Directors and officers also owe a duty of loyalty to their corporation. One aspect of this duty relates to self-dealing transactions. Another deals with taking a business opportunity of the corporation for their own benefit.

Just as in the case of violations of their duty of care, violation of their duty of loyalty may also result in lawsuits against directors or officers if their conduct injured the corporation or shareholders.

A typical way such liability is established is by a derivative lawsuit. This is a legal action filed by a shareholder on behalf of the corporation, on the theory that the corporation has been injured by the director's or officer's wrongdoing.

Derivative suits often allege that a director or office breached his duty of loyalty by a self-dealing transaction, such as a sale of corporate property at below fair-market value, or by usurping a corporate opportunity. Derivative suits may also allege that a director or officer violated his duty of due care.