Page 11 - Profmark_2024_Directors Guide

NATURE AND DEFINITION OF A DIRECTOR

Nature of a Director
The directors of a company are the key people entrusted by law with the function of
administering the company and are central to ensuring good corporate governance in the
company.
The director functions as both a trustee and a consultant:
■ A director is required to have the experience, skill, time and ability necessary to carry
out his functions effectively, and should place the interests of the company first,
similar to that of a “consultant”
■ At common law, directors owe fiduciary duties and obligations of care and skill to the
company, which are similar to that of a “trustee”.

Definition of a Director
The Act extends the definition of “director” to include others, which has particular impact
in regard to duties, potential liability and responsibility of directors and officers.
The definition of “director” in the Act includes a member of a board of a company, or an
alternate director of a company, and includes any person occupying the position of a
director or alternate director, by whatever name designated.
The definition is extended to include a prescribed officer, a person who is a member of a
committee of a board of a company, or the audit committee of a company (irrespective
of whether or not the person is also a member of the company’s board).
For purposes of Section 69 (qualification and eligibility), Section 76 (standards of
directors’ conduct), Section 77 (directors’ liability), Section 78 (indemnification and
directors’ insurance), the definition of “director” is extended to include an alternate
director, prescribed officer, a person who is a member of a committee of a board of a
company, or is a member of the audit committee of a company (irrespective of whether
or not the person is also a member of the company’s board).
With reference to indemnification and directors’ insurance, the definition also includes
former director(s). Section 75 also extends the definition of director to certain persons,
as more clearly defined on page 29.
Those designated officers as described above are subject to the same standards of
conduct, duties of care, skill and diligence and fiduciary duties as directors, and will be
held jointly and severally liable with directors. The MOI and any additional rules are also
specifically binding between the company and such officers.

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