In business law, the duty requiring a company director to act in the company’s best interests is fiduciary duty.
A fiduciary is entrusted to exercise power for another person or organization rather than for personal advantage. Directors’ fiduciary responsibilities commonly include duties of loyalty and care, although the exact rules differ by jurisdiction. A loyalty obligation can require directors to avoid undisclosed conflicts and not divert corporate opportunities for themselves.
Fiduciary duty is not simply a promise to achieve good financial results. Courts often examine the decision-making process, information considered, conflicts, and compliance with applicable law. Directors may receive protection for informed, good-faith decisions under doctrines such as the business judgment rule, depending on the jurisdiction.