Corporate directors owe fiduciary duties of care and loyalty to the corporation and its shareholders as a result of their position of control. In general, the standard for the duty of care owed by a director is one of a prudent person in similar circumstances. The duty of loyalty prohibits directors from engaging in self-dealing transactions and acts of bad faith.
Wendy B. Gayle,
The Defensive and Offensive Use of "Poison Pills" Within the Business Judgment Rule,
U. Rich. L. Rev.
Available at: http://scholarship.richmond.edu/lawreview/vol24/iss1/8