Trust and Loan Companies Act (S.C. 1991, c. 45)

Marginal note:Duty to manage

• 161. (1) Subject to this Act, the directors of a company shall manage or supervise the management of the business and affairs of the company.

• Marginal note:Specific duties

  (2) Without limiting the generality of subsection (1), the directors of a company shall

  • (a) establish an audit committee to perform the duties referred to in subsections 198(3) and (4);

  • (b) establish a conduct review committee to perform the duties referred to in subsection 199(3);

  • (c) establish procedures to resolve conflicts of interest, including techniques for the identification of potential conflict situations and for restricting the use of confidential information;

  • (d) designate a committee of the board of directors to monitor the procedures referred to in paragraph (c);

  • (e) establish procedures to provide disclosure of information to customers of the company that is required to be disclosed by this Act and for dealing with complaints as required by subsection 441(1);

  • (f) designate a committee of the board of directors to monitor the procedures referred to in paragraph (e) and satisfy itself that they are being adhered to by the company; and

  • (g) establish investment and lending policies, standards and procedures in accordance with section 450.

• Marginal note:Exception

  (3) Paragraphs (2)(a) and (b) do not apply to the directors of a company if

  • (a) all the voting shares of the company, other than directors’ qualifying shares, if any, are beneficially owned by a Canadian financial institution described by any of paragraphs (a) to (d) of the definition “financial institution” in section 2; and

  • (b) the audit committee or the conduct review committee of the Canadian financial institution performs for and on behalf of the company all the functions that would otherwise be required to be performed by the audit committee or conduct review committee of the company under this Act.

Marginal note:Duty of care

• 162. (1) Every director and officer of a company in exercising any of the powers of a director or an officer and discharging any of the duties of a director or an officer shall

  • (a) act honestly and in good faith with a view to the best interests of the company; 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, officer and employee of a company shall comply with this Act, the regulations, the company’s incorporating instrument and the by-laws of the company.

• Marginal note:No exculpation

  (3) No provision in any contract, in any resolution or in the by-laws of a company relieves any director, officer or employee of the company from the duty to act in accordance with this Act and the regulations or relieves a director, officer or employee from liability for a breach thereof.