Get rid of related party conflicts

While Sarbanes-Oxley does not strictly proscribe contracts with firms owned by directors, it is a bad idea. Many companies have worked to put an end to what seems like inside dealing (fair or not). As an example of how this can harm the company, consider the investment trust Feldman Mall Properties. It hired an accounting firm, Brandywine Financial Services, owned by one of its directors. A media firestorm soon erupted. The company said the firm offered the best deal, but the point seemed lost. PR and image damage is a real possibility in these situations, especially at a time when a stock is weakening anyway. In general, better not wave this particular red flag. Article