Duty of Care
The fiduciary obligation of directors to make informed decisions with appropriate diligence — requiring them to understand risks, seek relevant information, and exercise reasonable judgment.
The duty of care requires directors to act as reasonably prudent people would in similar circumstances. This means:
- Informing themselves before making decisions (reading materials, asking questions, seeking expert advice) - Attending board meetings and committee sessions - Monitoring the organisation's operations and financial performance - Understanding significant risks and ensuring appropriate controls exist - Not delegating oversight responsibilities without appropriate follow-up
The duty of care does not require perfection — it requires diligence. Directors are protected by the business judgment rule when they make informed decisions in good faith, even if those decisions turn out to be wrong.
For AI governance, the duty of care means directors must understand what AI systems the organisation uses, what risks they present, and what governance controls are in place. "I didn't understand the AI" is not a defence if a reasonable director would have sought to understand.
How Constellation handles this
Constellation helps directors fulfil their duty of care by providing real-time governance visibility. Directors can verify that constraints are active, view escalation patterns, and understand AI agent behaviour without needing to understand the technical details.