Financial Administration Act (R.S.C., 1985, c. F-11)

Act current to 2014-10-15 and last amended on 2014-10-01. Previous Versions

Duties

Marginal note:Duty of care of directors and officers
  •  (1) Every director and every officer of a Crown corporation in exercising his powers and performing his duties shall

    • (a) act honestly and in good faith with a view to the best interests of the corporation; and

    • (b) exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances.

  • Marginal note:Duty to comply

    (2) Every director and every officer of a parent Crown corporation or of a wholly-owned subsidiary of a parent Crown corporation shall comply with this Part, the regulations, the charter and by-laws of the corporation or subsidiary and any directive given to the corporation.

  • Marginal note:Reliance on statements

    (3) A director or officer is not liable for a breach of his duty under subsection (1) or (2) if he relies in good faith on

    • (a) financial statements of the Crown corporation represented to him by an officer of the corporation or in a written report of the auditor of the corporation as fairly reflecting the financial condition of the corporation; or

    • (b) a report of a lawyer, accountant, engineer, appraiser or other person whose position or profession lends credibility to a statement made by him.

  • 1984, c. 31, s. 11.
Marginal note:Disclosure of interest in contract
  •  (1) A director or officer of a Crown corporation who

    • (a) is a party to a material contract or proposed material contract with the corporation, or

    • (b) is a director or officer of, or has a material interest in any person who is a party to, a material contract or proposed material contract with the corporation,

    shall disclose in writing to the corporation or request to have entered in the minutes of a meeting of the board of directors thereof the nature and extent of his interest.

  • Marginal note:Time for disclosure by director

    (2) The disclosure required by subsection (1) shall be made, in the case of a director,

    • (a) at the meeting of the board of directors at which the proposed contract is first considered;

    • (b) if the director was not then interested in the proposed contract, at the first meeting of the board of directors after he becomes so interested;

    • (c) if the director becomes interested after the contract is made, at the first meeting of the board of directors after he becomes so interested; or

    • (d) if the director was interested in the contract before becoming a director, at the first meeting of the board of directors after he becomes a director.

  • Marginal note:Time for disclosure by officer

    (3) The disclosure required by subsection (1) shall be made, in the case of an officer who is not a director,

    • (a) forthwith after he becomes aware that the contract or proposed contract is to be considered or has been considered at a meeting of the board of directors;

    • (b) if the officer becomes interested after the contract is made, forthwith after he becomes so interested; or

    • (c) if the officer was interested in the contract before becoming an officer, forthwith after he becomes an officer.

  • Marginal note:Time for disclosure by director or officer

    (4) If a material contract or proposed material contract is one that, in the ordinary course of the business or activity of the Crown corporation, would not require approval by the board of directors, a director or officer shall disclose in writing to the corporation or request to have entered in the minutes of a meeting of the board of directors the nature and extent of his interest forthwith after the director or officer becomes aware of the contract or proposed contract.

  • Marginal note:Voting

    (5) A director referred to in subsection (1) shall not vote on any resolution to approve the contract unless the contract is

    • (a) an arrangement by way of security for money lent to or obligations undertaken by him for the benefit of the Crown corporation or a subsidiary of the Crown corporation;

    • (b) one relating primarily to his remuneration or benefits as a director, officer, employee or agent of the Crown corporation or a subsidiary of the Crown corporation;

    • (c) one for indemnity or insurance under section 119; or

    • (d) one with an affiliate of the Crown corporation.

  • Marginal note:Continuing disclosure

    (6) For the purposes of this section, a general notice to the board of directors by a director or officer, declaring that he is a director or officer of or has a material interest in a person and is to be regarded as interested in any contract made with that person, is a sufficient declaration of interest in relation to any contract so made.

  • Definition of “board of directors”

    (7) In this section and section 117, “board of directors” includes a committee of directors.

  • 1984, c. 31, s. 11.