What responsibility does a company director owe to its shareholders?

A company director has a fiduciary duty to act in the best interests of the company and its shareholders. This principle often encompasses the responsibility to avoid personal gains at the shareholders' expense, as directors must prioritize the company's interests when making decisions. By doing so, they uphold their duty of loyalty and care to the shareholders, ensuring that their actions do not exploit their position for personal benefit.

This responsibility reflects the overarching principle that directors should act transparently and in good faith, with a focus on the company’s long-term success, which ultimately benefits the shareholders as well. Directors can be held accountable if they engage in self-dealing or make decisions that favor their personal interests over those of the shareholders, thus violating their fiduciary duty.

In contrast, the other options suggest obligations that may not fully capture the essence of a director’s responsibilities. For instance, while maximizing dividends can be a goal, it is not an absolute obligation; directors must consider the company’s profitability and sustainability. Settling company debts is also essential, but this is a broader financial management responsibility. Lastly, managing internal conflicts is important for company governance but does not directly encapsulate the core responsibility of a director towards the shareholders specifically.