This excerpt is based on the Management Level case study related to Flote, one of the worlds largest transport companies. The primary business is in shipping and managing the movement of shipping containers. Youve just received an email from the head of Flotes Public Relations Department, referencing a statement posted the previous day on a popular social media site:

I see that Flote has bought themselves the worlds largest container ship. That makes it even more difficult for us to tell how profitable the company really is. It is impossible to compare depreciation charges with the other shipping companies as it is. Now well have to trust Flote to estimate the useful life of a brand new class of ships that nobody has ever operated before. The information in the accounting policies note was never very useful as it was. The company states that depreciation is charged to the statement of profit or loss on a straight-line basis over assets useful lives. We are told that the useful lives of ships are generally 20 to 25 years. Which is it 20 or 25? What rate will be used for the new ship? One of Flotes closest competitors makes a similar statement but claims that its ships have lives of 20 to 30 years. Hasnt Flote ever heard of maintenance? I think that we should be concerned here because the directors are clearly more excited about having the largest and latest ships than about providing shareholders with value for money. They can justify anything they like because they produce the accounting numbers. However, have they forgotten that they cannot control the markets reaction?

Based on the excerpt above, elaborate on the meaning of conflict of interest in the context of the relationship between shareholders and controllers and describe the ethical issues found in the corporate governance of Flote.