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Officer and director duties of care and of loyalty

On Behalf of | Apr 18, 2019 | Business Litigation |

Companies in Florida vary greatly in size and therefore they vary greatly in the number of employees working for them. These companies need people to manage the employees and to do this they hire managers and other officers of the company to ensure everything runs smoothly. These officers can include chief executive officers, chief financial officers, chief operating officers and many others who may be underneath the top levels of management of the company.

These officers have a duty of loyalty and a duty of care to the company. These duties may be breached when the officers stop acting in the best interests of the company and instead starts acting in their own best interests. Directors must act in good faith in the best interests of the company as a normally prudent individual would act in the same capacity. Officers have a duty to perform their duties as stated in the bylaws of the company or in a manner consistent with the direction of the board of directors or other officers in accordance with the bylaws.

At the higher levels of the company it is especially important that the officers base their decisions on what is in the company’s best interests. As the top officers make the decisions regarding how the day to day operations of the company are run, if they do not act in the company’s best interests, the company can be put into a very difficult position and sent in the wrong direction. This can cost the company very large sums of money based on the fallout of the poor decisions of the officers.

The leadership of companies in Florida is very important for the success of the companies. Therefore, the directors and officers of these companies have a duty to make decisions that are in the companies’ best interests. If they start making decisions that fall below that standard, the board or potentially shareholders may have business disputes against the directors and/or officers of the company. Experienced attorneys understand these duties and may be a useful resource.