Duty of loyalty requires directors to subordinate their personal interests to those of the corporation and its shareholders.

Question

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The duty of loyalty is one of the core fiduciary duties of directors, which requires them to act in good faith and in the best interests of the corporation and its shareholders. This duty requires directors to put aside their personal interests and not engage in any transactions that could create conflicts of interest or loyalty. Failure to fulfill this duty can result in legal liability for the director and harm to the corporation and its shareholders.

Duty of Loyalty Requires Directors to Subordinate Their Personal Interests