Officers and directors of a corporation occupy a fiduciary position in relation to the corporation and its shareholders. The position is one of trust and officer and directors are obligated to act with fidelity and must subordinate their personal interest to the interest of the corporation should there be a conflict. Johnson v. Duensing, 351 S.W.2d 27, 32 (Mo. 1961). This fiduciary obligation requires officers and directors to exercise the utmost good faith in the discharge of their duties and to act for the corporation and all of its owners, giving all the benefit of their best judgment. Moore v. Moore, 189 S.W.3d 627, 633 (Mo. Ct. App. 2006).
Note, though, that unless there is a non-compete, confidentiality or non-solicitation agreement signed, a director or officer can disassociate with the corporation and potentially enter into direct competition with the corporation through another enterprise. Dwyer, Costello and Knox, PC v. Diak, 846 S.W.2d 742, 748 (Mo. Ct. App. 1993) (“[a] director is free to terminate his tenure as such and to enter into a competing business, just as any other employee is”). For this reason, shareholders should typically require or request that their officers and directors sign post-employment/association restrictie covenants to prohibit direct competition by a former officer and/or director.
Contact with questions.