What is the Duty of Loyalty owed by directors?

The Duty of Loyalty is a fundamental principle governing the actions of corporate directors, emphasizing their obligation to act in the best interest of the corporation. This duty requires directors to prioritize the interests of the company and its shareholders above their own personal interests or any other conflicting interests.

When directors fulfill their Duty of Loyalty, they make decisions that benefit the corporation as a whole, ensuring that their actions do not lead to self-dealing or conflicts of interest. This principle is critical because it helps to maintain trust and integrity within the corporate governance framework, safeguarding against actions that could harm the company's value or its stakeholders.

The other choices do not align with the established principles of corporate governance. Prioritizing personal interests or seeking profits personally are contrary to the Duty of Loyalty, which is built upon the notion that directors must avoid self-serving decisions that could undermine the corporation's objectives. Similarly, while maintaining confidentiality is important for directors, it is more closely related to the Duty of Care and overall governance principles rather than being a specific aspect of the Duty of Loyalty.