Does a Project Manager Have a Fiduciary Duty?

At Musings on Project Management, John Goodpasture recently posted his reflections on whether the project manager is a fiduciary. He asks the rhetorical questions, “At some point, some ox is going to get gored. And then who blames the fiduciary? And to what risk is the fiduciary held?”

It’s an interesting question, and it seems the answer, like most questions rooted in law, depends on jurisdiction. Note that this is not legal advice and I am not an attorney—I’m just some guy with a little knowledge of employment practices in a few countries. An actual labor attorney could fill at least ten pages with critical comments on the next few paragraphs before pausing to refill her coffee cup. That caveat aside here is my response.

USA

In the US, every state but Montana has adopted the doctrine of employment at will. In other words: an employee can be terminated at any time, for any reason—with a few exceptions spelled out by law. That uniquely American principle aside, all employees, including at-will employees, are subject to the law of agency—they are agents of their employers. As such, they are subject to the general fiduciary principle, which centers on loyalty: the employee will not compete with their employer, solicit the employer’s customers, clients or employees prior to the leaving the company, use work time to further the employee’s own interests, or misappropriate confidential information or trade secrets of the employer by sharing that information with the new employers. There is also a duty to account for profits and to deal fairly with his or her employer in all transactions between them. Finally, there is usually a duty to disclose the existence of conflicts or adverse information to the employer, even if the employer is not harmed by the undisclosed adverse interest or information.

Donald TrumpNote that this fiduciary relationship is between employer and employee, rather than between subordinate and manager. Also, note that the duties constrain the actions of the fiduciary; they do not contemplate outcomes. While you can certainly be terminated in the general outrage over the impact a project might have on some power center of your company, that possibility arises from at-will employment, rather than the fiduciary duty. In other words: they can fire you, but they can’t sue you to recover damages.

UK

In the UK, the terms of employment are governed by contract, whether explicit or implicit. In the event of a dispute where no contract document exists, the courts will decide what the terms of the contract are by reviewing the Employment Statement and other supporting relevant material. While you can be dismissed at any time, the employer must show that they have a justifiable, valid reason and that they acted reasonably, given the circumstances.

Under UK common law, the officers and directors of a company have a fiduciary duty to the corporation, while the employees generally do not. In the recent UK case of Ransom v Customer Systems Plc, the Court of Appeal found that the employee’s contract did not create duties equivalent to the loyalty required of a fiduciary.  In an ordinary employment contract, the employee and employer must have regard to each other’s interests, whereas employees are not required to subjugate their own interests, as is required of a director. Bottom line: you’re not a fiduciary and they can’t collect damages, and although you can be fired for a lot of reasons, most HR departments will overrule firing a PM simply because some senior person is pissed off.

Other Jurisdictions

The situation in Canada is similar to the UK, in that there is no employment at will and employment agreements prevail. While courts have found both employers and employee in violation of agency fiduciary obligations, in practice this has mostly been limited to self-dealing, soliciting former clients, and misusing proprietary information. While you can be terminated for misconduct, termination without cause generally requires notice and severance pay. So while you might be fired for pissing off some senior person, you’ll get a lovely parting gift. Australia and New Zealand are a bit more complex in terms of terminations, agency fiduciary obligations, and possible recovery of damages, but are generally similar to Canada, even though your parting gift will likely be capped.

In most non-English speaking jurisdictions, contracts are mandatory and employment is generally based on paternalistic principles. It would be shocking for someone to be fired for pissing off some senior person in the course of doing their job—no court would look kindly on the “because he pissed me off, that’s why” defense.

In closing: while you might be summarily fired in The Land of Trump, as you get further away, the risk diminishes considerably.

New PM Articles for the Week of January 16 – 22

New project management articles published on the web during the week of January 16 – 22. And this week’s video: Harry Hall shares a few ideas to improve our project cost management approach. Less than four minutes, safe for work.

Must read!

  • Kailash Awati examines the potential for data science to do considerable damage when we ignore social and ethical considerations. Weapons of math destruction, indeed!
  • Art Petty describes the “energy sinks” (the opposite of “source”) that burn us out and lists some actions we can take to turn them off.
  • Jesse Lynn Stoner suggests that humiliation might be a gift – a wake-up call – and quotes Gandhi’s comment on the proverb: the truth hurts.

Established Methods

  • Atif Qureshi curated responses to a request for predictions: what will be the top project management trends in 2017? Of course, he has his own predictions.
  • Leigh Espy shared a simple but complete scope statement template for download. Just name and Email required.
  • Mike Clayton posts a basket full of ideas that have nothing to do with project management that will nevertheless help us be more effective project managers.
  • Samuel Bacharach describes the characteristics of four type of influencers – Top Dogs, Gatekeepers, Gurus, and Players – who can make or break your project.
  • Mike Griffiths introduces a loose series of blog posts on the #NoProjects principle of continuous software development.
  • Kristyn Medeiros waxes poetic on the stoplight colors we use for status reporting.

