Question to be answered : Apply the concept of fiduciary duty to the following scenario:

"Walt Disney Derivative Litigation: The Walt Disney Company appointed Michael Ovitz as executive president and director. He had founded Creative Artists Agency, a premier Hollywood talent finder. He had an income of $20m. Michael Eisner, the chairman, wanted him to join Disney in 1995, and negotiated with him on compensation, led by Disney compensation committee chair Irwin Russell. The other members of the committee and the board were not told until the negotiations were well underway. Ovitz insisted his pay would go up if things went well, and an exit package if things did not. It totalled about $24 million a year. Irwin Russell cautioned that the pay was significantly above normal levels and 'will raise very strong criticism'. Graef Crystal, a compensation expert, warned that Ovitz was getting 'low risk and high return' but the report was not approved by the whole board or the committee.

In August 1995 Eisner released to the press the appointment, before the compensation committee had formally met to discuss it. Russell, Raymond Watson, Sidney Poitier and Ignacio E. Lozano, Jr. met on 26 September for an hour. They discussed four other major items and the consultant, Crystal, was not invited. Within a year Ovitz lost Eisner's confidence and terminated his contract. Ovitz walked away with $140m for a year's work. Shareholders brought a derivative suit."