Board Composition – Eligibility for the Position
This Article reviews the requirements imposed on the Board of Directors (the “Board”) of an Ontario or a Federally-incorporated company.
A private company is required to have at least 1 director on its Board. Larger companies, such as those that are public, are required to have at least 3 directors on the Board.
To be a director, one needs to,
(a) be 18 years of age or older;
(b) have capacity to manage his/her affairs or, in other words, not be deemed as mentally incapacitated;
(c) be an individual; and
(d) not have the status of a bankrupt.
If a person fails to meet any of the above-noted requirements, they are ineligible from being part of a company’s Board.
In addition to the above-noted requirements, the Board needs to have a certain number of resident Canadians. Specifically, at least 25.0% of the directors on the Board must be resident Canadians. If the Board has less than 4 directors, then at least 1 must be a resident Canadian.