Non-competition duty of executive officers / directors of public corporations

Abstract

This article contains a critical analysis of the fiduciary duties of executive officers of public corporations, as established by Chilean Public Corporations Act. According to the author, the crystallizations of fiduciary duty should have been clearly stated in the law, in order to give transparency to the directors’ managerial process in public corporations, and also to favor the protection of corporate interest over the direct or indirect interest of directors. Therefore, the explicit enunciation by the law of the non-competition duty for public corporation directors, is considered as indispensable; managers, either directly or indirectly, should not exploit the same, analogous or complementary objects of the corporation they administer, since, without such a prohibition, they would hardly fulfill the corporation interests faithfully.