Fiduciary Duty
The legal obligation of board directors and officers to act in the best interests of the organisation and its stakeholders — including the duty of care and the duty of loyalty.
Fiduciary duty is the legal foundation of corporate governance. Directors and officers are legally required to act in the best interests of the organisation, not in their own personal interest.
The two primary fiduciary duties are: - **Duty of Care**: The obligation to make informed decisions with appropriate diligence. Directors must inform themselves before making decisions and exercise the care that a reasonably prudent person would. - **Duty of Loyalty**: The obligation to put the organisation's interests above personal interests. Directors must not use their position for personal gain and must disclose conflicts of interest.
Fiduciary duty creates personal liability for directors. If a director fails in their fiduciary duty and the organisation suffers harm, the director can be held personally liable.
In the AI era, fiduciary duty extends to governing AI agents. Directors who fail to establish appropriate governance over AI systems may breach their duty of care if those systems cause harm.
How Constellation handles this
Constellation provides the governance infrastructure that helps directors fulfil their fiduciary duty — especially their duty of care regarding AI governance. Contemporaneous evidence and structural enforcement demonstrate that the board exercised appropriate diligence.