PART VICorporate Governance (continued)
Directors and Officers (continued)
Directors and Officers — Authority
Marginal note:Chief executive officer
200 (1) The directors of a company shall appoint from their number a chief executive officer who must be ordinarily resident in Canada and, subject to section 202, may delegate to that officer any of the powers of the directors.
(2) Subsection (1) does not apply in respect of a former-Act company whose shareholders are confined to entities incorporated or formed by or under an Act of Parliament or of the legislature of a province that are, in the opinion of the directors, operating as credit unions or cooperative associations.
Marginal note:Appointment of officers
201 (1) The directors of a company may, subject to the by-laws, designate the offices of the company, appoint officers thereto, specify the duties of those officers and delegate to them powers, subject to section 202, to manage the business and affairs of the company.
Marginal note:Directors as officers
(2) Subject to section 168, a director of a company may be appointed to any office of the company.
Marginal note:Two or more offices
(3) Two or more offices of a company may be held by the same person.
Marginal note:Limits on power to delegate
202 The directors of a company may not delegate any of the following powers, namely, the power to
(a) submit to the shareholders a question or matter requiring the approval of the shareholders;
(b) fill a vacancy among the directors, on a committee of directors or in the office of auditor, or appoint additional directors;
(c) issue or cause to be issued securities, including an issue of shares of a series that is authorized in accordance with section 65, except in accordance with any authorization made by the directors;
(d) declare a dividend;
(e) authorize the redemption or other acquisition by the company pursuant to section 74 of shares issued by the company;
(f) authorize the payment of a commission on a share issue;
(g) approve a management proxy circular;
(h) except as provided in this Act, approve the annual statement of the company and any other financial statements issued by the company; or
(i) adopt, amend or repeal by-laws.
- 1991, c. 45, s. 202
- 1997, c. 15, s. 362
- 2005, c. 54, s. 403
Marginal note:Exercise of trustee powers
203 (1) Where authorized to do so by a special resolution, the directors of a company that is a trust company pursuant to subsection 57(2) may delegate, with or without the power of sub-delegation, to the chief executive officer of the company, the exercise of all or any of the powers or authorities of the company, whether discretionary or otherwise, arising out of any will, trust, deed, contract or other instrument creating a trust.
Marginal note:Performance by company
(2) The exercise of any power or authority referred to in subsection (1) by the chief executive officer or that officer’s delegate, if any, constitutes an exercise of the power or authority by the company.
Marginal note:Remuneration of directors, officers and employees
Marginal note:By-law required
(2) No remuneration shall be paid to a director as director until a by-law fixing the aggregate of all amounts that may be paid to all directors in respect of directors’ remuneration during a fixed period of time has been confirmed by special resolution.
- 1991, c. 45, s. 204
- 1994, c. 26, s. 74
Marginal note:Validity of acts
205 (1) An act of a director or an officer of a company is valid notwithstanding a defect in the director’s qualification or an irregularity in the director’s election or in the appointment of the director or officer.
(2) An act of the board of directors of a company is valid notwithstanding a defect in the composition of the board or an irregularity in the election of the board or in the appointment of a member of the board.
Marginal note:Right to attend meetings
206 A director of a company is entitled to attend and to be heard at every meeting of shareholders.
Conflicts of Interest
Marginal note:Disclosure of interest
207 (1) A director or officer of a company shall disclose to the company, in writing or by requesting to have it entered in the minutes of a meeting of directors or a meeting of a committee of directors, the nature and extent of any interest they have in a material contract or material transaction with the company, whether entered into or proposed, if they
Marginal note:Time of disclosure — director
(2) The disclosure shall be made in the case of a director
(a) at the meeting of directors, or of a committee of directors, at which the proposed contract or transaction is first considered;
(b) if at the time of the meeting referred to in paragraph (a) the director was not interested in the proposed contract or transaction, at the first one after they become interested in it;
(c) if the director becomes interested after a contract or transaction is entered into, at the first one after they become interested; or
(d) if a person who is interested in a contract or transaction becomes a director, at the first one after they become a director.
Marginal note:Time of disclosure — officer
(3) The disclosure shall be made in the case of an officer who is not a director
(a) immediately after they become aware that the contract, transaction, proposed contract or proposed transaction is to be considered or has been considered at a meeting of directors or of a committee of directors;
(b) if they become interested after the contract or transaction is entered into, immediately after they become interested; or
(c) if a person who is interested in a contract or transaction becomes an officer, immediately after they become an officer.
Marginal note:Time of disclosure — contract not requiring approval
(4) If the material contract or material transaction, whether entered into or proposed, is one that in the ordinary course of the company’s business would not require approval by the directors or shareholders, the director or officer shall disclose to the company, in writing or by requesting to have it entered in the minutes of a meeting of directors or of a committee of directors, the nature and extent of their interest immediately after they become aware of the contract or transaction.
- 1991, c. 45, s. 207
- 2005, c. 54, s. 404
Marginal note:Director to abstain
208 (1) A director who is required to make a disclosure under subsection 207(1) shall not be present at any meeting of directors, or of a committee of directors, while the contract or transaction is being considered or vote on any resolution to approve it unless the contract or transaction
(a) relates primarily to their remuneration as a director, officer, employee or agent of the company, an entity controlled by the company or an entity in which the company has a substantial investment;
(b) is for indemnity under section 217 or insurance under section 218; or
(c) is with an affiliate of the company.
(2) Any director who knowingly contravenes subsection (1) ceases to hold office as director and is not eligible, for a period of five years after the date on which the contravention occurred, for election or appointment as a director of any financial institution that is incorporated or formed by or under an Act of Parliament.
Marginal note:Validity of acts
(3) An act of the board of directors of a company or of a committee of the board of directors is not invalid because a person acting as a director had ceased under subsection (2) to hold office as a director.
- 1991, c. 45, s. 208
- 1997, c. 15, s. 363
- 2005, c. 54, s. 405
- Date modified: