Should You Forgive a Board Member Who Failed to Disclose a Conflict of Interest?

This question was submitted by Aza B of Ontario

I am a new Board Member and I discovered that a Board Member did not disclose having a material interest (contracts being received from the Corporation) and has been on the board for more than 6 years.  

The rest of the board wants to forgive him and let him stay.  But s. 29 says he is disqualified.  I am a lone ranger.  What do I do now?  I am uncomfortable.