A director has a conflict of interest if they:

A director has a conflict of interest if they have a beneficial financial interest in a transaction with the corporation because this situation directly affects their ability to act in the best interests of the corporation. When a director stands to gain financially from a decision or transaction, their motivations may not align with what is best for the organization and its members. This can create a situation where the director's personal interests could influence their judgment, potentially leading to decisions that are not in the best interest of the community or corporation they are supposed to serve.

Recognizing and managing conflicts of interest is crucial in maintaining transparency and integrity within an organization. Directors are typically required to disclose any potential conflicts and may abstain from participating in discussions or decisions related to those interests to prevent any undue influence over their decision-making processes. This maintains the trust of the members and upholds the fiduciary responsibilities expected of community association leaders.