The Fiduciary Duty of a Director to Act in the Best

question 38

True/False

The fiduciary duty of a director to act in the best interests of the corporation means that a director may never do business with the corporation.If directors were to negotiate transactions between themselves and the corporation,there would be in an intolerable conflict between their personal interests and their obligation to act in the best interests of the corporation.That is why such transactions are never permitted.

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Definitions:

External Objective

Goals or targets set by an organization that relate to interactions with elements outside of the organization, such as market share or customer satisfaction.

Fiduciary Duty

A legal obligation of one party to act in the best interest of another. The obligated party is typically someone entrusted with the care of money or property, like a trustee or corporate officer.

Corporate Managers

Individuals responsible for making major decisions, overseeing daily operations, and implementing policies within a corporation to achieve organizational goals.

Law

A framework of norms established and applied by societal or state organizations to govern conduct.