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B.STANDARD OF CARE
•Directors of for-profit corporations are held to
an objective standard of care under the Canada Business Corporations
Act (“CBCA”) and the Ontario Business Corporations
Act (“OBCA”)
•Like the CBCA and OBCA, the CNCA and
ONCA establish an objective standard of
care, i.e. “the care, diligence and skill
that a reasonably prudent person would
exercise in comparable circumstances”
§Known as the
“Business Judgment Rule”, the rule
protects directors and officers against hindsight
and second guessing by creditors and other
stakeholders, holding directors to a standard of
reasonableness, not perfection
§i.e. The court
will defer to the expertise of the directors
and will not interfere with reasonable business
decisions
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