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News item: "The directors of Canadian Airlines resign to avoid personal liability..."
While directors of an incorporated company have "limited" liability, they are not totally exempt from liability. In fact, as prescribed in the Business Corporations Act, the directors have a duty (and are liable if they do not observe that duty) to act in good faith with a view to the best interests of the corporation. In addition, other statutes impose strict liability upon directors. For example, the directors are liable for three months' unpaid wages to all employees. Likewise, the directors are personally liable to the Minister of National Revenue for unremitted source deductions or unremitted GST. Environmental legislation also imposes strict liability on directors for environmental matters.
Short of resigning, there are a number of steps that directors should and must take in order to reduce the risk of personal liability. Directors should contact legal counsel in this respect.