Which principle requires individuals in authority to act in the best interests of all stakeholders?

The principle that requires individuals in authority to act in the best interests of all stakeholders is fiduciary responsibility. This concept is rooted in the trust placed in individuals who have the power to manage or oversee the assets or interests of others, such as shareholders, employees, and the community. It mandates that these individuals prioritize the well-being of the stakeholders over their personal interests or gains.

Fiduciary responsibility encompasses several key duties, including the duty of care, meaning that those in authority should make informed and prudent decisions, and the duty of loyalty, which requires them to avoid conflicts of interest and act solely for the benefit of the stakeholders. This principle is foundational in corporate settings, ensuring that leaders maintain ethical standards and transparency while making decisions that can significantly impact various parties involved.

In contrast, options like due diligence refer to the process of thoroughly investigating and evaluating a potential investment or business decision, corporate governance defines the systems and processes that control and direct an organization, while accountability involves the obligation of individuals to answer for their actions and decisions. Although these concepts are related and can overlap with fiduciary duties, they do not specifically encapsulate the broad obligation to act in the best interests of all stakeholders as fiduciary responsibility does.