Walt Disney Company, the second largest American broadcasting and entertainment company, failed to tell shareholders about business relationships between the company and its board members, American regulators said.

Disney didn’t disclose that it employed children of three board members and made “regular payments” to an airline owned by then vice-chairman Roy E. Disney, the Securities and Exchange Commission said yesterday in an order. The company agreed to stop violating securities laws and won’t pay a fine in the case, the agency said.

Shareholders need to know about relationships between a company and its directors to gauge any possible conflicts of interest, said the deputy director of the SEC’s enforcement unit, Linda Chatman Thomsen, in an interview.

“Is the board going to make the kind of independent judgments you expect as an investor, or are there reasons to be concerned?” Ms. Thomsen said.

A lawyer representing the company at Wilmer Cutler Pickering Hale and Dorr in Washington, William McLucas, wasn’t immediately available to comment, according to his assistant. A Disney spokeswoman, Zenia Mucha, declined to comment.

From 1999 through 2001, Disney employed children of board members Stanley Gold, Reveta Bowers, and Raymond Watson, the SEC said. The children, whom the SEC didn’t name, held “nonexecutive” jobs and were paid between $60,000 and more than $150,000 a year.

The company didn’t disclose the payments until August 2002, the SEC said. Mr. Gold, Ms. Bowers, and Mr. Watson left Disney’s board last year.

Disney also waited almost two years before telling shareholders that the wife of director John Bryson was being paid more than $1 million per year by a company half-owned by Disney, the SEC said. When Mr. Bryson joined Disney’s board in 2000, other directors were told of his wife’s job. Disney disclosed it in 2002.

The SEC faulted Disney for failing to disclose payments to Air Shamrock, an airline owned by Roy E. Disney, then vice chairman of Disney’s board, and managed by Stanley Gold, another member of Disney’s board.

From 1994 to 2003, Disney paid Shamrock for Roy Disney’s business travel, the SEC said. Mr. Disney didn’t disclose the payments, which exceeded 5% of Air Shamrock’s gross revenue, until December 2002. Roy Disney also left the Disney board last year.

Disney shares rose 5 cents to $27.42 in New York Stock Exchange composite trading.

Disney’s board is embroiled in a separate lawsuit in Delaware over the $140 million severance package awarded to Michael Ovitz, the former Hollywood agent who was fired as Disney’s second in command in December 1996, after only 15 months on the job.

Investors claim that some current and former Disney directors should be held financially responsible for Mr. Ovitz’s severance because they failed to properly oversee his hiring and firing.