Boardroom Ready: Duties And Best Practices For Canadian Directors

Given the sweeping changes in global trade conditions and the evolving domestic landscape concerning environmental, social and governance issues, directors of corporations in Canada may wish to take this opportunity to revisit their legal responsibilities.

In this bulletin, we provide an overview of the duties and possible sources of liability for directors of corporations constituted under the Canada Business Corporations Act ("CBCA")¹ and the British Columbia Business Corporations Act ("BCBCA"),² as well as suggest best practices for directors to help mitigate their risk.³

Duties of a Director

Pursuant to the CBCA, every director of a corporation owes a duty of care and a fiduciary duty to the corporation. The fiduciary duty requires that the director act honestly and in good faith with a view to the best interests of the corporation,⁴ while the duty of care requires directors to exercise the care, diligence and skill that a reasonably prudent person would