When an individual is designated to act in the best interest of somebody else, either another individual or an entity, they are known as a fiduciary. Typically, a fiduciary is given charge of property, money or other valuables. It is commonly seen when somebody is in charge of an estate but the fiduciary obligation may extend in other areas as well.
One of the issues that can occur in this regard is a breach of fiduciary responsibility. This occurs when the fiduciary does not act in the best interest of the other party but rather, acts in their own best interest. In your role is a fiduciary, it is necessary to act without any conflicts of interest or to do anything that would be considered to your advantage. When an individual steps outside of the lines, they may be considered in breach of their fiduciary duty but in some cases, fraud may also be involved.
The breach of fiduciary duty is is not typically as difficult to prove as fraud. In the case of a breach of fiduciary duty, it is not necessary to prove either criminal or fraudulent intent in most cases. To win the complaint, it is only necessary to prove that the individual was acting in a fiduciary manner and that the trust was breached in some way or another.
Since it can be a serious matter to be in breach of fiduciary responsibility, it is best to know how to avoid it in the first place. This may involve having everything in place before the responsibility begins, including creating board resolutions. Once they are in place, if any major decision must be made, the shareholders or the Board of Directors should meet to pass a resolution.
In addition, understanding the basic fiduciary duties is important, as you may not understand everything that is necessary to act in this behalf. If you know the proper actions to take, it is less likely for a breach of fiduciary duty to take place. This might include handling any transactions that occur while you are in that position.
If you find yourself in a position where a breach has taken place, it is important to seek legal counsel as soon as possible. They can help you to navigate these difficult waters and to have the best chance of success in doing so.