A section of the Companies Act 2006, which comes into force on October 1 2008, introduces a new directors' duty to avoid conflicts of interest. It requires a director to avoid a situation in which he has an interest—direct or indirect—that might conflict with his interests to the company. This duty is broad and can potentially catch a wide range of situations. There are certain exemptions from the duty.

In private companies, directors will be able to allow anything that gives rise to a conflict, if there is nothing in the articles of association that prevents them from doing so and provided the matter is agreed to without the conflicted director counting in the decision-making process.
Private companies that were incorporated before October 1 2008 must obtain shareholder consent, via a shareholder resolution, before the directors can authorise such a conflict.

Private companies incorporated on or after October 1 need not pass a shareholder resolution, but can amend their articles to remove any provisions that would prevent the directors from authorising conflicts.