What Are the Duties of a Board of Directors in Canada?
Canadian directors owe statutory and fiduciary duties that generally include care, loyalty and acting honestly in the organization’s interests.
A Canadian director’s exact duties come from the statute governing the organization, its articles and bylaws, and the common law. For a corporation governed by the Canada Business Corporations Act (CBCA), the central duties are to act honestly and in good faith with a view to the corporation’s best interests and to exercise the care, diligence and skill of a reasonably prudent person in comparable circumstances. Other corporate, co-operative and non-profit statutes use related—but not always identical—rules. “Canadian board” is not a single legal category. A federally incorporated business corporation may be governed by the CBCA. A provincial corporation, society, co-operative, condominium corporation, charity or public body may be governed by a different statute and additional sector rules. Those sources determine the required process, conflict rules, available defences and potential remedies.
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