An individual who has a fiduciary duty is required to exercise loyalty, care and good faith when carrying out their duties while protecting confidential information and acting in the business’s best interests. A breach of the fiduciary duty can be costly in more ways than one, impacting everything from your business operations to profitability and consumer perception. While legal action can be an effective way to hold someone accountable for breaching their fiduciary obligations, in some instances a lot of the damage has already been done by that point.
There are several steps you can take here. These include:
- Creating, implementing and training on policies that speak directly to fiduciary obligations and how to handle issues that could give rise to a breach of those fiduciary duties
- Consistently discussing what conflicts of interest look like and how to avoid them
- Utilizing decision-making scenarios using real-world situations that allow your employees to step into the shoes of those confronted with fiduciary challenges
- Increasing oversight of those who carry a fiduciary duty
- Developing strong policies that specify the consequences for unethical behavior and that protect those who report what they view as a breach of the fiduciary duty
- Devising a risk mitigation strategy that eliminates vulnerabilities
Be proactive in protecting your business from breach of the fiduciary duty
There may be other steps you can take to protect your business. Just be proactive in thinking through how you can mitigate the risks you may see. By being diligent here, you might prevent otherwise devastating situations that are harmful to your business. If you’d like more information about how to get a handle on issues related to breach of the fiduciary duty, then please continue to read our website.