ABSTRACT
Corporate law scholarship is witnessing a resurgence of interest in corporate purpose, emphasising the potential role of purpose in governance. This is all the more so for incorporated charities, which are for-purpose entities. However, while purpose-based governance promises many benefits, it also generates difficulties for director decisions relating to change of purpose or to actions that simultaneously advance and hinder the achievement of a purpose. The traditional controls on the exercise of directors’ discretionary powers, the best interests duty and the proper purpose duty, are very difficult to apply in these situations if they are construed primarily as focussing on advancement of an entity’s purposes. This paper therefore examines the duty of care as an alternative control mechanism or as a prism for highlighting material considerations that ought to be taken into account by charity directors if the best interests duty and proper purpose duty are characterised in a more process-oriented way. Articulating material considerations can help directors satisfy the duty of care or the alternatively interpreted best interests and proper purpose duties.
Murray, Ian, The Duty of Care as a Prism for Highlighting Material Considerations for Charity Directors (October 18, 2022), (2022) 16 Journal of Equity (Forthcoming).
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