The fiduciary duty of a director to act in the best interests of the corporation means that a director may never do business with the corporation. If directors were to negotiate transactions between themselves and the corporation, they would be in an intolerable conflict between their personal interests and their obligation to act in the best interests of the corporation. That is why such transactions are never permitted.

Question

Quizplus · Accepted Answer

Directors can engage in transactions with the corporation if they fully disclose their interest and the transaction is fair to the corporation. Many jurisdictions allow such transactions if they are approved by disinterested directors or shareholders.

The Fiduciary Duty of a Director to Act in the Best