For a business to operate efficiently and grow, each party should have the best interest. This is a fiduciary duty, and it involves two parties, a fiduciary and a principal. A fiduciary acts in the best interest of a principal/ the beneficiary of the act. For example, business partners should act in the best interest of the business, and so on.
Fiduciary duty involves factors, such as loyalty, confidentiality, reasonable care, full disclosure of conflicts of interest, good faith and more.
If a party breaches their fiduciary duty, acting in a manner that contradicts their duty, here is what you should do.
Obtain more information
Fiduciary duties can be a broad aspect. Thus, if you believe a party has not acted in the best interest of the company, you should obtain more information. For example, if an employee discloses confidential information to an external party, you should get more information about the case, reread the confidentiality agreement they signed and then make a decision.
Quantifying damages
You also need to know the damages you suffered from the act. For instance, if your business partner makes a move that profits them, you can document how the company experienced a loss as a result.
If an employee discloses information to another company that used it as a competitive advantage against you, you should know how your company was disadvantaged. It’s crucial to understand a behavior’s consequences because you may need to prove damages when you file a claim.
If you believe an employee, partner, board of directors, shareholders or any other party has breached their fiduciary duty, you should get legal guidance to make the right moves.