{"id":104,"date":"2023-08-03T10:30:18","date_gmt":"2023-08-03T14:30:18","guid":{"rendered":"https:\/\/pressbooks.library.torontomu.ca\/cebe\/chapter\/__unknown__-25\/"},"modified":"2023-08-22T12:13:34","modified_gmt":"2023-08-22T16:13:34","slug":"fiduciary","status":"publish","type":"chapter","link":"https:\/\/pressbooks.library.torontomu.ca\/cebe\/chapter\/fiduciary\/","title":{"raw":"Fiduciary","rendered":"Fiduciary"},"content":{"raw":"

A fiduciary<\/strong> is a person who has been entrusted with a responsibility to act loyally for the benefit of another person \u00a0\u2013 called a beneficiary<\/em> \u2013 in managing an asset or pursuing a project.\u00a0The term \u201cfiduciary\u201d occurs most commonly as a description of specific kinds of duties, obligations, or responsibilities. Under the law, fiduciary duty is understood to include both a duty of loyalty (to act in the beneficiary\u2019s interests and not to subordinate the beneficiary\u2019s interests<\/a> to others\u2019 interests) and a duty of care (to make reasonable and diligent efforts to advance the beneficiary\u2019s interests).<\/p>\r\n

Everyday examples of fiduciary relationships include the physician-patient and attorney-client relationships. Physicians are fiduciaries for their patients with regard to maintaining the patient\u2019s health. Attorneys are fiduciaries for their clients with regard to protecting the client\u2019s legal interests.<\/p>\r\nFiduciary relationships appear frequently in business. As just one example, a full-service stockbroker is a fiduciary for her client with regard to managing the client\u2019s investment portfolio. The stockbroker has a duty to pursue trades in the client\u2019s interests and not to subordinate the client\u2019s interests to other interests (including the stockbroker\u2019s own!) that could be served through trades made in the client\u2019s account.\r\n\r\nThe similarity of fiduciary relationships to agency<\/a> relationships is not accidental. At law, all agents are fiduciaries, though not all fiduciaries are agents. That is because there is a class of fiduciaries who are not subject to beneficiary control. For example, a trustee appointed by a parent to manage a trust fund for an infant child is a fiduciary for the child, but is not subject to the child\u2019s control (and is therefore not an agent for the child).\r\n

A controversial topic in business ethics surrounds the fiduciary duties of a corporation\u2019s directors and officers in pursuing the governance<\/a> of the corporation. Some understand the beneficiary of directors\u2019 and officers\u2019 fiduciary duties to be the shareholders of the corporation; if this is right, then the corporation should be managed in the shareholders\u2019 interests. Others understand the beneficiary\u00a0of directors\u2019 and officers\u2019 fiduciary duties to be the corporation itself (as distinct from the corporation\u2019s shareholders) and see this as underwriting the stakeholder view of the corporation\u2014the idea that the corporation should be managed in the interests of all of its stakeholders. (This is also sometimes called the multi-fiduciary view.)<\/p>\r\n

See also in CEBE:<\/b><\/p>\r\n\r\n