A board’s fiduciary duty are those things required of it as an agent of the owners. There are three duties required by most US state law. Your home country may have a slightly different take.

  • Duty of care – taking care of the owners’ assets to assure that the assets are effectively used. Duty of care demands diligence and attention paid to the organization.
  • Duty of loyalty – ensuring owners’ interests in board decisions, actions and behaviors. Duty of loyalty demands that conflicts of interest are avoided in decisions.
  • Duty of lawful obedience – taking action on any lawful direction from the owners, including legal documents approved by the owners, such as Articles of Incorporation and Bylaws.

Beyond Fiduciary

In our experience, the fiduciary duties are a minimum. The board is legally committed to these. To be a true owner representative requires more. The board and its members must be owner advocates, actively bringing owner voices and perspectives into deliberations and decisions.