Fiduciary Principles: Corporate Responsibilities to Stakeholders

The recent corporate scandals and financial crisis has increased demand for accountability in business decisions. Corporate governance reform initiatives designed to increase financial disclosure and responsibility are insufficient to rebuild public trust in business. Corporate boards and officers must comply with the legal norms to which they are already subject; as fiduciaries they have duties of care, loyalty and good faith. This article examines modern fiduciary duties that currently govern corporate conduct and thus severely limit corporate responsibility. Revisiting the historical and religious origins of fiduciaries that shaped the ethical and moral duties gives insight into the true role of a fiduciary. We propose a new, well-defined definition of fiduciary duties that could offer corporate managers guidance in developing new stakeholder relationships.