Exhibit 4.54


 


DRAXIS HEALTH INC.


 


Charter of the Board of Directors


 


I.                                       General Purpose of the Board:


 


The
Board’s primary responsibility is to foster the long-term success of the
Corporation consistent with the Board’s fiduciary responsibility to the shareholders
to maximize shareholder value.


 


The
Board of Directors has plenary power. Any responsibility not delegated to
management or a Committee of the Board remains with the Board. These terms of
reference are prepared to assist the Board and management in clarifying
responsibilities and ensuring effective communication between the Board and
management.


 


The
specific statutory duties of the Directors are dictated by the Canada Business Corporations Act. The Board of Directors has
the statutory duty to supervise the management of the business and affairs of
the Corporation. The Board shall also oversee the current functioning and
future growth of the Corporation.


 


In
general, the Board is responsible for:


 


a)                                      adopting a strategic planning process for the
Corporation;


 


b)                                     adopting a communications policy for the
Corporation;


 


c)                                      overseeing the financial integrity of the
Corporation;


 


d)                                     monitoring compliance with the corporate
objectives of the Corporation;


 


e)                                      approving and ascertaining that the Corporation
monitor adherence to its Code of Ethics and Business Conduct;


 


f)                                        appointing the Chief Executive Officer (CEO),
monitoring his performance and ascertaining that succession plans are in place
with respect to the CEO and senior management;


 


g)                                     ensuring that appropriate structures and
procedures are in place so that the Board can function independently from
management;


 


h)                                     establishing performance measures for the
Corporation and its management;


 


i)                                         monitoring compliance with legal requirements
and ascertaining that the Corporation has procedures concerning the proper
preparation, approval and maintenance of documents and records;


 

















 


j)                                         approving changes in the By-laws and Articles
of Incorporation, and agendas for shareholder meetings;


 


k)                                      approving the Corporation’s legal structure,
name and logo; and


 


l)                                         performing such functions as it reserves to
itself or which cannot, by law, be delegated to Committees of the Board or to
management.


 


II.                                   Delegation of Powers to Committees, the Chief Executive Officer and Management:


 


The
Board of Directors may:


 


a)                                      delegate their powers to Committees of the
Board and to the President and CEO;


 


b)                                     assign their duties to Committees of the Board;
and


 


c)                                      delegate to management powers to manage the
Corporation’s business and affairs.


 


Certain
matters cannot, however, be delegated by the Board, including filling vacancies
on the Board, declaring dividends, purchasing securities issued by the
Corporation, issuing securities except as authorized by the Board, and
approving a proxy circular or financial statements.


 


III.                               Standards of Performance Required of Directors:


 


1.                                       Fiduciary Duty


 


When
exercising their powers and discharging their duties, Directors must act
honestly and in good faith with a view to the best interests of the Corporation.
The Directors are thus fiduciaries vis-a-vis the Corporation and, as such, they
must advance the interests of the Corporation in an impartial and disinterested
manner. In particular, Directors must not allow personal or business interests
to conflict with the interests of the Corporation. Directors must not use their
position as such, and information and knowledge derived from their position,
for their personal gain or advantage.


 


Directors
are also subject to a duty of confidence regarding the affairs of the
Corporation. Directors should not disclose or provide to others access to
confidential information about the Corporation.


 


2.                                       Standard of Care


 


When
exercising their powers and discharging their duties, Directors must exercise
the care, diligence and skill that a reasonably prudent person would exercise
in comparable circumstances. This standard requires Directors to devote the
necessary time and attention to the affairs of the Corporation and its
subsidiaries, make necessary enquiries


 


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of
management and others so as to make informed decisions, and make use of their
education and experience.


 


IV.                              Composition and Board Organization:


 


Nominees
for Directors are initially considered and recommended by the Nominating and
Corporate Governance Committee of the Board, approved by the entire Board and
elected annually by the shareholders of the Corporation.


 


A
majority of Directors comprising the Board must meet the independence and
unrelated director requirements of all applicable laws, regulations and listing
requirements to which the Corporation is subject.


 


Directors
who are not members of management will meet without management present and
without any director who is not considered an unrelated and independent
director in accordance with the above provisions at every regularly scheduled Board meeting to
discuss matters of interest independent of any influence from management.


