Director duties do not become a single global rule just because a group operates internationally. A director can sit on several boards and participate in one cross-border transaction, yet each entity may have a different governing statute, constitutional document, standard of review, conflict process and litigation route.

The practical answer is simple: identify the entity first, then ask the local questions. Delaware, the United Kingdom and federal Canada offer useful comparison points, but none should be treated as a template for every company in every country.

Question 1: who owes the duty, and to whom?

Start with status. Is the person actually a director of this entity, an officer, a shareholder representative, an employee, a de facto decision-maker, or some combination? Then ask how local law frames the duty.

UK Companies Act 2006 section 170 states that the general duties specified in sections 171–177 are owed by a director to the company. Canada’s federal CBCA section 122 uses its own statutory language for directors and officers. Delaware fiduciary analysis operates within its own statutory and case-law framework.

Do not write “directors owe the same fiduciary duties everywhere” in a cross-border memo.

Question 2: what is the source of board authority?

In Delaware corporations, DGCL §141 provides the basic rule that the business and affairs are managed by or under the direction of the board, subject to the statute and certificate of incorporation. A UK company’s authority analysis involves its Companies Act framework and constitution. A federal Canadian corporation also has its own statutory allocation of corporate powers and records.

The local question is not merely “is this normally a board matter?” It is: which provision, article, bylaw, delegation or shareholder arrangement gave this body authority for this decision?

Question 3: how are conflicts handled?

Conflict rules are a classic place where people import the wrong law.

Delaware’s current DGCL §144 contains a detailed statutory structure for specified interested directors, officers and controlling stockholders. UK Companies Act sections 175–177 address conflicts, benefits and interests in proposed transactions within the UK statutory duties framework. Canada has its own statutory conflict provisions beyond the general duty in section 122.

A disclosure step that is significant in one jurisdiction may not produce the same legal effect elsewhere. Ask local counsel what must be disclosed, to whom, when, and what approval process follows.

Question 4: how is care measured?

The words “reasonable care” may appear familiar across systems, but the test and surrounding doctrine matter.

UK section 174 states a duty to exercise reasonable care, skill and diligence and uses both general and director-specific elements. Canada CBCA section 122 includes the care, diligence and skill of a reasonably prudent person in comparable circumstances. Delaware analysis is structured differently and is heavily shaped by case law.

Do not turn a comparison chart into a claim that the standards are identical.

Question 5: what protection exists for a decision made in good faith?

Many clients ask whether a “business judgment rule” protects the decision. That phrase is especially dangerous in a global memo because its content, prerequisites and procedural effect vary.

For a Delaware corporation, case law and statutory provisions such as DGCL §141(e) may be relevant to specified good-faith reliance. Elsewhere, the analysis may use different statutory wording and doctrinal tools.

Ask the local question: what standard will the decision actually be reviewed under, and what facts are necessary before that standard applies?

Question 6: who owns the cause of action?

This question changes strategy dramatically.

UK section 260 defines a derivative claim by reference to a cause of action vested in the company and relief sought on its behalf, subject to further statutory procedure. Canada CBCA section 239 provides a court-leave derivative-action framework. A Delaware corporate claim may involve different standing and procedural rules.

A shareholder cannot safely assume that a fall in the value of their shares converts a company injury into a personal claim.

Question 7: is there a separate member-protection route?

Some jurisdictions provide statutory member remedies distinct from derivative claims. UK section 994 is an unfair-prejudice petition framework. Canada CBCA section 241 provides oppression relief.

These regimes have different statutory language, standing and remedial powers. They are useful comparative examples precisely because they show why “unfair treatment” is not a universal cause of action.

Ask locally whether the facts fit a direct member remedy, a company claim, both through separate routes, or neither.

Question 8: what documents control the relationship?

Cross-border governance disputes are often lost in a pile of group-level documents. A parent-company shareholders’ agreement may not govern a subsidiary. A group delegation policy may not override a subsidiary’s constitution or local statute.

For each entity, identify:

  • incorporation document;
  • articles/bylaws or constitution;
  • shareholder or unanimous shareholder agreement;
  • board and committee mandates;
  • delegations;
  • financing restrictions;
  • relevant employment or service agreements;
  • transaction-specific approvals.

