Duty of Loyalty
The fiduciary obligation of directors to put the organisation's interests above their own — requiring conflict disclosure, avoiding self-dealing, and maintaining confidentiality.
The duty of loyalty requires directors to prioritise the organisation's interests over personal interests. Key aspects include:
- Disclosing any conflicts of interest (financial interests, family relationships, competing obligations) - Not using their position for personal gain (self-dealing, insider trading, usurping corporate opportunities) - Maintaining confidentiality of privileged information - Not competing with the organisation - Acting in good faith in all decisions
The duty of loyalty also extends to ensuring the organisation itself acts with integrity. Directors who knowingly allow the organisation to act unethically may breach their duty of loyalty to stakeholders.
How Constellation handles this
Constellation's contestation mechanism (Forum) and governance traces ensure transparency in decision-making, making it harder for conflicts of interest to go undetected.