures taken to address it, the names of those participating in the decision, and any reservations or conditions.

6. Monitor the Implementation of the Contract

Oversight does not end once approval is granted. The company must ensure that the contract is implemented according to the approved terms and that prices or obligations are not changed in a way that harms the company’s interests or makes the approval inconsistent with the actual transaction.

Eighth: What Happens if a Conflict of Interest Is Not Disclosed?

Concealing an interest or bypassing authorization procedures may result in legal consequences that go beyond an internal administrative disagreement. Depending on the nature of the violation, several consequences may arise.

1. Seeking Annulment of the Contract

Paragraph 6 of Article 27 grants the company the right to seek annulment of the contract before the competent judicial authority if a manager or board member violates the provisions of the first paragraph concerning direct or indirect interests. The company may also require that person to surrender any profit or benefit obtained from the transaction.

This means that failure to disclose an interest or obtain the required authorization may open the door to legal proceedings concerning the validity of the contract and its consequences.

2. Claiming Profits or Benefits

If a manager or board member obtains a profit or benefit as a result of the non-compliant transaction, the company may seek to require that person to surrender what they gained in accordance with the statutory provision.

The assessment is not limited to direct losses suffered by the company. It may also extend to the benefit obtained by the individual as a result of the violation, in the cases specified by law.

3. Claiming Compensation

If the conduct causes damage to the company, partners, shareholders, or third parties, management liability may arise under Article 28 of the Companies Law.

A compensation claim requires examining the violation, the damage, the causal relationship between them, and identifying the person responsible in light of the circumstances of the case.

4. Accountability Under Other Laws and Regulations

Certain conduct may be subject to additional provisions if it involves prohibited practices or other violations, particularly in listed companies or transactions involving misleading information, misuse of information, or unlawful benefits.

For this reason, the incident should be assessed in light of all relevant laws and regulations, not the Companies Law alone.

Ninth: How Can a Company Address a Conflict of Interest Discovered After a Contract Has Been Signed?

A company may discover after completing a transaction that one of its managers or officials had an undisclosed interest, or that the approval granted did not satisfy the legal requirements.

In such cases, the company should not ignore the incident or rely solely on a verbal warning. Instead, it should follow clear steps to address its consequences.

1. Suspend Any New Action That May Increase the Harm

If continuing the transaction may lead to additional losses or worsen the violation, the company should assess whether the relevant procedures or decisions can be suspended, subject to the contract, the applicable powers, and legal provisions.

This does not mean that the contract is automatically cancelled. The legal consequences of suspension or termination must be carefully examined to avoid creating additional obligations for the company.

2. Preserve Evidence and Documents

The company should retain the contract, offers, correspondence, meeting minutes, disclosure documents, decisions, and any information explaining the relationship between the individual and the contracting party.

Company records should also be preserved without alteration or destruction so that the incident can be reviewed reliably.

3. Conduct an Independent Review

It is preferable for the transaction to be reviewed by individuals who have no interest in the matter under examination. Depending on the circumstances, the company may need to engage an independent legal adviser or accountant.

The review should cover:

How the contracting party was selected.
Whether the relationship was disclosed.
Which authority approved the transaction.
Whether the applicable powers were respected.
Whether the prices and terms were fair.
The benefits obtained by the parties.
Any damage suffered by the company, if applicable.

4. Determine the Corrective Measures

After the review results are available, the company should determine the appropriate action. This may include reassessing the transaction, obtaining legal authorization if permitted, amending internal procedures, or seeking to terminate or annul the transaction based on the available legal grounds.

Subsequent approval should not be treated as an automatic remedy for every previous violation. The possibility of correction and its consistency with statutory provisions and the rights of the parties must be examined.

5. Determine Responsibilities

If it is established that an individual within the company concealed an interest, exceeded their authority, or caused damage, their responsibility should be determined based on their actual role and the available evidence. Appropriate measures should be taken without making unsupported accusations against individuals whose responsibility has not been established.

6. Update the Company’s Policy

If the incident reveals weaknesses in disclosure or oversight procedures, the company should amend its internal policy and establish a clear mechanism for reporting, reviewing, and approving conflicts of interest to prevent similar problems from recurring.

Tenth: How Can a Company Establish an Effective Conflict-of-Interest Policy?