Agile Methods

  • Stefan Wolpers curates his weekly list of Agile content, from Guerrilla Innovation to Kanban metrics to saying no to customers.
  • Craig Brown makes the case for still using Planning Poker, even after you’ve been using Agile methods for a while.
  • Derek Huether created an infographic that enumerates qualities of good and bad ScrumMasters.
  • Madhavi Ledalla sketches the “Art of the Scrum Master.”
  • The Clever PM articulates the challenges of trying to reliably predict the future behavior of your customers.
  • Donna Reed tells about Kaizen, or “change for the better,” and creating a high-maturity Agile culture based on continuous improvement.
  • Yona Gidalevitz describes the application of ethnographic research to UX design for users from a specific culture. There’s more to it than just translating words to their language.

Applied Leadership

  • Elizabeth Harrin reviews Gary Lloyd’s new book, “Business Leadership for IT projects.”
  • Wayne Turmel points out the obvious – of course a project manager is a people manager.
  • Kerry Wills reminds us to set the example: “Act what you expect.”

Technology and Techniques

  • Craig Smith interviews quality consultant Anne-Marie Charrett on context-driven testing, exploratory testing, and women in technology. Just 40 minutes, safe for work.
  • Cade Metz reports on the growing number of high-end physicists finding work in the software teams of Silicon Valley.
  • Jake Rhuede of Red Stag Fulfillment posted an interesting infographic on the ways artificial intelligence is infiltrating E-commerce.

Working and the Workplace

  • Tomas Chamorro-Premuzic and Adam Yearsley point out the types of work where people with high EQ are less effective.
  • Suzanne Lucas considers the case of the employee who refuses to answer (or even read) Emails in the evening.
  • Jennifer Aldrich explains why hiring for culture fit is not antithetical to hiring for diversity.
  • Jack Simpson notes that if you don’t finish what you’re working on, you’re not productive – you’re just busy.

Enjoy!

New PM Articles for the Week of January 9 – 15

New project management articles published on the web during the week of January 9 – 15. And this week’s video: the Jon Spear Band celebrates risk management (sort of) with “The Second Mouse Gets the Cheese.” Just 3:16 of jump blues, safe for work. Turn it up …

Must read!

  • Michael Lopp contemplates the illusion of productivity, the mindset of busy, and (his proposed cure) the Builder’s Mindset. Think of this as an intervention.
  • Liane Davey advises on managing a team that has been tasked with unrealistic targets. Ethical failures at Wells Fargo, Volkswagen, and so on arose from pressure to deliver, at all costs.
  • Nancy Settle-Murphy makes the case for proving that you are trustworthy and then tells you how.

Established Methods

  • Harry Hall gets us back to the basics of cost management. Great example, real life actions.
  • Elizabeth Harrin calendars the project management conferences planned for 2017, including some too far in the future to describe the content.
  • Mike Clayton lists fifty great project management blogs we should be following in 2017, including many new to me.
  • Frederic Lardinois reports that Atlassian Software (Jira and Confluence) is buying Trello in yet another round of consolidation in the project management software market.
  • David Robins points out the downside of online project management and collaboration software: empowering the uninitiated. Think “Jurassic Park.”
  • Glen Alleman goes into deep, technical detail on the Cone of Uncertainty, which is a metaphor for the process of reducing cost and schedule risk on projects.
  • Thomas Carney gives us a detailed course on quality assurance in software engineering.

Agile Methods

  • Stefan Wolpers shares his weekly Agile roundup: Scrum turns 21, product ownership (not just the role), and whether “priority” can be plural.
  • Cornelius Fichtner interviews NK Shrivastava on his PMI Global Congress presentation, Warning Signs that Agile Isn’t Working. Just 30 minutes, safe for work.
  • Marty Bradley addresses the new Agilista question: should the PMO go away?
  • Matteo Tontini describes learning to work as a team using Scrum, without a full-time product owner. Failure in three, two, one …
  • Moira Alexander posts a beginners FAQ on Agile project management. You almost certainly have a stakeholder that would benefit from this, so pass it along.

Applied Leadership

  • Seth Godin translates a sign at LaGuardia Airport from pompous bureaucratic to conversational English. Yes, you have permission to communicate like an actual person.
  • Coert Visser explains the Mother of All Biases: naïve realism. Includes a “count your fingers” exercise demonstrating how our perception is sharp in only a very narrow field.
  • Elise Stevens curates a list of resources for developing effective leadership skills.
  • Andy Kaufman reflects on influencing through questions. Just over six minutes, safe for work. A bit loud, but if you clicked on the Jon Spear Band tune …

Technology and Techniques

  • Jenna Hogue directs us to a presentation on cognitive computing (51 minutes, safe for work) but mercifully gives us an overview of the content.
  • Carnegie Mellon University has lined up four of the world’s best professional poker players to compete against an AI program. Sounds like “Her” meets “Casino Royale.”
  • Nilanjan Kar tutors us on creating an impactful PMO dashboard using Powerpoint. More interesting for the examples than the techniques, but worth reading.

Working and the Workplace

  • Kathleen O’Connor interviews Anna Schlegel, author of “Truly Global: The theory and practice of bringing your company to international markets.”
  • Ryan Ogilvie recounts a conversation with a colleague who was asked to ‘drop the hammer’ on people more often in her new role. Ryan’s counsel: choose your battles wisely.
  • Suzanne Lucas shares demotivating job descriptions penned by the people who do them. “I try to convince people in another time zone to talk to the person two cubicles away.”

Enjoy!