A fiduciary relationship is a relationship of trust. This relationship places a duty on statutory directors to act within the best interests of the company, in good faith and honesty.
These are a statutory director's legal duties:
- to act only within the powers conferred upon him by the company’s constitution (the Articles of Association)
- to promote the success of the company, which involves the director acting in good faith and following best practice with regard to business transactions and the impact on the environment and community
- to exercise independent judgement
- to manage the company with reasonable care, skill and diligence
- to avoid conflicts of interest
- to refrain from accepting gifts from others
- to declare any personal interest in proposed transactions/company business
Note that these duties only apply to statutory directors. Read Different types of company director for information on other types of directors.
Only the company can enforce directors’ statutory duties.