The duty of loyalty requires a director or officer to put the corporation's interests ahead of their own whenever the two conflict. It covers self-dealing transactions, usurping corporate opportunities, competing with the corporation, and using confidential corporate information for personal gain. Unlike the duty of care, loyalty claims cannot be limited or eliminated by a charter exculpation provision, because the concern is misappropriation, not honest error.

A loyalty breach typically strips away any business judgment rule protection and shifts the case toward entire fairness review, since the whole premise of the deferential presumption — that the decision-maker had no personal stake — no longer holds. Fiduciaries can often cure a potential conflict prospectively through full disclosure and approval by disinterested directors or shareholders, which is why disclosure practices are central to loyalty defense.

Because loyalty claims usually hinge on whether a conflict existed and whether it was disclosed and approved, rather than on the quality of the underlying business decision, Juricratic separates the conflict-and-disclosure question from the fairness-of-outcome question as two distinct dials, letting a user see how curing the disclosure gap alone changes the projected exposure even before the transaction's economics are examined.

Plaintiffs plead a duty of loyalty breach specifically to defeat business judgment deference and to reach entire fairness or, in egregious cases, to pursue personal liability that a charter exculpation clause cannot shield. Boards and general counsel build conflict-disclosure and recusal procedures into governance practice precisely to be able to show any potential loyalty issue was cured before the fact.