What does a director's duty of honesty require?

A director's duty of honesty encompasses a requirement for transparency and integrity in their dealings, not just with shareholders but critically with all stakeholders, including fellow directors. This duty includes the imperative to avoid secret profits, as directors must act in the best interests of the corporation rather than for personal gain.

Honesty entails providing accurate and truthful information, which fosters trust and collaboration among the board members and throughout the company. By avoiding secret profits, directors uphold the overarching principles of good governance and fiduciary responsibility. Therefore, this duty is about ensuring that all transactions and decisions are made transparently and ethically, ready to be scrutinized by fellow directors and in alignment with the company's best interests.

In contrast, exclusive transparency only with shareholders would neglect the essential aspect of teamwork within the board. Minimal communication could lead to a lack of accountability and misunderstanding among directors, while confidentiality about company affairs does not align with the requirement for open and honest communication when such matters impact the company's interests and governance.