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.
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.