Bachelor of General Studies (BGS) Degree Practice Exam

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The fiduciary duty of managers primarily benefits which group?

Shareholders.
Customers.
Employees.
Suppliers.

The correct answer is: Shareholders.

Fiduciary duty refers to the legal obligation that managers and company executives have to act in the best interests of those they represent. In the context of a corporation, this duty is principally owed to the shareholders. Shareholders are the owners of the company, and managers are tasked with making decisions that enhance the value of the company and, by extension, provide returns to these owners. This includes making strategic choices, managing resources efficiently, and ensuring the financial health of the organization. Since shareholders invest their capital with the expectation of a return, it is the responsibility of managers to prioritize decisions that safeguard and grow shareholder investments. While customers, employees, and suppliers are also important stakeholders in a business, the primary fiduciary responsibility of managers is aligned with the interests of the shareholders. Consequently, the primary beneficiary of the fiduciary duty of managers is indeed the shareholders.