Corporate governance: changing trends in interpreting fiduciary duty

Abstract

One of the foremost requirements of corporate governance is transparency in the system, which ensures that individuals making decisions for and on behalf of a company do so in the best interest of the company and clearly avoid conflict of interest. It is the crux of fiduciary duty – the duty of loyalty and care towards the employer – that personal interest is sacrificed as compared to the employer’s interest. Being on the right side of law is the goal but the line between legal and illegal is often hazy and changeable making it difficult for the practitioner to take any action and also for the judge to decide whether the line was breached or not. The paper deals with certain recent cases decided by higher courts in India and abroad on this issue.