Navigating Governance Challenges in Closely Held Companies

In this program, Susan Kushneryk and Eric Morgan discuss how lawyers who work with closely held companies can navigate governance challenges, including complex legal frameworks and ethical issues involved in the governance of companies. Topics include:

• Overview of governance legal principles

Directors’ duties (fiduciary and duty of care) Relevant statutes (OBCA and CBCA) and case law

Corporate separateness, and shareholders’ and other stakeholders’ rights

• Common sources of conflict in closely held companies and how to deal with them

Unclear division of roles and responsibilities between directors, owners, and managers Recognizing when there are conflicts of interest between different governance actors because of their different legal obligations (e.g. directors and shareholders) and what counsel needs to do in these circumstances, including referring the client(s) to separate counsel

Disputes over allocation of decision-making powers and economics benefits, and succession issues in family enterprises o Ethical issues for counsel working with closely held companies when conflicts aris

• How these conflicts can be avoided and resolved, both in and out of court

Governance best practices to avoid conflicts Managing the relationships between different governance actors that may become acrimonious and personal while maintaining civility in the boardroom and continuing to understand and discuss with the client what the client is looking for in terms of a successful outcome o Involvement of independent counsel (e.g. when separate representation is needed and for investigations)

Presenter(s)

• Susan Kushneryk • Eric Morgan