Corporate governance refers to the way in which the business and the affairs of a corporation are carried out. Corporate governance is intended to make the division of power between corporate directors, corporate officers, and shareholders clear.
Directors of corporations are responsible for the overall strategic direction of the corporation and for making decisions accordingly. Officers are responsible for the day-to-day operations of the corporation. Both directors and officers must exercise the care, diligence, and skill that a reasonably prudent person would exercise in similar circumstances.
Where a director or an officer fails to meet these standards, he or she may be subject to a claim for oppression remedy or a derivative action. Such claims attract significant liability and have serious consequences.
Directors and officers have a fiduciary duty towards the corporation and must act with good faith, honesty, and loyalty. Directors and officers must, therefore, avoid conflicts of interest at all times and must always act in the best interest of the corporation. Where conflicts do arise, the directors and officers must disclose that they exist.
Directors who breach their fiduciary duty are subject to serious consequences.
In many cases, the corporation is considered a separate legal entity from its directors and officers, and the so-called “corporate veil” will protect the directors and officers from liability from actions they take in the corporation’s name.
However, there are a number of actions that directors and officers can be found personally liable for. These include:
If you are a director or an officer and have been subject to a claim, it is important to seek the advice of a knowledgeable corporate lawyer with significant experience advising corporate actors. At Milosevic Fiske LLP, our Toronto corporate lawyers have many years of experience acting on behalf of directors and officers in claims filed against them, including:
We have developed a reputation for professionalism and integrity that benefits our clients. We are committed to the highest standards of ethics and professional courtesy towards the courts, our clients, opposing counsel, and all other relevant parties.
If you are an officer or director of a corporation and a claim has been filed against you, contact the highly knowledgeable Toronto corporate lawyers at Milosevic Fiske LLP as soon as possible. Our goal is to immediately protect you, your reputation, and the health of the corporation. Call us at 416-916-1387 or contact us online.
Phone: (416) 916-1387