Joseph Silk is a veteran money manager with Aakanksha, Inc., a hedge fund that caters to high net-worth individuals. His friend, Gribbin, recently incorporated a private business and invited Joseph to be on its board of directors. Gribbin's business is in the paper industry and does not directly or indirectly affect Aakanksha's client base. Joseph accepted the board membership with the understanding that he would participate in Gribbin's business only over the weekends. He considered this a private venture and did not inform Aakanksha's Compliance officer. In not doing so, Joseph has

Explanation: While Gribbin's business is not in any competition with Aakanksha, Joe's position as a director creates an appearance of conflicts of interest since he will have a say in many decisions of the business, including investments in securities. Hence, before accepting any such position, Joe must discuss the situation with the compliance department at Aakanksha to evaluate the potential conflicts of interest. While Joe is not precluded from being on an outside Board, not getting this cleared with his current employer represents a violation of Standard VI (A) - Disclosure of Conflicts.