The COVID-19 pandemic has affected, and continues to affect,
Canadian businesses in a significant manner. As this situation
continues to evolve, directors should remain cognizant of their
duties and responsibilities as corporations face a range of
challenges, including liquidity issues.
Directors' Duties
Under Canadian law, directors generally have the responsibility
to manage, or supervise the management of, the business and affairs
of a corporation. In discharging these responsibilities, the courts
will generally defer to the business judgement of the directors and
not second guess reasonable business decisions that have a proper
corporate purpose, are taken after having made a reasonable and
informed investigation (including input from management and
external advisors), lie within a range of reasonable alternatives
and are made in good faith and in the absence of conflicts of
interest, with the honest belief that the action is in the best
interests of the