Having a written policy helps transform the handling of conflicts of interest from individual judgment into clear institutional procedures.

For listed companies, the Corporate Governance Regulations include requirements concerning a written policy for addressing actual or potential conflicts of interest.

Other companies may also benefit from applying appropriate corporate governance principles according to the nature and size of their business, while taking into account the legal requirements applicable to each company type.

The most important elements that the policy should include are:

1. Identify the Individuals Covered

The policy should specify the categories of individuals required to disclose their interests, such as managers, board members, senior executives, and employees whose decisions may be affected by transactions with external parties, according to the scope of the policy and applicable laws.

2. Establish Clear Definitions and Examples

The policy should explain the meaning of direct and indirect interests, related parties, investment opportunities, and competing activities, with examples relevant to the company’s business.

3. Adopt a Standardized Disclosure Form

A standardized form helps collect the required information, reduce incomplete disclosures, and make it easier to review and compare cases.

4. Identify the Authority Responsible for Reviewing Disclosures

The policy should specify who receives the disclosure, who reviews it, and who has the authority to approve or reject it, while respecting the powers established by law.

5. Regulate Abstention From Participation

The policy should specify how an interested person is excluded from discussions, voting, and negotiations when required by law or by the circumstances of the case.

6. Maintain a Register of Conflicts of Interest

A register should be established to record disclosures, decisions, authorizations, and corrective measures, and it should be updated regularly.

7. Establish Procedures for Violations

The policy should explain how to handle failure to disclose, submission of inaccurate information, or violation of authorization conditions, in accordance with applicable laws and regulations.

8. Train Managers and Employees

Having a written policy is not enough without raising employees’ awareness of it. Everyone should understand when disclosure is required, to whom it should be submitted, and what actions should be avoided before approval is obtained.

Eleventh: What Is the Role of Partners in Identifying Conflicts of Interest Before a Dispute Escalates?

Protecting the company is not the responsibility of the manager or board alone. Partners and shareholders can also contribute to monitoring transactions that may affect the company’s interests.

The following measures can help:

Reviewing financial reports and transactions with related parties.
Requesting information about significant transactions in accordance with their statutory rights.
Ensuring that interests connected to managers and board members have been disclosed.
Reviewing meeting minutes and approval decisions in accordance with their legal powers and rights.
Requesting clarification about why a supplier or contractor connected to an official was selected.
Engaging specialists when there are indications of an unfair or undocumented transaction.
Using the company’s internal mechanisms to address violations before disagreements escalate.

It is important that such reviews be conducted through lawful means, while maintaining the confidentiality of information and avoiding the use of inspection rights or document requests in a way that harms the company or exceeds the applicable rules.

Twelfth: Common Mistakes When Handling Conflicts of Interest

Some companies may handle conflicts of interest incorrectly, making the problem more complicated when it comes to light.

Common mistakes include:

1. Assuming That Verbal Disclosure Is Sufficient

Verbal disclosure does not provide the level of documentation required to establish the nature of the interest and the action taken by the company. The situation should therefore be documented in writing.

2. Obtaining Approval After Signing the Contract Without Legal Review

Subsequent approval may not be sufficient to remedy the violation. It is necessary to determine whether the corrective action is legally permissible.

3. Allowing the Interested Person to Participate in Voting

Allowing an interested person to influence the decision may undermine the independence of the approval process. Rules requiring abstention from participation should therefore be applied whenever necessary.

4. Treating Every Transaction With a Relative as an Automatic Violation

A family relationship alone does not determine the issue in every case. The nature of the relationship, the interest involved, the applicable legal requirements, and the impact on decision-making must all be examined.

5. Failing to Compare Prices With Other Offers

The absence of price comparisons may make it difficult to demonstrate that the transaction served the company’s interests, particularly when the other party is connected to one of the company’s officials.

6. Failing to Document Objections

If a board member objects to a decision involving a conflict of interest, it is important to record their position in the meeting minutes in accordance with the applicable legal provisions.

7. Ignoring the Need to Update Disclosures

The nature of an interest or the ownership of the contracting party may change after the initial disclosure. Information should therefore be updated whenever a material change occurs.

Thirteenth: A Practical Example of How to Address a Conflict of Interest

Suppose a trading company wishes to enter into a contract with an establishment specializing in logistics services. After reviewing the offers, the company finds that one establishment has submitted a financially and technically suitable proposal.

