Fiduciary duties are assigned to those trusted to exercise control over the property of another. In the corporate setting, the board of directors has discretion and management authority over the corporation, which is owned by its stockholders. As such, directors owe fiduciary duties to the corporation’s stockholders to act in the corporation’s best interests.

Since at least the early 20th century, in certain circumstances, Delaware courts have also imposed fiduciary duties on majority stockholders to act for the benefit of the corporation’s minority stockholders. Courts reason that where a “controlling stockholder” directs the actions of the board of directors, then the controlling stockholder also must share the board members’ fiduciary duty of loyalty to the corporation. In addition to majority stockholders, in even rarer circumstances, minority stockholders also have been deemed “controlling stockholders” when they are found to have “actual control” of the corporation’s decision-making such that they are “no differently situated than if they had majority voting control.”