Best Interests: Multifaceted but Not Unbounded

Abstract

The best interests rule – the central fiduciary duty of company directors in a number of common law jurisdictions – encapsulates loyalty between director and company. Its multifaceted nature means that it is employed to impose a number of requirements, as demonstrated in the multijurisdictional analysis in this article. Contemporary commentary and cases (such as Moulin Global Eyecare Holdings Ltd. v Mei (2014) 17 HKCFAR 466, recently analysed in this journal) have, however, doubted the fiduciary classification of the rule. This article defends the rule’s fiduciary classification. After examining key facets of the rule, it demonstrates that, although flexible, the rule cannot be stretched to protect stakeholder interests independently of corporate benefit.

Keywords: Directors' Duties, Company Law, Fiduciary Duties, Best Interests, Good Faith, Corporate Social Responsibility, Loyalty

JEL Classification: K00, K39