The two components of fiduciary duty for a board are:

• A. Avoiding conflicts of interest and acting as reasonable people in managing the association.
• B. Maximizing profits and reducing resident services.
• C. Delegating all authority to the manager and not informing owners.
• D. Maintaining reserve funds and controlling all expenditures personally.

Answer: (A)

Fiduciary duty for a board rests on two responsibilities: loyalty and care. Loyalty means avoiding conflicts of interest and always acting in the association’s best interests, not pursuing personal gain. Care means handling the association’s affairs as a prudent, reasonable person would—making informed, diligent decisions and supervising operations responsibly. The correct choice captures both elements: avoiding conflicts of interest (loyalty) and acting as reasonable people in managing the association (care). Other options misstate the duties—maximizing profits isn’t the board’s aim when serving residents; delegating all authority and not informing owners undermines oversight and transparency; and while prudent financial management is important, personally controlling all expenditures isn’t the proper governance approach.