However, before the transaction is approved, one of the company’s management members discloses that they own a share in the establishment submitting the offer.

In this case, the transaction can be organized as follows:

Submit a written disclosure explaining the nature and percentage of the ownership and the relationship with the establishment.
Attach documents proving the relationship and ownership.
Refer the disclosure to the competent authority in accordance with the law and the company’s articles of incorporation.
Exclude the interested person from participating in the evaluation of the transaction or voting on it whenever required by the applicable provisions.
Review the offer and compare it with other offers to verify the fairness of its terms.
Identify the authority empowered to grant authorization and obtain its approval before completing the transaction.
Record the decision and the measures taken in official minutes.
Retain the case file and monitor the implementation of the contract according to the approved terms.

In this way, the transaction is not left to individual judgment, nor is the company deprived of a business opportunity merely because a relationship exists. Instead, the situation is assessed through legal procedures that protect the company’s interests and reduce the likelihood of disputes.

Frequently Asked Questions About Conflicts of Interest Within Companies

What Is a Conflict of Interest Within a Company?

It is the existence of a direct or indirect personal interest that may affect an individual’s independence when making a decision concerning the company, or lead them to prioritize their personal interests over those of the company.

Can a Manager Enter Into a Contract With a Company They Own?

Under Article 27 of the Companies Law, the general rule is that a manager or board member may not have a direct or indirect interest in business activities or contracts carried out on behalf of the company unless authorization is granted by the competent authority in accordance with the legal provisions. The law provides for specific exceptions, and their applicability must be verified.

Must a Conflict of Interest Be Disclosed Before Signing the Contract?

Yes. Disclosure should take place before the transaction is completed, and the required authorization or approval should be obtained according to the type of company and the nature of the transaction. This allows the competent authority to assess the interest and make the appropriate decision.

Is Disclosure Alone Sufficient to Permit the Transaction?

No. Disclosure identifies the existence of an interest, but it does not replace the required authorization or approval, nor does it exempt the parties from complying with the remaining legal requirements.

What Happens if a Manager Conceals Their Interest in a Transaction?

In the cases specified under Article 27, the company may have the right to seek annulment of the contract and require the manager to surrender any profit or benefit obtained. The manager may also become liable for compensation if the conditions set out in Article 28 are met.

Are Conflicts of Interest Limited to Board Members?

No. Corporate governance and internal oversight policies may also cover senior executives, employees, and others, depending on the nature of the company. However, the specific provisions of Article 27 of the Companies Law address managers and board members, while other applicable laws and regulations may cover additional categories.

Can a Conflict of Interest Be Addressed After It Is Discovered?

Corrective measures may be taken depending on the nature of the violation and the stage reached by the transaction. However, it should not be assumed that subsequent approval removes all previous consequences. The contract, disclosure, authorities, and potential damage must be examined before determining the appropriate action.

Can a Partner Object to a Transaction With a Related Party?

A partner may exercise their statutory rights and available oversight and objection mechanisms, depending on the type of company and the nature of the transaction. A liability claim or other legal action may also be considered if the relevant conditions are met.

Conclusion

A conflict of interest within a company does not become a risk merely because a personal or business relationship exists. Its seriousness depends on the nature of the interest, the extent to which it affects independent decision-making, compliance with disclosure requirements, obtaining the necessary approvals, and avoiding the misuse of one’s position or company information for personal gain.

For this reason, the best way to prevent disputes begins with establishing a clear policy, documenting direct and indirect interests, reviewing transactions with related parties, recording approval decisions and objections, and monitoring contracts in accordance with their approved terms.

The clearer and more effectively implemented the disclosure and governance procedures are, the better equipped the company will be to protect its assets and the rights of its partners, and to reduce disputes that may arise from decisions that were not properly reviewed at the appropriate time.

Suleiman Al-Omari Law Office

Lawyers and Legal and Sharia Consultants

The office provides legal advisory services to companies and partners, reviews articles of incorporation and internal regulations, organizes conflict-of-interest disclosure procedures, reviews transactions with related parties, and represents clients in commercial disputes and liability and compensation claims. These services help protect rights and interests in accordance with the laws and regulations in force in the Kingdom of Saudi Arabia.

Contact: +966537778130

This article is for informational purposes only and does not constitute a substitute for specialized legal advice.