« Back to Glossary IndexFiduciary Duty
Fiduciary duty refers to the legal obligation of an individual or entity to act in the best interests of another party, typically in financial or corporate matters. In the UAE, directors, company managers, and financial advisors owe fiduciary duties to shareholders, clients, or beneficiaries, requiring them to act with loyalty, honesty, and due care. Under Federal Decree-Law No. 32 of 2021 on Commercial Companies, directors and managers must avoid conflicts of interest, exercise reasonable diligence, and protect company assets. Breach of fiduciary duty can lead to legal action, financial penalties, and even criminal liability, particularly in cases involving fraud or mismanagement.
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