Overview
A fiduciary duty obliges a person entrusted with another’s property or interests to act loyally and carefully for them. It grew from Anglo-American trust law and applies to directors, trustees, asset managers and lawyers.
📌 At a glance
- Elements
- Care + loyalty
- Korea
- Commercial Act 382, 382-3
- Related
- Beneficial owner, Piercing the veil
Two core duties
| Duty | Meaning |
|---|---|
| Care | Act with the care of a reasonable person, on adequate information |
| Loyalty | Put the beneficiary’s interests first; avoid self-dealing and conflicts |
Korea’s 2025 reform
An amendment passed on July 3, 2025 and effective July 22 extended directors’ duty of loyalty from "the company" to "the company and its shareholders," requiring fair treatment of all shareholders.
Entrusted power brings heavier duties. Because information and control are concentrated, the law demands "your interest before mine."
Business judgment rule
Courts defer to informed, disinterested, good-faith decisions. But in *Smith v. Van Gorkom* (Del. 1985) directors who approved a merger without adequate information breached their duty of care.
Comparison
| Country | Basis |
|---|---|
| Japan | Companies Act Arts. 330, 355 |
| US | State law and case law |
| China | Company Law (2023) Art. 180: loyalty and diligence |
Frequently asked questions
- Are care and loyalty distinct?
- In US law, yes; Korean scholars debate it.
- What changed in 2025?
- Directors now owe loyalty to shareholders too.
- Consequences of breach?
- Damages and possibly criminal breach of trust.
References
- 대한민국 「상법」 제382조 제2항, 제382조의3(2025. 7. 22. 개정·시행), 「민법」 제681조.
- 日本「会社法」第330条、第355条、「民法」第644条.
- 《中华人民共和国公司法》（2023年修订）第180条.
- Smith v. Van Gorkom, 488 A.2d 858 (Del. 1985).
- Frankel, T. (2011). Fiduciary law. New York: Oxford University Press.