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Under the Canadian Business Corporations Act, directors are responsible for managing the corporation's affairs, subject to any unanimous shareholder agreement. While this responsibility may seem clear-cut, complications can arise. For instance, if management discovers soil contamination on newly acquired land and chooses to handle remediation internally, they might assume they are managing the situation adequately and decide not to inform the board or regulatory authorities. However, if the news of contamination emerges and leads to a regulatory investigation, the initial lack of transparency could pose significant problems for the corporation, despite prior discussions at the board level regarding environmental issues.
