Ethics Question inspired from Q8 p 291 Book 1

Contexte: Mr. X works is one of the partners of a fund. The fund is managed byt Mr. Y. The fund invests in mid-cap. Mr. X received an offer to join the board of a small cap company and the compensation package contains stock options. In the same time, the fund manager decided to change his strategy and start investing in small caps (this is not caused by the move of Mr X to a small cap).

Now, obviously there is a conflict of interest if Mr. X accepts the offer. He will be an insider in the small cap firm and possess stock options, and he will maintain his position a fund that invest in small caps.

What does Mr X need to do to be able to take the offer? Is getting a written consent from all parties sufficient?