In Canada, most corporate statutes provide directors with unfettered access to corporate records, including privileged documents. Even side communications between any member of the board and counsel, management or third parties are accessible and discoverable by all directors. While this rule makes sense in the normal course, there are many situations in which this access would be inappropriate (e.g., when a board committee is overseeing material conflict of interest transactions or conducting an investigation). In these situations, the ability of a board committee to keep certain information confidential from other directors, or retain privilege over such information, can be of critical importance and fundamental to its mandate. While Canadian jurisprudence has provided limited exceptions to the otherwise unfettered right of access (e.g., limiting information available to a director who is being sued by the corporation), we note that under Delaware law, privilege can be 8 | Board Committees: Preserving Privilege and Confidentiality The year 2023 was marked by an explosion of interest in AI as a result of the success of “large language models” (such as ChatGPT) that proved to be captivating, inspiring and—in some cases—frightening. The fact is, AI is not new, ChatGPT is not “artificial general intelligence” (AGI), and it is unlikely that anyone will conclude—at least in the foreseeable future—that it would be wise to cede corporate decision-making to an AI technology. So how should boards and management approach AI in 2024? While experts disagree on how much runway we have until AGI fundamentally alters the way we work, think and interact, boards and management can take a number of actions in the interim, including: (i) understanding the use cases of current AI technology for the business; (ii) understanding the risks inherent in the use of AI technology; and (iii) developing an AI governance policy to help address current risks and to provide a framework to address what is yet to come. For a primer on artificial intelligence and some concrete examples of steps boards and management can take today to address the risks and opportunities of AI, see our article, Get Smart on Artificial Intelligence and Corporate Governance: Key Considerations for Boards of Directors . 7 | Artificial Intelligence Continues to Advance
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