What remedies exist for breach of fiduciary duties by directors or officers?

• A. Damages, disgorgement of profits, rescission of improper transactions, injunctive relief, and constructive trusts.
• B. Criminal penalties only.
• C. None; breaches are not remedied.
• D. Public censure with no monetary remedy.

Answer: (A)

When directors or officers breach fiduciary duties, the remedies are civil and equitable, aimed at restoring the company and deterring future misconduct. The available options include damages to compensate for losses caused by the breach; disgorgement of profits to strip away any gains the fiduciary earned from the breach; rescission of improper transactions to unwind tainted deals and put parties back in their pre-breach positions; injunctive relief to stop ongoing or future breaches; and a constructive trust over assets acquired through the breach, so those assets can be traced and returned to the company.

Criminal penalties can arise if the breach involves fraud or other criminal conduct, but they are not the ordinary remedy for a fiduciary breach. Other choices suggesting no remedies or only public censure ignore the substantial civil and equitable relief normally available in these situations.