Decoding the fiduciary duty of loyalty

The article focuses on the duty of loyalty, which is fundamental to the fiduciary relationship as a legal concept. The inseparability of fiduciary relationship and the duty of loyalty is revealed through its attributive legal nature, which is related with the exercise of derivative powers delegated to the fiduciaries and appropriation of thereof results by the beneficiaries. The study identifies loyalty as a legal standard rather than a specific duty, emphasizing the need for clarity on what constitutes "acting in the best interests" of the company. It concludes that while fiduciary loyalty involves a framework of prohibitions to safeguard beneficiary interests, the intertwining of fiduciary duties of care and loyalty, by way of introduction the good faith duty in the corporate law, complicates the doctrinal consistency of the context of this term. Ultimately, the conclusions suggest a clearer definition of fiduciary loyalty in general terms and with the incorporation of the duty of good faith in the corporate law in particular.