What are the fiduciary duties of directors and officers?

In California, directors and officers of a corporation have several fiduciary duties to uphold. These duties include the duty of care, loyalty, and obedience. The duty of care requires directors and officers to act in good faith with the corporation’s best interests in mind. They must use reasonable skill and judgment in making decisions on behalf of the corporation, which must be informed decisions. The duty of loyalty requires directors and officers to put the best interests of the corporation above their own interests. This means they must not use their position to gain personally for themselves or another individual. The duty of obedience requires directors and officers to act in accordance with the law as well as the corporation’s bylaws, articles of incorporation, and other documents. They must act in a manner that is ethical and promotes the best interests of the corporation. In California, directors and officers can be held legally liable if they breach their fiduciary duties. Therefore, it is important for them to familiarize themselves with the fiduciary duties of directors and officers, and to ensure their actions and decisions align with those duties.

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What are the fiduciary duties of directors and officers?

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