Chico's FAS (CHS) , the South Florida-based women's clothing retailer, may be about to find out if any conflicts arise from having a director who also has a vice chairman position at a competing firm.

On July 21 Bonnie Brooks, the non-executive vice chairwoman at Hudson Bay Co. (HBC) , which operates Saks Fifth Avenue and Lord & Taylor department stores, joined the board of Chico's over the objections of activist hedge fund Barington Capital. Barington argued that Chico's competes with Saks and Lord & Taylor and that her appointment represented a conflict of interest. Chico's says Hudson Bay is not a competitor. 

Brooks said last month that she would resign from Hudson Bay on Dec. 31. That will still leave about five months in which she will work for both companies.

Directors serving on multiple boards in the same industry can find themselves in a difficult position when competitive opportunities turn up, said Jon Lukomnik, executive director at the Investor Responsibility Research Center Institute in New York. A director on the board of two competitors or a director who has a strategic advisory role at another company is likely to identify prospects for both companies - raising questions about what he or she does with that information.

"If you are on the board of two competitors and find out a third competitor is for sale, what company do you bring that information to when you know they both would like to buy that business?" said Lukomnik. "What if you identify a new innovative fabric or a great designer, which company will you bring it to?"

Chico's has obtained third party analysis from business analytics firm Applied Predictive Technologies which assert that Hudson Bay retailers aren't competitively relevant to Chico's in terms of geographic proximity or demographic profile. Barington commissioned a study which found that not only did Saks Fifth Avenue and Lord & Taylor brands have similar and overlapping "product characteristics" and geographic locations but that Chico's had identified Saks as a direct competitor in securities filings between 2000 and 2009.

Thousands of directors serve on multiple corporate boards in the same sector, according to relationship mapping service BoardEx, a service of The Deal. More than 4,300 directors sit on two or more boards in the same sector and, of those, 630 people have three directorships in the same sector.

The champion board member may be John Albert Brussa, vice chairman of Calgary law firm Burnet, Duckworth & Palmer LLP, who sits on the boards of eight mostly Canadian oil and gas companies, according to BoardEx data. Brussa said he had no duty of loyalty issues because the companies he advises run different businesses in different geographical areas.

Individuals generally aren't permitted to sit on two obvious direct competitors because of concern that proprietary information could be made available to a rival, Lukomnik said.

"Someone on the board of GM couldn't sit on the board of Ford," Lukomnik said. "But the question is how competitive are you and does the company have rules to enable you to fix this."

Such rules include requiring directors on competing boards to recuse themselves from certain meetings or oversight duties and ensure that multiple directorships are clearly disclosed, Lukomnik said.

In fact, though, a director serving on multiple boards or one who is a director and non-executive vice chairman of another corporation who has identified a prospect, such as an acquisition possibility, really has only two options - bring that information to both boards or keep it to themselves, said Robert Jackson, a professor at Columbia Law School in New York.

Chico's said in a statement that it didn't believe the two companies were competitors and that if there was an "actual or perceived conflict" it would ask for a recusal but so far "there has not been one."