fiduciary duty

Fiduciary duty is “the duty to act in good faith” both ethically and legally. A fiduciary is someone (or an organisation) in a position of power who acts on behalf of others, and is legally bound to put the interests of that other, before their own to preserve trust and good faith. Examples include lawyers acting on behalf of clients, company directors for the company, business partners for each other, trustees for beneficiaries, financial advisers for investors, and guardians for wards. A fiduciary often has responsibility over finances, such as managing the assets of a business; therefore a company director, board member,  or corporate officer has a fiduciary duty to put the whole company’s interests first and not to act in a way that financially benefits only themselves. Breaching fiduciary duties can incur a number of different ramifications, such as reputational damage, claims for equitable damages and compensation, account of profits, trust and property disputes, and legal fees if the case goes to court. Depending on the position the fiduciary held, it can also end in the loss of a professional license or removal from their post. If a person assists another in a breach of fiduciary duty they can also be held to account.