Fiduciary Duty

Formal Definition

A legal obligation of one party to act in the best interest of another, typically involving directors' obligations to shareholders.

The bedrock of corporate governance; directors must prioritize the corporation's success over personal gain or competing interests.

"The board was sued for breaching their fiduciary duty during the hostile takeover negotiations."

Confused with 'Corporate Responsibility'; Fiduciary duty is a strict legal mandate, whereas Responsibility is often ethical or social.

Shareholder Duty of Care Conflict of Interest

To whom do directors primarily owe a fiduciary duty?

Is fiduciary duty an ethical suggestion or a legal obligation?