How do fiduciary duties apply to corporate opportunities in the context of a board of directors?

• A. Directors may pursue any opportunity they like, regardless of company.
• B. Directors must present corporate opportunities to the company if they fall within the corporation's line of business and not pursue them personally.
• C. Corporate opportunities belong to the director personally by default.
• D. Directors must wait for shareholder approval to pursue opportunities.

Answer: (B)

Directors are bound by the fiduciary duty of loyalty, which includes the corporate opportunity doctrine. If a business opportunity falls within the corporation’s line of business or is one the director becomes aware of because of their position, the director cannot seize it for themselves. The proper course is to present the opportunity to the corporation first and refrain from pursuing it personally unless the company declines or has no interest.

This is why the statement that directors must present corporate opportunities to the company when they lie in the corporation’s line of business and not pursue them personally best captures the rule. It embodies loyalty to the company and prevents self-dealing by taking advantage of information or opportunities the company should have had a chance to pursue.

The other options conflict with this duty: choosing to pursue any opportunity regardless of the company violates loyalty; claiming the opportunity belongs to the director by default ignores the corporation’s claim to opportunities arising from the director’s position or the company’s business; and waiting for shareholder approval is not the standard mechanism for handling corporate opportunities—disclosure and the corporation’s decision are the key steps.