Charles is the CEO of a car company. Charles knows that the car has a defect and should be recalled. If Charles recalls the car the company will go bankrupt. Does Charles have a fiduciary duty to tell the car company’s shareholders? Why or why not?

Unit 2 – Discussion Board Business Law I

This week you will learn about fiduciary duty. Fiduciary duty is the legal obligation of one person or party to act in the best interest of another person or party. A common example of fiduciary duty is when top management of an organization is acting in the best interest of the shareholders who own the organization.

Charles is the CEO of a car company. Charles knows that the car has a defect and should be recalled. If Charles recalls the car the company will go bankrupt. Does Charles have a fiduciary duty to tell the car company’s shareholders? Why or why not?