![]() ![]() A company’s board cannot place any other entities above its loyalty to the company and investors. Even if the board is familiar with one candidate, and everyone approves, it must fully investigate the pros and cons of all possible new CEOs. For example, if the board votes on a new CEO, the choice should be based on all applicants’ qualifications. Therefore, the board must research all available decisions and decide what is best for the business. Duty of Care includes the board’s decisions about the company’s future. When individuals are bound by fiduciary duty, their key duties include: In this case, the client is the beneficiary, and the lawyer is the fiduciary. In short, all of those who assume fiduciary responsibility must act in the company’s best interests, including the shareholders.Īttorneys in California also assume fiduciary duty when they take on clients. In California, for example, corporate executives have a fiduciary responsibility to not only the business itself but also the company’s stockholders. What is the Meaning of Fiduciary Duty?įiduciary duty implies a meaningful, vital responsibility on behalf of the trustee. In the next section, we will elaborate on these specific obligations. In California, the courts dictate that violating fiduciary duties can be grounds for the aggrieved party to collect damages in a court of law. When fiduciaries do not uphold their duties, a fiduciary breach occurs.
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