What does “fiduciary duty” entail?

Fiduciary duty involves the obligation to act in the best interest of another party, typically within the context of a relationship built on trust and confidence, such as that between a trustee and a beneficiary, or a lawyer and a client. This responsibility means that the fiduciary must prioritize the interests of the other party over their own and must avoid conflicts of interest. By acting in the best interests of another, fiduciaries are expected to provide the utmost care and loyalty, ensuring decisions are made that promote the welfare of the party they represent.

Maximizing profits, while important in many business contexts, does not encompass the full scope of fiduciary duty, which is broader and centered on loyalty and trust. Similarly, following all laws strictly is critical in business, but legal compliance alone does not reflect the personal loyalty and trust obligations inherent in a fiduciary relationship. Focus on customer satisfaction is also vital for business success, but it does not equate to the legal and ethical responsibilities associated with fiduciary duties, which extends to loyalty and acting in the best interests of another party.