What is necessary for a director’s liability under the standard of knowing and carrying on with intent?

To establish a director's liability under the standard of knowing and carrying on with intent, it is essential to demonstrate clear intent to defraud. This means that the director must have acted with the intention of deceiving shareholders or stakeholders for personal gain or to the detriment of others. This standard recognizes that liability arises not just from negligent actions but from intentional wrongdoing that demonstrates a disregard for the interests of others.

The requirement of clear intent to defraud reflects a higher level of culpability, as it indicates that the director had a conscious objective to commit fraud, differentiate it from mere negligent behavior or unintentional oversight. Establishing this intent is crucial because it shows that the director did not simply fail to fulfill their duties but actively engaged in deceptive practices aimed at benefiting themselves or harming others.

Other considerations, such as prior knowledge, intent to harm, or negligent behavior alone, do not meet the heightened threshold necessary to establish liability in cases of knowing and carrying on with intent. Rather, they reflect different aspects of behavior that may influence a director’s legal standing but do not sufficiently demonstrate the wrongdoing required for liability under this standard.