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,there 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

While directors must be careful to avoid conflicts of interest and to act in the best interests of the corporation, there are circumstances where it may be appropriate for a director to engage in transactions with the corporation. For example, if the director discloses the potential conflict of interest and the board approves the transaction as fair and in the best interests of the corporation, the director may be able to engage in the transaction. However, such transactions require careful review and approval to ensure that they do not create a conflict of interest or otherwise harm the corporation.

The Fiduciary Duty of a Director to Act in the Best