Under Section 166(4) of the Companies Act, 2013, a director of a company shall not be involved in a situation in which he may have a direct or indirect interest that conflicts with the interest of the company. This provision embodies which principle?

Section 166(4) codifies the common law duty to avoid conflict of interest, which is a fundamental fiduciary duty owed by directors to the company. It requires that a director shall not be involved in a situation in which he may have a direct or indirect interest that conflicts, or can possibly conflict, with the interest of the company. This duty has its roots in the equitable principles applicable to fiduciaries-a director must not place himself in a position where his personal interest may conflict with his duty to the company. The section also provides in clause (5) that a director shall not achieve or attempt to achieve any undue gain or advantage either to himself or to his relatives, partners, or associates, and if found guilty, shall be liable to pay the amount equal to that gain to the company.