Which of the following signifies a conflict of interest that directors and officers should avoid?

Self-dealing without disclosure signifies a clear conflict of interest that directors and officers must avoid. In the context of community association management, self-dealing occurs when a board member or officer has a personal interest in a transaction or decision that benefits themselves financially, and they do not disclose this interest to the rest of the board or to the community. This lack of transparency undermines the trust that is essential in the management of a community and can lead to decisions that do not serve the best interests of the community as a whole.

When directors or officers engage in self-dealing without disclosing their interests, they may act in a manner that prioritizes their own financial gain over the well-being of the community. This behavior can lead to legal repercussions, damage to the community's reputation, and a breakdown in the members' relationship with the board. Hence, it is crucial for those in positions of authority within a community to practice full disclosure and to recuse themselves from decisions where they have a direct personal interest.

The other options, such as participating in community discussions, voting on the annual budget, or serving on various committees, typically do not inherently represent a conflict of interest. These activities are part of the normal responsibilities and duties of directors and officers, provided they