I have been talking a lot about conflict of interest lately. One thing that is very clear in my mind is that a board member cannot be selling anything to the organization where they sit on the board.
Some groups have procurement policies that suggest that as long as there are three bids and the board members company is the lowest, that it is ok to award the work to a board member. I would suggest that a suspicious stakeholder would not be surprised that the board member had the low quote because after all, they sit on the board and would be able to see the other bids.
Why waste the organizations time playing defense explaining to people that the bad member had no say in the decision, etc.? Make your policies easy to defend by making it clear that a board member cannot sell to the group and you won’t have any more conflict of interest questions.