'Conflict of interest’ is the predominant theme in the public political debate. Contrary to what you might think, there are apparently no clear rules. Even eminent professors who should know as legal theorists and as expert practitioners only talk about common practice, and therefore not about a clear legal framework at all.

As a legal practitioner, I am rather concerned by the fact that there isn’t really any legal framework. Naturally, the government is also bound by the principles of good governance. A government should act independently and objectively. It must respect fair play and when it goes into battle, it must do so with an open mind. But these are fuzzy concepts without clear demarcation. The principles have not been incorporated into hard laws. They are often unwritten principles that must be applied in practice and can be tested, enforced and sanctioned by the courts.

That hard standard does exist, however, and I am confronted with it very often in practice, and together with me so is entrepreneurial Belgium. In particular, the entrepreneurs who conduct their business under a company and are also the director of that company. Clear rules are laid down in company law for when a director faces a conflict of interest. This conflict of interest can be both direct and indirect. It must be of a proprietary nature and could theoretically go against the interests of the company. It goes without saying that the legislator has defined the concept of a ‘conflict of interest’ very broadly for directors.

In 2020, the new company law code entered into force. The legislator had tinkered with the regulation regarding conflicts of interest. In the past, a director only had to declare that he had a conflict of interest, albeit supplemented with a special report. In 2019, the legislator tightened up the regulation considerably and imposed that directors must refrain from participating in decision-making. Societal and political opinion on how to deal with opposing interests has therefore clearly become stricter. This is also reflected in the sanctions. Violation leads to nullity of the decision taken and the directors can be held liable for their actions. It is therefore good to know how politicians assess the integrity of our entrepreneurial directors.

Are there any other links between politics and company law? Remarkably, yes. If the rules of company law fall short, then the rules that apply to our parliament should be looked at. I feel I am insufficiently equipped under constitutional law to judge whether the reverse can also apply. But I assume that many business executives will be of the opinion that politicians should abide by the same standards as entrepreneurs.

When I came home tired in the evening after a lot of pondering in preparation for this column, I happened to hear a football match commentary. They talked about this or that player not being allowed to participate in the match. Not because he’s been sent off after a red card or a suspension, not because he isn’t fit. Because he is a loan player. I am not a sports lawyer, but apparently in football, when the clubs that have a loan agreement with each other play against each other, it is common practice for the loan player to sit it out. The football world has clearly understood the maxim: “Justice must not only be done; it must also be seen to be done.” And allow me to sign off with a perhaps inappropriate quip. If even the football world has understood it, then there is no reason to believe that the rest of the world cannot understand it either.

The author is Jan Tuerlinckx, lawyer-partner, at Tuerlinckx Tax Lawyers