Duty of Loyalty
A core fiduciary duty requiring directors to place the interests of the corporation and its shareholders above their own personal interests when making governance decisions. The duty of loyalty prohibits self-dealing, conflicts of interest, and the usurpation of corporate opportunities. Directors must disclose any potential conflicts and recuse themselves from voting on matters where they have a personal interest. Violations of the duty of loyalty are taken more seriously by courts than duty of care breaches.
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