Leaders Are Not Fiduciaires
53 Pages Posted: 10 Dec 2020
Date Written: March 2, 2020
Leaders have long been described as fiduciaries because they are entrusted with the power to make decisions that significantly affect the lives and welfare of others. While trustworthiness is an admirable and necessary quality in a leader, fiduciary doctrine describes neither the bounds of a leader’s behavior nor the protections enjoyed by the governed. Fiduciary doctrine does not occupy the field of trusting relationships.
Leaders sell both the goals and priorities they will pursue in their positions and their own trustworthiness—that is, the combination of ability, integrity, and benevolence they bring to the task. In order to win and keep leadership positions, leaders must define success for constituents and convince them that they can be relied upon to deliver those results according to a given standard of decency. Fiduciary rhetoric obscures, rather than supports, the elements of trust that leaders must sell to their constituents. Those who are vulnerable to the decision-making of powerful others are harmed by their own belief in fiduciary rhetoric that does nothing to constrain the behavior of leaders who are driven by self-interest. Fiduciary rhetoric does not describe how leaders make decisions, and fiduciary doctrine cannot protect those who select and rely on leaders. By deceiving and misdirecting those it aims to protect, the fiduciary myth does real harm.
This Article makes three novel theoretical contributions to the literature. First, it argues that contrary to popular and scholarly opinion, conscientious leaders of large, diverse groups are not, and cannot be, fiduciaries of those they lead. Second, it models a more accurate understanding of how leaders are constrained by those affected by their decisions. Third, it presents an explanation of why the fiduciary myth, long viewed as harmless at worst, is actually harmful to those it is supposed to protect. It animates these arguments by focusing on the specific relationships between corporate and political leaders and their constituents.
Keywords: fiduciary duties, corporate law, contracts, political science, government, trust, voting behavior
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