What is the fiduciary duty of the board of directors?
A fiduciary duty is the obligation to act in the interest of the owners of the organization. Boards of directors make important decisions on behalf of their shareholders (the ‘owners’ of the organization) – they must do so in a trustworthy, responsible manner – that is, with integrity, good faith and due diligence. Directors must avoid any real or perceived conflict of interest – that is any circumstance where a director’s personal interests may conflict with those of the organization.
