One of the three fiduciary duties of a nonprofit board member is that of loyalty (along with care and obedience). The idea behind this duty is that when seated, a board member must make decisions that are first and foremost in the best interest of the nonprofit. When a personal interest "competes" with the nonprofit's interest the board member is said to have a "conflict of interest".
My understanding about conflicts of interest is that these are relatively rare for board members and when they arise, a by-law or board policy (manual) generally instructs that the member must declare the conflict and recuse himself/herself from taking action (voting) on anything related to the conflict. More often than not, conflicts tend to be around the member's business relationship with the organization, are easily resolved and unlikely to lead to any type of crisis.
But what happens when every member is in a position of conflict, 24/7? Association board members, for example, come to the board table representing their indiviual organizations, viewing the nonprofit as a vehicle for furthering the interests of those individual nonprofits. Your thoughts and experience?