What Is a Fiduciary Duty?

Video Transcript

"You have recently invested in a corporation on wall street and you are hearing terms that you are not familiar with and one of these terms is fiduciary duty. Another is a phrase "fiduciary duty owed the shared holders by the board of directors". Another is " the fiduciary duty owed by the corporate officers." What is a fiduciary duty? Hello, I'm Robert Todd and I'm here to answer the question "what is a fiduciary duty?" Well, generally a fiduciary relationship creating a duty is a service relationship whereby the individual that owes the duty or the trust, such as the board of directors, to the individual empowering the trust, such as the share holder, performs a service. And, in performing that service, owes a duty to the person that provided them with the authority to perform that service. The fiduciary relationship contemplates a duty of the empowered individual, in this case the board of directors, to carry out the services to the best of their ability on behalf of the individuals, empowering them with that authority. That's a fiduciary duty. I'm Robert Todd and thank you for watching."