Breach of Fiduciary Duty in a San Diego Business

Are you concerned about a breach of fiduciary duty in a San Diego business or corporate setting? What are some examples of those who have a fiduciary duty, the types of duty they owe and when a breach might occur?

What is a Fiduciary Duty in a Business or Corporate Setting?

A fiduciary duty generally exists in situations where one party has power over another and in situations of leadership or access to financial responsibilities. The fiduciary holds a position of trust and has a responsibility to always act in the best interests of the “beneficiaries” (those they serve). It may surprise you to learn that employees have a fiduciary duty to their employers, just as the officers of a company, directors and executives do to the company itself. Business partners, whether they be members in an LLC, fellow shareholders or substantial investors have a duty to act in the best interests of their partners and the business itself.

What are some of the Duties Associated with the Breach of Fiduciary Duty in a San Diego Business?

There are many types of duties associated with the breach of fiduciary duty in a San Diego business environment. Candor is important between any fiduciary and those they serve so officers, shareholders, directors and executives have a duty of disclosure to reveal any potential conflict of interest between their actions, their own interests and those they serve. This is similar to but different from the duty of good faith and fair dealing which requires a fiduciary to be honest, fair and act in good faith as they accomplish their responsibilities.

The duty of care is another of the important responsibilities of a fiduciary. Fiduciaries must exercise prudence, reasonable judgement and take or avoid actions which might generate negative consequences whenever possible. It is important to note any decisions or actions taken with “reasonable care” which simply don’t have a good outcome do not create liability or a breach of fiduciary duty. The duties of Loyalty and Obedience ensure a fiduciary takes actions which are within the powers and purposes specified in corporate documents and contracts and puts the best interests of the company ahead of their own professional or personal interests.