The board must establish and disseminate to its members and management, policies and procedures for the identification, reporting, disclosure, prevention, or strict limitation of potential conflicts of interest. It is senior management's responsibility to implement these policies. Rules concerning connected party transactions and potential conflicts of interest may be dealt with in the Code of Conduct (see HC-2.2.4). In particular, the CBB requires that any decisions to enter into transactions, under which approved persons would have conflicts of interest that are material, should be formally and unanimously approved by the full board. Best practice would dictate that an approved person must:
(a) Not enter into competition with the licensee;
(b) Not demand or accept substantial gifts from the licensee for himself or connected persons;
(c) Not misuse the licensee's assets;
(d) Not use the licensee's privileged information or take advantage of business opportunities to which the licensee is entitled, for himself or his associates; and
(e) Absent himself from any discussions or decision-making that involves a subject where they are incapable of providing objective advice, or which involves a subject or a proposed transaction where a conflict of interest exists.