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Bank Act (S.C. 1991, c. 46)

Full Document:  

Act current to 2019-06-20 and last amended on 2019-06-17. Previous Versions

PART XVBank Holding Companies (continued)

DIVISION 6Corporate Governance (continued)

Directors and Officers (continued)

Marginal note:Remuneration of directors, officers and employees

  •  (1) Subject to this section and the by-laws, the directors of a bank holding company may fix the remuneration of the directors, officers and employees of the bank holding company.

  • 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.

  • 2001, c. 9, s. 183

Marginal note:Validity of acts

  •  (1) An act of a director or an officer of a bank holding 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.

  • Marginal note:Validity of acts

    (2) An act of the board of directors of a bank holding 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.

  • 2001, c. 9, s. 183

Marginal note:Right to attend meetings

 A director of a bank holding company is entitled to attend and to be heard at every meeting of shareholders.

  • 2001, c. 9, s. 183
Conflicts of Interest

Marginal note:Disclosure of interest

  •  (1) A director or officer of a bank holding company shall disclose to the bank holding 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 bank holding company, whether entered into or proposed, if they

    • (a) are a party to the contract or transaction;

    • (b) are a director or officer of a party to the contract or transaction or a person acting in a similar capacity; or

    • (c) have a material interest in a party to the contract or transaction.

  • 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 required by subsection (1) 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 bank holding company’s business would not require approval by the directors or shareholders, the director or officer shall disclose to the bank holding 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.

  • 2001, c. 9, s. 183
  • 2005, c. 54, s. 110

Marginal note:Director to abstain

  •  (1) A director who is required to make a disclosure under subsection 789(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 bank holding company, an entity controlled by the bank holding company or an entity in which the bank holding company has a substantial investment;

    • (b) is for indemnity under section 799 or insurance under section 800; or

    • (c) is with an affiliate of the bank holding company.

  • Marginal note:Ineligibility

    (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 bank holding company, any insurance holding company or 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 bank holding 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.

  • 2001, c. 9, s. 183
  • 2005, c. 54, s. 111

Marginal note:General notice

  •  (1) For the purposes of subsection 789(1), a general notice to the directors declaring that a director or officer is to be regarded as interested for any of the following reasons in a contract or transaction entered into with a party is a sufficient declaration of interest in relation to any contract or transaction with that party:

    • (a) the director or officer is a director or officer of a party referred to in paragraph 789(1)(b) or (c) or a person acting in a similar capacity;

    • (b) the director or officer has a material interest in the party; or

    • (c) there has been a material change in the nature of the director’s or officer’s interest in the party.

  • Marginal note:Access to disclosures

    (2) The shareholders of the bank holding company may examine the portions of any minutes of meetings of directors or committees of directors that contain disclosures under subsection 789(1), or the portions of any other documents that contain those disclosures, during the usual business hours of the bank holding company.

  • 2001, c. 9, s. 183
  • 2005, c. 54, s. 112

Marginal note:Avoidance standards

  •  (1) A contract or transaction for which disclosure is required under subsection 789(1) is not invalid and a director or officer is not accountable to the bank holding company or its shareholders for any profit realized from it by reason only of the director’s or officer’s interest in the contract or transaction or the fact that the director was present or was counted to determine whether a quorum existed at the meeting of directors, or of a committee of directors, that considered it if

    • (a) the director or officer disclosed their interest in accordance with section 789 and subsection 791(1);

    • (b) the directors approved the contract or transaction; and

    • (c) the contract or transaction was reasonable and fair to the bank holding company at the time that it was approved.

  • Marginal note:Confirmation by shareholders

    (2) Even if the conditions set out in subsection (1) are not met, a director or officer acting honestly and in good faith is not accountable to the bank holding company or its shareholders for any profit realized from a contract or transaction for which disclosure was required and the contract or transaction is not invalid by reason only of the director’s or officer’s interest in it if

    • (a) the contract or transaction is approved or confirmed by special resolution at a meeting of shareholders;

    • (b) disclosure of the interest was made to the shareholders in a manner sufficient to indicate its nature before the contract or transaction was approved or confirmed; and

    • (c) the contract or transaction was reasonable and fair to the bank holding company at the time that it was approved or confirmed.

  • 2001, c. 9, s. 183
  • 2005, c. 54, s. 112
 
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