What duties do directors owe to the corporation?

Directors owe both a duty of loyalty and a duty of care to the corporation. The duty of care requires directors to act with the care that a reasonably prudent person would take in similar circumstances. This includes an obligation to be informed and to make decisions based on adequate information and deliberation. The duty of loyalty, on the other hand, requires directors to act in the best interests of the corporation, prioritizing the corporation's interests over their personal interests or the interests of third parties. This encompasses avoiding conflicts of interest and self-dealing.

By recognizing that directors owe both of these duties, it becomes clear that they are expected to act with competence and integrity in all decisions that impact the corporation's welfare. This comprehensive framework ensures that directors are held accountable for their actions and are focused on fostering the success of the company as a whole.

In contrast, focusing solely on one of these duties or on limited financial responsibilities does not take into account the full scope of a director's responsibilities toward the corporation. The framework of both fiduciary duties is essential for guiding directors' actions and ensuring they are acting in the best interests of the company and its shareholders.