There are many fiduciary duties, and they are not always clear and easy to apply in practice, especially perhaps for a newly appointed director or a trustee. Let’s take a look at what exactly a fiduciary duty is.
The Court describes the duty as one to:
“… act in good faith in the interests of (the principal), to act for a proper purpose, and not to allow… personal interests to conflict with those of (the principal)”
Who has a fiduciary duty?
- Partners (to their fellow partners).
- Solicitors and other professional advisers (to their clients).
- Trustees (to beneficiaries).
- Agents (to principals).
Their responsibilities are based on trust, confidence and good faith.
A fiduciary must not place himself in a position where his interests and his duties may possibly conflict’. Critically, a fiduciary has an obligation not to obtain, undisclosed, a profit or benefit of any kind from their position, the classic example being the secret profit or commission. In essence, anything which the fiduciary gets which is not disclosed may be subject to challenge.
This is of course just one of the many obligations to mention; there are many more and many cases describing how duties should be applied in certain circumstances.
We have put together a brief overview of the fiduciary duties. Download it here:
Feel free to contact us if you have any questions.