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There's only one member of SolarCity Corp.'s board without ties to Tesla Motors.
A few directors are related by blood, others are linked through longstanding personal and professional relationships and some have significant investments in both companies.
As the solar company's eight-member board evaluates Tesla's proposed $2.86 billion acquisition, these connections may create potential conflicts of interest, according to analysts and experts in governance issues.
These links mean it will be difficult for the board to evaluate the offer in an impartial manner, said Patrick Jobin, an analyst at Credit Suisse Group.
"Any special committee they put together is going to have issues with ties to the other side," Jobin said in an interview Friday. "Even the ones that recused themselves have the ability to influence the outcome."
SolarCity is working with outside counsel to establish a process for a special board committee to review the offer, Jonathan Bass, a spokesman for the San Mateo, California-based company said in an email.
Starting at the top, Tesla Chief Executive Officer Elon Musk is also SolarCity's chairman and the biggest shareholder in both with stakes exceeding 20 percent. He has recused himself.
So has SolarCity CEO Lyndon Rive, Musk's cousin and the solar company's eighth-biggest investor. His brother Peter Rive, SolarCity's chief technology officer and No. 9 shareholder, has not recused himself. Bass didn't respond to questions about other directors who may also decline to participate in a vote.
Antonio Gracias is on both companies' boards. He's CEO of the Chicago-based private equity company Valor Equity Management, an early backer of Tesla and SolarCity, and also has recused himself.
"The conflict is very ripe," said Steven Davidoff Solomon, a professor at the University of California at Berkeley's School of Law. "Elon Musk is entering into a transaction where he's going to make hundreds of millions of dollars. The market isn't happy about it. And they're not playing by the usual conflict playbook. That's a triple strike against them."
Investors have already voiced dissent over the deal, and the governance issues raised by the proposal. Tesla shares slumped 10 percent June 22, the day after it was announced, and SolarCity is trading below the offer price of $26.50 to $28.50 a share.
SolarCity's board has a corporate governance committee, responsible for "reviewing actual and potential conflicts of interest of board members and corporate officers," according to its charter. It comprises three independent directors, who don't have positions with the company. They do have Tesla connections.
J.B. Straubel co-founded Tesla and is the electric car company's CTO. Nancy Pfund, a managing partner at the venture capital company DBL Investors, was an early backer of both Tesla and SolarCity and served on Tesla's board.
John Fisher is a managing director of Draper Fisher Jurvetson, which also provided early financing to both companies. His longtime partner Stephen Jurvetson sits on Tesla's board.
The last SolarCity director is Donald Kendall Jr., a venture capitalist who backed the solar company and joined its board in 2012. He's on the audit committee.
"Any overlap of independent committees charged with reviewing the transaction would be a very significant concern," said Ken Bertsch, executive director of the Council of Institutional Investors, a Washington-based non-profit group that advocates for shareholders' rights.
The potential conflicts will weigh on shareholders, said Angelo Zino, an analyst at S&P Global Market Intelligence.
"The corporate governance concerns, and SolarCity's well-documented financial position, will be at the forefront when investors vote," Zino said. "That's assuming that the board of SolarCity approves the deal."