Contentious Issues in the Boardroom – August 2026 Edition

I'm pleased to announce the publication of the August 2026 edition of the Directors' Briefing, available via LexisNexis. Co-authored by myself and Jacob Cawker, this issue explores several pressing issues in business law and issues that may be faced by corporate directors.

Highlights from this Issue:

Piercing the Corporate Veil After Chanderpaul

In Chanderpaul v. Caesars Convention Centre Ltd., the Court of Appeal for Ontario confirmed that the corporate veil may be pierced where those in control of a corporation expressly direct a wrongful act to be done by the company, regardless of whether that conduct falls within their role as directing minds. While the court declined to pierce the veil on the facts, the decision is a reminder that separate corporate personality is not automatically preserved simply because the alleged wrongdoing occurs in the ordinary course of business, and that owner-operators face exposure where they dominate a corporation and use it as a shield.

Fiduciary Duty and Proper Purpose

The UK High Court's decision in Gardner Aerospace Holdings Ltd v. Upton examines the duties a director owes to promote the success of the company, to exercise powers only for their proper purpose, and to avoid conflicts of interest, in a case where a senior executive was found to have worked to defeat a board-approved transaction in order to preserve his own position. The decision reinforces a principle also codified in Canadian law: a director's duty runs to the corporation itself, which may not always align with the interests of a controlling shareholder.

Directors' Duty to Escalate Risk

In the Australian Star Entertainment proceedings, Australian Securities and Investments Commission v. Bekier, the Federal Court held that senior officers breached their duty of care by allowing the board to remain uninformed of material legal and regulatory risks. The decision confirms that executives cannot discharge their obligations by leaving risks for others to raise, that vague references in board papers to unspecified "concerns" should prompt directors to seek clarification, and, notably, that the use of artificial intelligence to navigate board materials should be governed by board policy and cannot displace human judgment.

Oppression in the Closely Held Company

In Tassone v. Smith, the Supreme Court of British Columbia found that a controlling director had conducted a family holding company's affairs oppressively toward a minority shareholder, through a failure to hold annual meetings or prepare financial statements, unequal dividends declared on no rational basis, and asset sales to related parties without independent valuation. Statutory compliance cannot be waived on grounds of cost, and a closely held corporation cannot be run as though it were the personal property of the person in control.

If you would like a copy of this issue, please email Laura Wolfe directly or if you subscribe to LexisNexis, the issue can be found here.