What does the fiduciary duty of loyalty generally require from a company director?
Correct answer: A. Acting in the company's interest rather than for personal gain
- A. Acting in the company's interest rather than for personal gain
- B. Maximising the director's personal investment returns
- C. Avoiding every business decision involving financial risk
- D. Following every request made by the largest shareholder
Explanation
The duty of loyalty requires directors to put the company's interests before their own and manage conflicts honestly. It does not require avoiding all risk or obeying one shareholder's personal instructions.
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About Business Ethics and Corporate Governance
Business ethics applies principles such as honesty, fairness, responsibility and transparency to decisions involving employees, customers, investors, competitors and society. Corporate governance covers the board of directors, accountability, disclosure, internal controls, stakeholder interests, agency conflicts, corporate social responsibility, codes of conduct and whistleblowing.
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