Business Laws : What Is Corporate Duty of Loyalty?


You’ve recently purchased some corporate stock
and you’re becoming involved in following the progress and the operations of the corporation
in which you’ve invested and you’re hearing terminology that you vaguely remember maybe
you heard about it in your 8th grade civics class or you read about it in the newspaper,
but you’re not that comfortable with the terminology and one of the phrases is corporate loyalty,
duty of corporate loyalty. Hello, I’m Robert Todd and I’m here to answer the question what
is corporate duty of loyalty? Basically this concept involves the board of directors and
the officers of the corporation having a duty to the shareholders to manage their affairs
to the best of their ability and perhaps more importantly, to avoid conflicts of interests.
And conflicts of interests in its simplest terminology and concept is really putting
the corporate’s best interests first before the individual interests of the individual
members of the board of directors or the individual interest of the corporate officers. I’m Robert
Todd and thank you for watching.

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