DIRECTOR LIABILITY
THE
LIABILITY
OF DIRECTORS
IN CANADA
LAWS ON DIRECTOR LIABILITY AND FOREIGN
CORRUPTION ARE CONVERGING TOWARD
A COMMON STANDARD AS BUSINESS
OPERATIONS BECOME MORE GLOBALIZED,
BUT THERE ARE STILL KEY DIFFERENCES IN
THE LAW BETWEEN CANADA AND THE US
BY BRIAN BURTON
PHOTO: REUTERS
MOST CORPORATE DIRECTORS wouldn't dream of making latenight forays down back alleys in the seamier districts of third-world capitals. But they often
do the corporate equivalent — signing on as directors of emerging-market companies whose
operations and inner financial workings are less than perfectly transparent.
Directors are also exposed to elevated risks when the biggest and best-known domestic corporations venture into emerging markets, where entrenched business practices demand off-book
payments to everyone from customs agents to government ministers.
In an increasingly global economy, laws on director liability and foreign corruption are
converging toward a common standard. But lawyers say we aren't there yet and a director's treatment before a court of law may be very different depending on whether that court is in Canada
or the United States.
Hair-raising headlines in both countries are highlighting the differences and similarities in
the ways emerging-market imbroglios are treated by the two legal systems and the kinds of risks
US citizens face if they find themselves subject to Canadian laws relating to director liability.
www.lexpert.ca | LEXPERT • December 2013 | 11
