Directors: Roles and Responsibilities Clarified

Under the BC Societies Act (the “Act”), directors of a society have clarified roles and responsibilities.

Directors must manage and supervise the activities and internal affairs of the society, subject to the Act, the regulations, and the bylaws. Like most modern corporate statutes, the functions and duties of directors are now set out in the Act.

Directors must always act honestly and in good faith with a view to the best interests of the society; and exercise the care, diligence and skill that a reasonably prudent individual would exercise in comparable circumstances.

Under the Act, directors must also make decisions in the best interest of the society, and do so with consideration of the purposes of the society. They must explicitly act in accordance with the Act, the regulations, and the bylaws; and ensure when exercising their powers and performing their functions as a director, they do so with consideration of the purposes of the society.

Persons performing the roles of directors are explicitly subject to their responsibilities. Subject to the regulations, if a person who is not a director or senior manager performs functions of a director, a number of provisions of the Act apply to them as if they were a director. These include the above noted duties, the conflict of interest provisions, employment and remuneration provisions and regulations, and liability and indemnity provisions.

Directors must disclose conflicts of interest. Subject to some exceptions, a director has an explicit duty to disclose a conflict of interest in a proposed or actual contract or transaction with the society where the director has a direct or indirect material interest in it, such as a consulting or services agreement, as well as in matter that is under consideration by the directors, if the director’s interest could create conflict with the director’s duty as a director of the society. Conflicts must be disclosed promptly, documented, the director must leave the meeting, abstain from voting, and take no action to influence the vote.

Photograph by K2 Space. Used under a Creative Commons license.

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