 


Certain
of the responsibilities of the Board referred to herein may be delegated
to Committees of the Board. The responsibilities of those Committees will be as
set forth in their terms of reference, as amended from time to time.


 


V.                                  Duties and Responsibilities:


 


1.                                       Managing the Affairs of the Board


 


The
Board operates by delegating certain of its authorities, including spending
authorizations, to management and by reserving certain powers to itself.
Certain of the legal obligations of the Board are described in Section I. Subject
to these legal obligations and to the Articles and By-laws of the Corporation,
the Board retains the responsibility for managing its own affairs, including:


 


a)                                      planning its composition and size;


 


b)                                     selecting its Chair;


 


c)                                      nominating candidates for election to the
Board;


 


d)                                     approving Committees of the Board and
membership of Directors thereon;


 


e)                                      determining Director compensation, including
reviewing the adequacy and form of compensation of Directors to ensure
that it realistically reflects the responsibilities and risks involved in being
an effective Director;


 


f)                                        regularly assessing, through its Nominating and
Corporate Governance Committee, the effectiveness of the Board, Committees and
Directors in fulfilling their responsibilities; and


 


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g)                                     adopting an orientation program for new
Directors and a continuing education program for Directors to assist them in
understanding the nature and operation of the business of the Corporation, the
role of the Board and its Committees and the individual contribution that
Directors are expected to make.


 


2.                                       Management and Human Resources


 


The
Board has the responsibility for:


 


a)                                      the appointment and succession of the CEO and
monitoring CEO performance, approving CEO compensation and providing advice and
counsel to the CEO in the execution of the CEO’s duties;


 


b)                                     approving position descriptions for directors
and for the CEO and approving the corporate objectives which the CEO is
responsible for meeting;


 


c)                                      reviewing CEO performance at least annually,
against agreed-upon written objectives;


 


d)                                     approving decisions relating to senior
management, including:


 


i                                             the appointment and discharge of officers of
the Corporation and members of the senior leadership team;


 


ii                                          the compensation and benefits for members of
the senior leadership team;


 


iii                                       the acceptance of outside Directorships on
public companies by executive officers;


 


iv                                      the annual corporate and business unit
performance objectives utilized in determining incentive compensation or other
awards to officers; and


 


v                                         the employment contracts, termination and other
special arrangements with executive officers, or other employee groups if such
action is likely to have a subsequent material impact on the Corporation or its
basic human resource and compensation policies;


 


e)                                      monitoring the performance of senior
management;


 


f)                                        to the extent feasible, satisfying itself as to
the integrity of the CEO and other senior officers and that the CEO and other
senior officers create a culture of integrity throughout the Corporation;


 


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g)                                     ensuring succession planning programs are in
place, including programs to train and monitor senior management;


 


h)                                     approving any related party transaction or any
transaction involving a Director or officer of the Corporation, regardless of
materiality; and


 


i)                                         approving compensation and benefit program
matters relating to all employees.


 


3.                                       Strategy and Plans


 


The
Board has the responsibility to:


 


a)                                      adopt a strategic planning process and approve,
at least annually, a strategic plan which takes into account, among other
things, the opportunities and risks of the business of the Corporation which
management had identified. As part of its approval function, the Board
will approve the entering into, or withdrawing from, lines of business that
are, or are likely to be, material to the Corporation;


 


b)                                     approve capital commitment and expenditure
budgets and relating operating plans;


 


c)                                      approve the financial and operating objectives
used in determining compensation;


 


d)                                     approve corporate,  political and charitable donation budgets;


 


e)                                      approve material divestitures and acquisitions;
and


 


f)                                        monitor management’s achievements in
implementing major corporate strategies and objectives, in light of changing
circumstances.


 


4.                                       Financial and Corporate Issues


 


The
Board has the responsibility to:


 


a)                                      take reasonable steps to ensure the
implementation and integrity of the Corporation’s internal control and
management information systems;


 


b)                                     review operational and financial results;


 


c)                                      approve annual financial statements and
managements’ discussion and analysis relating thereto;


 


d)                                     approve quarterly financial results and
managements’ discussion and analysis relating thereto and approve the release
thereof and the release of earnings announcements by management.


