This is a duty of loyalty issue. When there is a board decision and a conflict of interest arises (like in this circumstance) a court would look at whether the transaction was fair to the company and shareholders to determine if there has been a breach of fiduciary duties. Generally, a board needs to make sure that the deal was both procedurally fair (voted on and approved by disinterested board members, special committees, etc...) and substantively fair (fair dealing, fair price). There is a ton of case law that fills in all the cracks as to what procedurally fair and substantively fair actually mean but that's a high level overview.