Answer: By receiving written permission from the local company

## Explanation This question involves Standard IV(A): Loyalty to Employers, which requires members to protect their employers' interests and not disclose confidential information. As an independent board member of the local cement manufacturer, Badawi owes a duty of loyalty to that company. **Key Analysis:** 1. **Option A (Making full disclosure to both companies):** While disclosure is important, it alone is not sufficient to avoid a violation. Disclosure does not eliminate the duty of loyalty or the potential conflict of interest. 2. **Option B (Receiving written permission from the local company):** This is the correct approach. According to Standard IV(A), members may undertake independent practice that could result in conflicts of interest or competition with their employer only if they obtain written consent from all parties involved. Since Badawi serves as an independent board member, he needs permission from the local cement manufacturer before undertaking work for a potential competitor. 3. **Option C (Signing confidentiality agreements with both companies):** Confidentiality agreements are important but insufficient on their own. They don't address the fundamental conflict of interest or duty of loyalty issue. **Why Option B is Correct:** - Standard IV(A) specifically states that members must obtain permission from their employer before engaging in independent practice that may conflict with the employer's interests - As a board member, Badawi has fiduciary duties to the local company - Written permission provides documented evidence of consent and helps manage the conflict of interest - This approach aligns with the CFA Institute's guidance on managing conflicts of interest in professional relationships **Additional Considerations:** - Badawi should also consider whether the feasibility study might involve using confidential information from the local company - Even with permission, Badawi must maintain confidentiality of any proprietary information from the local company - The feasibility study should be conducted without compromising Badawi's duties to the local company

Author: LeetQuiz .