What Are Board Fiduciary Duties ?

Board Fiduciary Duties

Fiduciary duty equates with loyalty and encompasses the four main legal principles:

  1. The duty to act in the best interests of the organization
  2. The duty to disclose other interests and avoid conflicts
  3. The duty to maintain the organizations information in confidence
  4. The duty to respect corporate opportunities

I was recently asked a question by a director to clarify the duty to act in the best interest of the organization as compared to acting on behalf of the best interest his own organization. He stated that he sat on the board in order to maximize the effectiveness and influence of his own company with the Associations sector. He was confused and asked for an explanation. This is an answer for him and applies to all board members:


The duty the duty to act in the best interest of the organization is very broad, requiring directors and officers to exercise ordinary care in performing their duties. When acting on behalf in their capacity of serving the organization, they must put the organization’s best interests ahead of any other interests.

There are certainly some grey areas in dealing with this however if for example the director has volunteered to speak on behalf of the Association and the volunteer spends the time promoting his business he (or she) is defiantly not acting in the best interest of the organization hence not following his or her) board fiduciary duty.

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