Which of the following would be an example of self-dealing?

Self-dealing occurs when a director or officer of a company enters into a transaction that benefits themselves at the expense of the company. This is particularly prevalent in situations where the director has the authority to make decisions that could benefit their own interests rather than those of the shareholders or the company as a whole.

When a director enters a contract with the company they lead, this can represent a clear example of self-dealing. In this scenario, the director stands to gain personally from the transaction—as they are in a position to influence the terms that may favor their own interests. This situation raises concerns about conflicts of interest and the potential for abuse of power in decision-making processes because the director’s personal gain could override the company's best interests.

In contrast, while the other options may involve conflicts of interest or competition, they do not fit the classic definition of self-dealing as closely. Competing with the company could be detrimental but does not involve the misuse of the director's position in a direct transaction. Selling personal assets to the company and investing in an external business can involve complex motivations and may not strictly fall into self-dealing without additional context, such as whether the terms were fair and if the director's interests were improperly prioritized.