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.


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.


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 Post at AITS: On Being Intrepid as a Project Manager

My latest article for AITS was published today: On Being Intrepid as a Project Manager.

The word “intrepid” comes from Latin and means “not alarmed.” I often say my primary contribution to a project is being a calming influence. Intrepid behavior – the ability to perform effectively under conditions of uncertainty in complex environments and difficult circumstances – is often what the team needs most from the leads, project manager, and sponsor. Practical applications include risk management, stakeholder engagement, and of course, dealing with financial and other resource constraints. If you have comments on this thought, please leave a comment at AITS. If you have suggestions for future topics, please leave a comment here.

As always, thanks for taking the time to read my stuff.

New PM Articles for the Week of August 1 – 7

New project management articles published on the web during the week of August 1 – 7. And this week’s video: Dennis Nally, Chairman of PricewaterhouseCoopers International Ltd. introduces the key findings from PwC’s 19th Annual Global CEO Survey. Less than six minutes, safe for work, and valuable for understanding your organization’s global operating environment.

Must read (or hear)!

  • Dave Prior interviews psychologist Krista Pierce and PM Carson Pierce on ways to deal with the pressure, angst, and anxiety that come with the PM job. Just 42 minutes, safe for work.
  • Elizabeth Harrin takes a moment to reflect on the stresses in her career and balance with her family life. Naturally, she has a plan.
  • Conner Forrest reports on actions that US Homeland Security Secretary Jeh Johnson is taking to secure electronic voting systems in the 9,000 jurisdictions around the country.

Established Methods

  • John Goodpasture examines extreme risks: those for which the consequences are irreversible, and the impact is near-catastrophic. Fortunately, the probability is usually low.
  • Andy Jordan introduces the concepts of enterprise risk and portfolio risk distribution.
  • Harry Hall has assembled a list of diagnostic questions to ask when a project is troubled.
  • Helena Liu maps out the steps to take when a project starts to go wrong.
  • Ron Rosenhead points out one possible reason for “zombie projects:” a widespread management belief in inevitable success.
  • Binfire has just published their project management software buyer’s guide. It’s about the process of selecting what you need and makes no product recommendations.
  • Seth Godin reminds us what’s at stake when reviewing a contract.

Agile Methods

  • Stefan Wolpers shares his curated reading list of Agile content for the week. Like this one, but focused on Agile methods.
  • Henny Portman reviews the second edition of Andrew Craddock’s “Agile Project Management and Scrum.”
  • Jeff Collins decomposes the introduction of Agile project management processes into existing organizations into five key steps.
  • Erich Orozco makes the case for not sharing people across teams.
  • Shuba Kathikeyan explains the Six Sigma DMAIC framework, certification sources, and the various Lean Six Sigma belts.

Applied Leadership

  • Joel Peterson, chairman of JetBlue, shares some suggestions for creating an organizational culture in which trust is secured by accountability.
  • John Carroll takes a Taoist look at servant leadership.
  • Nancy Settle-Murphy focuses on the end of the meeting: action assignments and next steps.
  • Gina Abudi completes parts four and five of her series on leading teams through Tuckman’s four stages of team development.
  • Jesse Lynn Stoner explains some of the causes for smart people to make dumb decisions.

Working and the Workplace

  • Johanna Rothman makes the case for hiring older workers. Hey, Dos Equis hired Jonathan Goldsmith to portray The Most Interesting Man in the World at age 67.
  • Margaret Meloni explains why a respect for organizational culture is necessary to prevent failure on a new job.
  • Cornelius Fichtner interviews Niraj Kumar on the wide range of benefits to achieving the PMP credential. Just 31 minutes, safe for work.
  • Sarah White shares some insights on how you can maximize the impact of your resume, based on current recruitment practices and trends.
  • Art Petty: “Seeking next is the new state of normal for most of us in our careers and almost all of us in our businesses.”