Question

Pat is on the Board of Directors for Zony, a consumer electronics manufacturer. Pat has been an excellent board member by providing leadership and expertise to the Zony Board. Zamzung is a consumer electronics manufacturer and direct competitor to Zony. Zamzung believes Pat would be a good addition to their Board of Directors. Zamzung asks Pat to join the Board of Zamzung. Can Pat be on the Board of Directors of both Zony and Zamzung?

Answer 1

Answer: No. Pat cannot be on the Board of Directors of both Zony and Zamzung.

Step-by-step explanation:

No, Pat cannot be on the Board of Directors of both Zony and Zamzung. The Clayton Act prohibits this as Pat can have superior power and high control of the industry.

Pat can also face ethical issues such as internal tactics or sharing of information or conflict regarding decision making. Pat being on the Board of Directors of both Zony and Zamzung will lead to an unfair competition in the market as well.