If a director becomes aware of a potential opportunity that matches the corporation's line of business, what is their fiduciary duty?

• A. They may pursue personally if the company shows no interest.
• B. They should ignore it entirely.
• C. They should present to the company and not pursue it personally.
• D. They should disclose to regulators.

Answer: (C)

Directors must not take for themselves opportunities that belong to the corporation. When a potential opportunity arises that fits the company’s line of business, the director has a duty to present it to the board and refrain from pursuing it personally. This is the corporate governance principle known as the business opportunity doctrine: loyalty to the corporation requires that it be given a first chance to capitalize on opportunities within its scope. If the company expresses no interest or refuses the opportunity, the director may pursue it only under proper circumstances and without a conflict of interest, but the initial step is to offer it to the corporation and wait for its decision. Disclosing to regulators is not the standard fiduciary remedy for this scenario, and ignoring the opportunity or pursuing it personally would breach the director’s loyalty and fiduciary duties.