Section 137(2) is necessary and worded the way it is in order to protect the interests of the corporation. For instance, if a director transferred his powers to a separate corporation (as it can be any person within or outside the corporation) of which [s]he is a sole shareholder, [s]he may use that corporation to act in a manner of self-interest and against the original corporation’s interests. By transferring duties and liabilities to the person receiving these powers, it prevents any possible mischievous directing. In relation, the Mace discussion on “corporate raiders” (in relation to mergers and acquisitions) could take on a new form if there was not some form of responsibility imposed on those new directors.
In addition, because these powers may be transferred to an individual whom has insufficient knowledge regarding the corporation, this article provides a disincentive for those individuals to take on such a responsibility. However, if such a situation arises, should those former directors be completely relieved of their duties and liabilities?
Under the BCBCA, the articles of a company must clearly indicate, by express reference to section 137 or otherwise, the intention that the powers of the directors be transferred to one or more other persons. Even though there is no such requirement in the CBCA, a transfer not included in the articles would be found invalid. The same is true for a transfer made by a unanimous shareholder agreement as the BCBCA does not recognize USAs.
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Hey Peter, I largely agree with your analysis of the potential effect (read: no effect) of a purported agreement to transfer the obligations/rights of a director. I think you can pretty well read the section to be exclusionary of any potential other means of transference of obligations/rights.
Additionally though, I think the clear invalidity of such a proposed move can be understood by the common law position of “delegatus non potest delegare” which, if my readings in trust can be, uh, trusted, essentially amounts to the concept that someone delegated-to cannot sub-delegate. In the trust context this meant that, absent variation by legislation, someone chosen as a trustee could not delegate their obligations to another. I think that in the corporations context, given the fiduciary duty attendant in both, the maxim would mean that any attempt of a director to sub-delegate would be ineffective.
I think this fact about the common law strengthens the position that any purported delegation of obligations/rights except as allowed in the statute will be ineffective, because it shows that even if the statute were found to not be exclusionary of the common law, the common law would nevertheless not allow this sub-delegation either.