Which concept is closely related to the 'duty of care' expected of directors?

The concept of 'duty of care' is fundamentally tied to the responsibility that directors hold to make informed and prudent decisions on behalf of the organization they govern. This duty emphasizes the importance of acting in a manner that a reasonably prudent person would under similar circumstances. Thus, action based on the best available information is paramount, as it ensures that directors are making decisions grounded in relevant data and analysis rather than speculation or unfounded assumptions.

By seeking out and evaluating pertinent information before making decisions, directors demonstrate their commitment to fulfilling their fiduciary responsibilities. This not only serves the interests of the organization and its stakeholders but also helps to mitigate potential legal liabilities that may arise from decisions made without due diligence. Therefore, the emphasis on informed decision-making directly reflects the obligation encapsulated in the duty of care.