If you have investments, a will, or a company with a board of directors, then you should know what the term ‘fiduciary’ means. It’s a term that refers to someone who’s in a position of responsibility. Anyone who assumes such a role, whether it’s as an investment portfolio manager, an executive of an estate, or a board member, generally qualifies for monetary compensation or other valuable benefits in exchange for their services.
Fiduciaries take on a “duty of care” when they come into their roles. They assume the responsibility of doing what they see is in the best interest of others and not themselves as part of this equation. Courts expect fiduciaries to hire professionals to guide them in making sound decisions when they don’t have the expertise to know how to act. The ultimate responsibility to ensure that the company becomes profitable should be high on the priority list for fiduciaries.
An interested party may accuse a board member of breaching their fiduciary responsibilities if they hire an unqualified individual or enter into a contract that benefits a board member more than it does the business. Such activity is potentially financially damaging to the company.
Furthermore, fiduciaries may face penalties for breaching their assigned duties. The plaintiffs may be able to sue these individuals for damages in a California court for violating their responsibilities.
However, proving that a fiduciary breached their responsibility isn’t easy. An experienced business attorney with previous experience could guide your company with expertise. Additionally, the costs associated with litigating such cases can quickly add up. Thus, you may benefit from working with a lawyer that is keen on minimizing time and expense when engaging in business litigation.