What is fiduciary duty and how does it relate to the Board?
“Fiduciary duty” is used in describing the responsibilities for actions of board members. The term means that the board has responsibility for managing another persons money or assets. It requires that the board protect those assets and imparts a special responsibility upon the person who is the “fiduciary.” The term is generally used in a legal context and any board member and/or the entire board can be sued for what is commonly called “breach of fiduciary duty,” which means failure in their responsibility to handle other peoples money. This is why the board of directors also carries error and omissions insurance.
