Which of the following is the most appropriate term to use when describing management's duty to its shareholders?
A)Official duty
B)Legal duty
C)Fiduciary duty
D)Statutory duty

Question

Quizplus · Accepted Answer

Fiduciary duty refers to the legal obligation of managers and directors to act in the best interests of their shareholders, putting their needs above their own personal interests. This duty is derived from the relationship of trust and confidence that exists between management and shareholders. Therefore, fiduciary duty is the most appropriate term to use when describing management's duty to its shareholders. Options A, B, and D are incorrect because they either don't capture the essence of the legal obligation or are insufficient to fully describe management's responsibility towards shareholders.

Which of the Following Is the Most Appropriate Term to Use