I think that it may be possible for a corporation to be a shadow director of another corporation. A key distinction between a shadow and de facto director is the fact that a shadow director claims not to be a director. Since they are not purporting to be an actual director of the company they would not have to worry about fitting within the guidelines of what constitutes a director under CBCA s.2(1) and BCBCA s.1(1) (though they aren’t very helpful to begin with).
In addition, since the corporation is not actually a director, they don’t have to have the best interest of the other corporation in mind. The corporation could try and push their own agenda on to directors of another company for their own benefit. Moreover, with parent and subsidiary companies, I think that it is quite natural that a parent company may have a strong opinion about the business of their subsidiary company and therefore may try to influence its board of directors. The directors that the corporation may influence as a shadow director may consciously or sub-consciously bring these matters forward.
However, playing devil’s advocate, I’m assuming that a corporation acting as a shadow director would only have their best interest in mind and that it would not align with the best interest of another company. When the interests of the corporations differ, I imagine that the corporation acting as a shadow director would choose their own interests over another company’s interests.
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Hi Steven, great point! I agree with you. I think that a corporation could certainly act as a shadow director of another corporation. Like you mentioned, they would circumvent the limitations under CBCA s. 2 and BCBCA s. 1 because they would be acting behind the curtains. I imagine that this would come up once the corporation that is being directed by the shadow director is facing liability in one way or another. I suppose the actual director would argue that the impugned acts happened under the command of the shadow director, and they are not liable for them because the shadow director was on a frolic of its own etc. Then again, we would look at agency, vicarious liability, directing mind… The interesting would be that if the shadow director was found liable in that scenario, the assumption of liability would be moot because the shadow director, being a corporation, would not have to deal with the losses that liability would impose.