Directors' Duties In M&A

Directors have clear duties when acting for the corporation, particularly when choosing whether to engage in M&A.  Below is a brief summary of what duties directors owe to the corporation and how directors can uphold them in M&A.

Directors' duties

At all times, and particularly during M&A, directors have the following duties: (1) a duty to supervise; (2) fiduciary duties; and (3) a duty of care.

1. Duty to Supervise.  Directors have specific, statutory duties to manage the corporation. To satisfy this duty, directors may select a senior management team that is qualified and worthy of the director's trust.  However, directors are not relieved of their duties by simply delegating tasks and must continue to play an active role in the corporation.