In the business world, success comes from trust and leadership. Often an entity is only as successful as the individuals who are tasked with its management. In Ohio and throughout the country, business executives carry heavy burdens to do their best to foster the growth and achievement of the entities they manage.
However, not all business leaders act in the best interests of their shareholders, employees, and communities. When business leaders make poor decisions and take negligent actions, they may be liable for committing business torts. One business tort that may apply in such cases is a breach of fiduciary duty. This post does not provide legal advice on this complex business law topic but introduces it for the benefit of this blog’s readers.
What is a fiduciary duty?
A fiduciary duty is a duty based on trust. When a person is placed in a position to look out for the best interests of another, they may be considered a fiduciary. In the business world, executives are often fiduciaries as they have the power to make financial, operational, and personnel decisions that can impact the greater workings of an entire business enterprise.
How fiduciary duties can be breached
Often, breaches of fiduciary duties are not overt actions. In some cases a breached fiduciary duty may include the failure of the fiduciary to relay information to another party to their detriment. In other cases, breaches of fiduciary duties may occur when fiduciaries act in their own self-interests instead of for the benefit of their clients, shareholders, or employees.
When an entity suspects that a fiduciary duty has been breached, they can choose to seek legal counsel. Business torts can be costly and detrimental to businesses and resolving them with legal help can help soften their effects. There are no guarantees in the law, and all readers with concerns about business torts can contact their trusted business law attorneys.