Fiduciary duty: A fiduciary is a person who owes a duty of finest loyalty toward some other person. Fides, good faith, is part of being a fiduciary, but a fiduciary duty is a greater duty than mere factual honesty. Fiduciaries owe others a duty of loyalty and prudent management. Corporate trustees owe a general fiduciary duty to the corporation, for example, and thus also may owe a fiduciary duty to any given shareholder, at least as to the shareholder’s shares in the corporation. It is less likely that a fiduciary duty would be imputed toward the employees of the corporation, since their relations are generally governed by contract law, not trusts, their being no entrusted property held or controlled by the purported fiduciary. It is the fiduciary’s legal or equitable title or even mere factual control over a property interest which justifies imposing an equitable duty on them to use the property in the best interests of the beneficiary. Fiduciary duties might be imputed to officers or directors of the corporation as to the corporations property since they usually have actual control, but are again unlikely to be imputed to ordinary employees who are instead governed by contract law. Fiduciary duties, like the corporation, arose out of the idea of entrusted property — the trust, which explains the separation of ownership and control.
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