Alberta's Bill 84, Business Corporations Amendment Act ("Bill 84"), which received Royal assent on December 2, 2021 and is expected to come into force in early 2022, amends the Business Corporations Act to expand protections for directors and officers of Alberta corporations.
Under the current legislation in Alberta, directors are shielded from liability where they rely in good faith on an opinion or report of a credible professional. However, notably, the outgoing legislation is limited to professions, including accountants, lawyers, engineers, and appraisers. Now this provision has been expanded to say that a director may rely on the opinion or report of "a person, including a lawyer, accountant [etc.] or employee of the corporation, whose profession or expertise lends credibility".
The changes now permit a director to rely on non-professionals and employees, provided the non-professional's or employee's expertise lends credibility to their report. This may be quite useful for a director's reliance on highly-skilled technicians such as computer programmers or employees who may not be considered "professionals" but may still be the best source of reliable information.
Practically, this is likely already happening, so it is nice to see the legislation more accurately reflecting reality.
Directors and officers are also afforded greater protections for indemnification from the corporation, as they may now be indemnified by the corporation for "investigative" proceedings in addition to civil, criminal, and administrative proceedings.
Another change to the ABCA involves insurance for directors and officers. Previously, a director or officer could be insured against liability for losses incurred in the person's capacity as a director of officer, except where the director or officer failed to act honestly and in good faith with a view to the best interests of the corporation. Now, there is no requirement that a director or officer act in good faith, honestly, and with a view to the best interests of the corporation. This means a director or officer can now be insured against more claims, although it remains to be seen if insurers will offer such increased coverage.
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