If we use the picturesque language of President A. Barak, then while "[that] the purpose of the principle of good faith is to prevent 'man to man-wolf' and to ensure 'man to man-man-man,' the purpose of the duty of fiduciary duty is to ensure 'man to man to man-angel.'" (Buchbinder, at p. 333; For the meaning of this standard in Delaware, see, e.g., In re Columbia Pipeline Grp., 299 A.3d 393, 455 (Del. Ch. 2023) ("Acting loyally requires acting in good faith, and acting in good faith requires that the fiduciary subjectively believe that the course of action is in the best interests of the corporation and its stockholders") (hereinafter: the Columbia Pipeline case).
- Indeed, this is a rather strict standard of conduct that relies on moral justification, according to which there is room to protect the value of trust that lies in the relationship between the officer and the company; and the same applies to economic justification, according to which the imposition of the duty of fiduciary duty is sufficient to reduce the costs of the representative (Khaled Kabub, Reut Avraham-Gedalya, and Alon Luxenburg, "Taking a Business Opportunity: The Scope of the Responsibility of an Officer of a Public Company for Taking a Business Opportunity of the Company" NG 1, 2 (not yet published 2024) (hereinafter: Kabub, Avraham-Gedaliah and Luxenburg); Yosef Gross, Directors and Officers in the Era of Corporate Governance 296 (Fifth Edition, 2018) (hereinafter: Gross – The Era of Corporate Governance); The Verdnikov case, at paragraph 48; Goshen, on page 554).
- I am of the opinion that these justifications are only valid when we are dealing with a director, in view of the importance of this position and its great impact on the affairs of the company. My colleague, Justice Amit, noted this when he noted that:
"Being a director is not just a matter of honor or respect [...] The honor and respect of the director's role has long since been replaced by the responsibility and duty of care that the director has inhabited by his very position. Not today's director as the director of yesteryear. The director of the 2000s cannot be a naïve person who does not know how to ask when he occasionally sits together and drinks tea at board meetings [...]" (Civil Appeal 4024/14 Africa Israel Investments Ltd. v. Cohen, para. 53 [Nevo] (April 26, 2015)).