Page 31 - Directors manual final

or self-dealings must be avoided and that confidentiality must be maintained. Furthermore, direc-
tors must exercise their powers only for a proper purpose, a purpose relating to the honest pursuit
of the best interests of the corporation, and not for the director's own or other collateral or improper
purposes ...

Directors cannot profit at the expense of the corporation. They cannot divert opportunities or bene-
fits from the corporation to themselves or put themselves in a position of conflict ...

They cannot use their position to acquire other benefits for themselves. Any other benefits, such
as contracts or property that directors receive through their position as directors, belong to the cor-
poration. The directors are accountable to the corporation for these benefits. The profits (and quite
probably, the contract or property itself) belong to the corporation, even if the directors believed
that they were acting In good faith or to the corporation's advantage ...

Directors are prohibited from appropriating opportunities that belong to the corporation. Directors
who take advantage of opportunities that they became aware of as a result of their position with
the corporation {whether or not the corporation might have had an interest in pursuing the opportu-
nities) are in breach of their fiduciary
duties ... ".3

Potential Personal Liability of the Director Who Has the Conflict of Interest or Otherwise
Contravenes His/Her Duties

While Section 57 of the Societies Act relieves the interested Director for personal liability pursuant to
Section 57 if complied with, Section 57 does not relieve the Director from liability for breaching any

relevant provisions of the Red Door's Bylaw's. The Bylaws establish additional requirements that the
Directors must fulfill over and above the bar established in Sections 56 and 57 of the Societies Act.

Also, Section 53 of The Societies Act requires all Directors of Red Door to, among other things, act

honestly and in good faith with a view to the best interests of Red Door, and to act in accordance with
the Societies Act and Red Doors' Bylaws.

There is therefore a risk of personal liability on the part of not only a Director who contravenes the
Societies Act or Bylaws but also other Directors who may allow the contravention.

RDHS Directors Manual 31