fiduciary duty

Meaning

Fiduciary duty refers to the legal and ethical obligation of one party to act in the best interest of another. In business, directors, board members, and financial advisors owe this duty to their shareholders or clients. It implies a high standard of loyalty, trust, and care, where personal gain must not conflict with professional responsibilities.

Examples

• As board members, we have a fiduciary duty to protect the financial interests of our shareholders.

  As board members, we have a fiduciary duty to protect the financial interests of our shareholders.

• The financial advisor was sued for breaching his fiduciary duty by recommending high-commission products.

  The financial advisor was sued for breaching his fiduciary duty by recommending high-commission products.

• Corporate officers must balance their strategic ambitions with their legal fiduciary duty.

  Corporate officers must balance their strategic ambitions with their legal fiduciary duty.

• She acted in accordance with her fiduciary duty when she disclosed the potential conflict of interest.

  She acted in accordance with her fiduciary duty when she disclosed the potential conflict of interest.

• A breach of fiduciary duty can lead to severe civil penalties and permanent reputational damage.

  A breach of fiduciary duty can lead to severe civil penalties and permanent reputational damage.

Common Mistakes

• ✗ The director has a fiduciary duty with the shareholders.

  ✓ The director has a fiduciary duty to the shareholders.

  The correct preposition to use after 'fiduciary duty' when specifying the recipient is 'to', not 'with'.

• ✗ They broke their fiduciary duty.

  ✓ They breached their fiduciary duty.

  While 'broke' is understood, 'breached' is the precise, standard legal and professional collocation used when a duty, contract, or trust is violated.

Related Expressions

Practice

• The lawsuit alleges that the trustee violated their ___ by mismanaging the estate's funds.

  💡 legal obligation of trust

  Show answer

  fiduciary duty

• Investment managers owe a strict ___ to their clients, requiring them to prioritize client returns over personal profit.

  💡 ethical and legal responsibility

  Show answer

  fiduciary duty