 


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e)                                      approve the Management Proxy Circular, Annual
Information Form, the Annual Report and documents incorporated by reference
therein;


 


f)                                        declare dividends, if any;


 


g)                                     approve any disposition or expenditure in
excess of $1,000,000;


 


h)                                     approve financings, changes in authorized
capital, issue and repurchase of shares, issue of debt securities, listing of
shares and other securities, issue of commercial paper, and related
prospectuses and trust indentures;


 


i)                                         following review of the recommendation of the
Audit Committee, recommend to shareholders the appointment of external
auditors;


 


j)                                         approve banking resolutions and significant
changes in banking relationships;


 


k)                                      approve contracts, leases and other
arrangements or commitments that may have a material impact on the
Corporation;


 


l)                                         approve spending authority guidelines; and


 


m)                                   approve the commencement or settlement of
litigation that may have a material impact on the Corporation.


 


5.                                       Business and Risk Management


 


The
Board has the responsibility to:


 


a)                                      ensure that management has identified the
principal risks of the Corporation’s business and implemented appropriate
systems to manage these risks, including insurance coverage, where appropriate;


 


b)                                     review reports on capital commitments and
expenditures relative to approved budgets;


 


c)                                      review operating and financial performance
relative to budgets or objectives;


 


d)                                     monitor management control systems:


 


i                                             evaluate and assess information provided by
management and others (e.g. internal and external auditors) about the
effectiveness of management control systems; and


 


ii                                          understand principal risks and determine
whether the Corporation achieves a proper balance between risk and returns and
that management ensures that systems are in place to address risks identified.


 


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6.                                       Policies and Procedures


 


The
Board has the responsibility to:


 


a)                                      adopt a communications policy for the
Corporation;


 


b)                                     monitor compliance with all significant
policies and procedures by which the Corporation is operated;


 


c)                                      direct management to ensure the Corporation
operates at all times within applicable laws and regulations and in accordance
with the Code of Ethics and Business Conduct;


 


d)                                     provide policy direction to management while
respecting management’s responsibility for day-to-day management of the
Corporation’s businesses; and


 


e)                                      review significant new corporate policies or
material amendments to existing policies.


 


7.                                       Compliance Reporting and Corporate
Communications


 


The
Board has the responsibility to:


 


a)                                      ascertain that the Corporation has in place
effective communication processes with shareholders (including measures for
receiving feedback from shareholders) and other stakeholders and financial,
regulatory and other recipients;


 


b)                                     approve interaction with shareholders on all
items requiring shareholder response or approval;


 


c)                                      ascertain that the financial performance of the
Corporation is reported to shareholders, other security holders and regulators
on a timely and regular basis;


 


d)                                     ascertain that the Corporation shall have
measures in place for the timely reporting of any other developments that have
significant and material impact on the Corporation; and


 


e)                                      report annually to shareholders on the Board’s
stewardship for the preceding year.


 


8.                                       Notification


 


The
Board has adopted a policy that requires any Director who finds himself in a
conflict of interest situation to notify the Chair of the Nominating and
Corporate Governance Committee. The Nominating and Corporate Governance
Committee shall in turn advise


 


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the
Board and provide recommendations on the member’s continued service to the
Corporation as a Director under such circumstances.


 


VI.                              Periodic Review of Board Effectiveness and Director’s Effectiveness:


 


The
Nominating and Corporate Governance Committee is responsible to make an annual
assessment of the overall performance of the Board and to report its findings
to the Board.


 


The
assessment will examine the effectiveness of the Board as a whole and will
specifically review areas that the Board and / or management believe could be
improved to ensure the continued effectiveness of the Board in the execution of
its responsibilities.


 


The
assessment of the performance of individual Directors is the responsibility of
the Nominating and Corporate Governance Committee.


 


VII.                          Meetings Without
Management:


 


The
Board appreciates the value of the regular attendance at each board meeting of
non-board members who are members of the Corporation’s senior management.


 


Attendance
by senior management who are not on the Board shall be determined by the CEO
with the concurrence of the Chair.


 


Management
attendees will be excused for any agenda items that are reserved for discussion
among Directors only.


 


VIII.                      Ability of
Directors to Retain Advisors:


 


Occasionally,
individual Directors may need the services of an advisor or expert to
assist on matters involving their responsibilities as board members. The Board
has determined that any Director who wishes to engage an outside advisor at the
expense of the Corporation may do so if he or she first obtains
authorization of the Chair.


 


IX.                              Committee Review:


 


The
Board periodically reviews the composition of Committees.


 


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