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Officers and Directors Owe Fiduciary Duties to the Corporation

Officers and Directors Owe Fiduciary Duties to the Corporation

In Nevada, both the officers and directors of a corporation owe it fiduciary duties.  NRS 78.138.  Those duties include the duty of care and the duty of loyalty.  A fiduciary is a “person who is required to act for the benefit of another person on all matters within the scope of their relationship; one who owes to another the duties of good faith, trust, confidence, and candor” and loyalty.  Black’s Law Dictionary (8th ed.2004).  NRS 78.138 and 78.139 declare the duties specifically owed by a corporation’s fiduciaries.  

A fiduciary may be personally liable for acts or failure to act which constitute a breach of fiduciary duty or breach of the duty of loyalty, which was a result of intentional conduct, fraud, or knowing violation of the law.  NRS 78.138(7).  Fiduciaries are insulated from liability, however, by the business judgment rule, which presumes officers and directors act in good faith and allows them to rely upon certain information and business practices when making decisions as is explained in this article.  NRS 78.138 and 78.139.

 

About the Author

Jay Young is a Las Vegas, Nevada attorney. His practice focuses on business law, business litigation, and acting as an Arbitrator and Mediator. Peers have named him an AV-Rated Lawyer, Best Lawyers, a Top 100 Super Lawyers in the Mountain States multiple years, and to the Legal Elite and Top Lawyers lists for many years. Mr. Young has been appointed a part time Judge, a Special Master to the Clark County, Nevada Business Court, as an arbitrator by the Nevada Supreme Court. He has been appointed as an arbitrator or mediator of well over 250 legal disputes from business disputes to personal injury matters. He has been named Best Lawyers for Arbitration. Mr. Young is a respected author of ten books, including A Litigator’s Guide to Federal Evidentiary Objections, A Litigator’s Guide to the Federal Rules of Evidence, and the Federal Court Civil Litigation Checklist.
Mr. Young can be reached at 702.667.4868 or at jay@h2law.com.