Navigating Corporate Responsibilities: A Case Study on Director Duties and Fiduciary Obligations in Car Manufacturing

Rogers's responsibility as a director in a car manufacturing company is developing confidence in his clients and staff and trusting the company's shareholders and other corporations. His fiduciary duty should also be extended to ensure that it includes the duty of caring for his clients, obeying the stakeholders, being loyal to them, and having faith in the stakeholders and other corporations. Ensuring that he fulfills his duties will play a significant role in ensuring that the company's interests and those of the shareholders have been safeguarded. It is therefore important for Rogers to realize that he has the duty of ensuring that all his work aims at satisfying the best interests of the company together with the shareholders, which can only be achieved by ensuring he prevents engaging in various activities that may be conflicting to the goals of his company.

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Rogers ended up being sued by a shareholder mainly because he felt that he had violated some of its most significant duties. Some of the duties he had violated included convincing the board to make huge investments in SUVs, which eventually did not succeed. That eventually made the company lose a lot of money. According to the case of facts, it shows that Rogers failed to meet the principle of the law of having the duty of care. That fact demonstrates that it is the director's responsibility to perform his duties by caring for its shareholders and other corporations.

Roger's duties should mainly be directed to his car company but not to any single shareholder. Therefore, he should always remain loyal to the company while undertaking his duties and ensuring that he avoids conflicts with the shareholders. As a director, Roger fails to display care and diligence standards when he fails to provide the shareholders with the correct advice on what they are expected to do for the company to gain maximum profits. Roger has the duty of acting in good faith (Masum et al., 2018). That is mainly to mean that it is his responsibility to ensure that the car company succeeds. Therefore, that means that the courts have to follow the presumption that the director should mainly be motivated by bona fide, which mostly focuses on the car company's interests.

While in the courts, in order for the shareholders to challenge Roger's actions in the car company, they should ensure they had provided enough evidence that he breached the fiduciary, which ensures the duty of good faith has been met when he was advising the board to consider manufacturing the sport utility vehicles (Sanders, 2016). Other facts that the shareholders should use in the courts while challenging Rogers in the courts include failing to meet his loyalty to the company and his due care. Once the shareholders have failed to present some of such evidence though Roger had failed to perform his duties, there is a higher likelihood of the shareholders losing the case in courts.

Roger's decision to convince the shareholders to consider manufacturing the sport utility vehicle was not taken in isolation by the directors. That is mainly because the board decided against conducting enough research about that decision, which could have been done by having a committee perform such activities. The board still decided to hire a marketing consulting firm. The committee's results mandated conducting the research. The marketing firm concluded that the majority of the customers supported the idea of manufacturing the sport utility vehicle. That is mainly to mean that the decision was mainly made to promote the success of the company.

Reference

Masum, A., Salahudin, S. N., & Aziz, H. H. H. A. (2018). Corporate Governance and Directors Duty to Act in Good Faith and the Best Interest of the Company: The Malaysian Experience. International Journal of Engineering & Technology, 7(4.38), 795-799. https://www.researchgate.net/profile/

AhmadSanders, L. (2016). GM MDL Raises Questions about Fiduciary Duty. Judicature, 100, 47. https://heinonline.org/hol-cgi-bin/get_pdf.cgi?handle=hein.journals/judica100&section=28