Directors' duties

Directors' duties are a series of statutory, common law and equitable obligations owed primarily by members of the board of directors to the corporation that employs them. It is a central part of corporate law and corporate governance. Directors' duties are analogous to duties owed by trustees to beneficiaries, and by agents to principals.

Among different jurisdictions, a number of similarities between the framework for directors' duties exist:

  • directors owe duties to the corporation, and not to individual shareholders, employees or creditors outside exceptional circumstances
  • directors' core duty is to remain loyal to the company, and avoid conflicts of interest
  • directors are expected to display a high standard of care, skill or diligence
  • directors are expected to act in good faith to promote the success of the corporation
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