Step 1: Understanding Failure Theories.
The maximum principal stress theory is regarded as the most conservative failure theory for ductile materials. This theory posits that failure initiates when the highest principal stress equals the material's ultimate tensile strength.
Step 2: Conclusion.
Consequently, the maximum principal stress theory is the most conservative failure theory for ductile materials. This validates option (1) as the correct selection.
Final Answer:
\[
\boxed{1. \, \text{Maximum principal stress theory}}
\]