The Justification for the Existence of Fiduciary Duties in Company Law

Abstract

Fiduciary duties are a widely recognized legal institution, and they present one of the most important attempts in law to solve the first agency problem and to constrain broad management powers. The subject of this paper is the issue of the justification for the existence of fiduciary duties, which has been present almost since the inception of this institution. At the beginning, the author presents a short overview of the emergence of fiduciary duties in the Anglo-Saxon law and the legal transplant of these duties to continental Europe. In the next part of the paper the author considers the first aspect of the main issue of the paper that is the justification for the existence of fiduciary duties. The first aspect deals with the various theories dedicated to reason, purpose, and rationale for the existence of fiduciary duties in company law. The second aspect of the issue deals with the modern views, which strive to determine whether the fiduciary duties’ existence in company law is justified at all. Finally – in the conclusion – the author tries to determine the relevance of the questions raised in this paper for Serbian company law.