Do not assume a document travels across the corporate group because the same people signed it.

Question 9: which date matters for the law and the evidence?

The governing law may change over time, and facts can be evaluated using materials available on the decision date rather than later knowledge.

Build two date columns: law version/date checked and decision evidence date. For statutory sources, use the current official consolidation, but ask local counsel whether transitional provisions or earlier versions matter to the historical transaction.

For evidence, separate what existed before the vote from what was generated afterward.

Question 10: what procedural clock applies?

Limitation, pre-action, permission, demand, service and emergency-relief rules are jurisdiction-specific. Even where the substantive concern looks similar, procedural clocks can differ sharply.

Create a local deadline register rather than one “global deadline.” Include transaction closing dates and contractual notice periods as well as court limitation questions.

Never calculate a foreign limitation period from a generic online article and treat it as advice.

A jurisdiction comparison table for issue spotting

Question Delaware corporation UK company Federal Canadian corporation
Board-management baseline DGCL §141 Companies Act + constitution CBCA + corporate documents
Director duties fiduciary doctrine + statute/case law Companies Act §§171–177 CBCA §122 and related provisions
Interested transactions current DGCL §144 framework statutory conflict-duty provisions CBCA conflict provisions + documents
Company-level claim route Delaware-specific standing/procedure derivative framework incl. §260 derivative framework incl. §239
Member-protection example Delaware-specific remedies unfair-prejudice petition §994 oppression remedy §241

This table is only a research map. It is deliberately not a statement that the columns are equivalent.

Question 11: does insolvency change the frame?

A cross-border group may have one solvent parent and a distressed subsidiary. Director analysis can change materially when an entity faces insolvency or creditor pressure, and the relevant rules are intensely local.

Do not let healthy group-level cash obscure a subsidiary’s position. Prepare liquidity by entity, including intercompany balances, security, guarantees and proposed transfers.

Get insolvency-specific local advice where the financial condition is material.

Question 12: can one law firm answer everything?

A coordinating lawyer can help maintain one fact pattern and one decision map, but that does not make them licensed or competent to give final opinions on every jurisdiction.

The efficient model is often hub-and-spoke: one coordinator maintains the chronology, entity map and evidence package; local advisers answer tightly framed questions.

This reduces duplication while preserving jurisdictional accuracy.

The local-questions pack

For each entity, send local counsel the same short pack:

  1. entity name and incorporation place;
  2. decision and date;
  3. directors and relevant roles;
  4. governing documents;
  5. conflict facts;
  6. board information set;
  7. approval route used;
  8. alleged company/member harm;
  9. next irreversible event;
  10. requested answer.

Then ask: What duty applies? What standard governs review? What conflict procedure matters? Who can bring the claim? What relief exists? What deadline cannot be missed?

A warning about translated legal labels

Translations can create false equivalence. “Fiduciary duty,” “duty of loyalty,” “oppression,” “unfair prejudice,” “derivative action” and “inspection right” may be translated into familiar-looking terms even though the statutory tests differ.

Keep the original statutory label in the working file and attach the official source. Translate for readability, not to pretend the institutions are identical.

The practical rule for multinational boards

Use one shared factual chronology, but never one shared legal conclusion.

The chronology can be global: who decided what, when, with which information. The legal analysis should then branch by entity and jurisdiction. That separation is what prevents a convenient rule from the parent company’s home jurisdiction from silently becoming the rule for every subsidiary.

That discipline also makes later updates cheaper. When legislation changes in one country, the team can update the affected branch instead of reopening a supposedly global conclusion. The same principle applies when a new entity joins the group: add its documents, decision-makers and local questions to the map rather than copying the parent-company analysis. A modular legal file is easier to audit, easier to hand to local counsel, and less likely to hide a jurisdictional assumption inside ordinary business language.

General corporate-governance information only, not legal advice. Director duties, inspection rights, procedures and remedies vary materially by jurisdiction, entity type and facts. Qualified local professionals should confirm current law, governing documents and deadlines before action.

Related Reading

Sources and Scope Notes