The term fiduciary refers to a relationship in which one person has a responsibility of care for the assets or rights of another person. A fiduciary is an individual who has this responsibility. The term "fiduciary" is derived from the Latin term for "faith" or "trust."
A fiduciary relationship exists with individuals who handle money or property for others. For example, your employees or contract employees may be fiduciaries, if they handle money or property. Trusted advisers like your accountant or your attorney or your insurance agent may also be fiduciaries.
The fiduciary responsibilities of a corporation's board members includes:
- Avoiding conflicts of interest
- Acting in the interest of the company rather than the member's personal interest
- Providing oversight to assure that all company business is transacted legally
- Making decisions to protect the assets of the corporation.