Opinion ID: 1424871
Heading Depth: 1
Heading Rank: 4

Heading: Fiduciary Duty Delaware Corporate Directors

Text: An underlying premise for the imposition of fiduciary duties is a separation of legal control from beneficial ownership. [8] Equitable principles act in those circumstances to protect the beneficiaries who are not in a position to protect themselves. [9] One of the fundamental tenets of Delaware corporate law provides for a separation of control and ownership. The board of directors has the legal responsibility to manage the business of a corporation for the benefit of its shareholder owners. [10] Accordingly, fiduciary duties are imposed on the directors of Delaware corporations to regulate their conduct when they discharge that function. [11] The directors of Delaware corporations stand in a fiduciary relationship not only to the stockholders but also to the corporations upon whose boards they serve. [12] The director's fiduciary duty to both the corporation and its shareholders has been characterized by this Court as a triad: due care, good faith, and loyalty. [13] That triparte fiduciary duty does not operate intermittently but is the constant compass by which all director actions for the corporation and interactions with its shareholders must be guided. Although the fiduciary duty of a Delaware director is unremitting, the exact course of conduct that must be charted to properly discharge that responsibility will change in the specific context of the action the director is taking with regard to either the corporation or its shareholders. [14] This Court has endeavored to provide the directors with clear signal beacons and brightly lined-channel markers as they navigate with due care, good faith, and loyalty on behalf of a Delaware corporation and its shareholders. [15] This Court has also endeavored to mark the safe harbors clearly. [16]