Directors' Fiduciary Duties

(this is not yet cleaned up)

OK, here is the product of some research that I have been doing over time. These are bits and pieces that I have pulled together from various sources:

Committees' objectives:

Involving Board members in change:

Field Guide to Developing, Operating and Restoring Your Nonprofit Board $32


on Fiduciary duties:

The limitation of what is easily locatable on the internet is that the duties and loyalty that are deemed absolute get specified as being owed to the corporation or to the society. The terms "shareholders" or "members" are sometimes included in the language, and sometimes not.

There is seldom any clear internal distinction because what is "good" for a corporation or association or organization is ostensibly understood to be that which is "good" (or offers value to) its members, which is what is supposed to make the membership worthwhile.

To the extent that there may exist among a membership various subgroups, notwithstanding that a director may have been elected by a subgroup, the subgroups' needs must be recognized, and taken into consideration, but only taken to consideration.

A director in a representative role, while undertaking primarily to serve the whole, can assure members that various concerns had been presented and heard, and should be able to present to members the reasons why decisions were made, but need not have an individual record of voting presented to members in the way that may be required by legislatures.

BC Societies Act 25 (1) A director of a society must act honestly and in good faith and in the best interests of the society, and (b) exercise the care, diligence and skill of a reasonably prudent person, in exercising the powers and performing the functions as a director. 25 (2) The requirements of this section are in addition to, and not in derogation of, an enactment or rule of law or equity relating to the duties or liabilities of directors of a society.

Fiduciary duty is something that is difficult to concretely define, but it is something that applies to all members of all boards of directors. It is a legal concept that attempts to hold certain individuals, because of their status as an officer or director, to a higher standard that that of a normal business person. In order to gain an appreciation for the impact of the doctrine of fiduciary duty it will be helpful to discuss a hypothetical structure of a board of directors of a nonprofit association that services a particular industry.

The fiduciary obligation may be breached, although no corruption, dishonesty or bad faith is involved. The standard of duty required is for the agent to avoid placing himself in a situation where he may be tempted by his own private interests to disregard that of his principal and it is this corrupting tendency that the law condemns. [Citations omitted.]

Supreme Court of Canada Confirms Directors' Fiduciary Duties Are Owed to the Corporation November 10, 2004 "A welcome clarification of the duties owed by Canadian directors, the top court's decision in Peoples v. Wise also highlights the importance of transparency, diligence, prudence and process in reaching reasonable business decisions."

The Principal Fiduciary Duties of Boards of Directors


(nonfree) Directors' Digital Fiduciary Duties The author explores the potential legal and technical risks inherent in attempts to implement digital protection, considering how liability might arise for those who have fiduciary responsibility for sensitive information assets, including the emerging trend toward imposing liability where digital protections are severely deficient or digital security has been breached.

The Fiduciary Duties of Directors of Corporate General Partners; Ten Years After USACAFES March 27 2002 - some distinctions between fiduciary relationships – Trustees, Directors and Partners

Independent contractors and fiduciary duties

Officers and Directors Take Note: Don't Check Your Fiduciary Duties at the Door (includes non-member Fiduciaries e.g. legal advisors)

Fiduciary (Trustee) roles
Topic revision: 21 Sep 2009, JamesBusser
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