**Exhibit 4.54**

 

**DRAXIS HEALTH INC.**

 

**Charter of the Board of Directors**

 

**I.**                                       General Purpose of the Board:

 

TheBoard’s primary responsibility is to foster the long-term success of theCorporation consistent with the Board’s fiduciary responsibility to the shareholdersto maximize shareholder value.

 

TheBoard of Directors has plenary power. Any responsibility not delegated tomanagement or a Committee of the Board remains with the Board. These terms ofreference are prepared to assist the Board and management in clarifyingresponsibilities and ensuring effective communication between the Board andmanagement.

 

Thespecific statutory duties of the Directors are dictated by the *Canada Business Corporations Act*. The Board of Directors hasthe statutory duty to supervise the management of the business and affairs ofthe Corporation. The Board shall also oversee the current functioning andfuture growth of the Corporation.

 

Ingeneral, the Board is responsible for:

 

a)                                      adopting a strategic planning process for theCorporation;

 

b)                                     adopting a communications policy for theCorporation;

 

c)                                      overseeing the financial integrity of theCorporation;

 

d)                                     monitoring compliance with the corporateobjectives of the Corporation;

 

e)                                      approving and ascertaining that the Corporationmonitor 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 placewith respect to the CEO and senior management;

 

g)                                     ensuring that appropriate structures andprocedures are in place so that the Board can function independently frommanagement;

 

h)                                     establishing performance measures for theCorporation and its management;

 

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

 

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

 

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

 

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

 

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

 

TheBoard of Directors may:

 

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

 

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

 

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

 

Certainmatters cannot, however, be delegated by the Board, including filling vacancieson the Board, declaring dividends, purchasing securities issued by theCorporation, issuing securities except as authorized by the Board, andapproving a proxy circular or financial statements.

 

**III.**                               Standards of Performance Required of Directors:

 

1.                                       Fiduciary Duty

 

Whenexercising their powers and discharging their duties, Directors must acthonestly 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, theymust advance the interests of the Corporation in an impartial and disinterestedmanner. In particular, Directors must not allow personal or business intereststo conflict with the interests of the Corporation. Directors must not use theirposition as such, and information and knowledge derived from their position,for their personal gain or advantage.

 

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

 

2.                                       Standard of Care

 

Whenexercising their powers and discharging their duties, Directors must exercisethe care, diligence and skill that a reasonably prudent person would exercisein comparable circumstances. This standard requires Directors to devote thenecessary time and attention to the affairs of the Corporation and itssubsidiaries, make necessary enquiries

 

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ofmanagement and others so as to make informed decisions, and make use of theireducation and experience.

 

**IV.**                              Composition and Board Organization:

 

Nomineesfor Directors are initially considered and recommended by the Nominating andCorporate Governance Committee of the Board, approved by the entire Board andelected annually by the shareholders of the Corporation.

 

Amajority of Directors comprising the Board must meet the independence andunrelated director requirements of all applicable laws, regulations and listingrequirements to which the Corporation is subject.

 

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

 

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

 

**V.**                                  Duties and Responsibilities:

 

1.                                       Managing the Affairs of the Board

 

TheBoard operates by delegating certain of its authorities, including spendingauthorizations, to management and by reserving certain powers to itself.Certain of the legal obligations of the Board are described in Section I. Subjectto 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 theBoard;

 

d)                                     approving Committees of the Board andmembership of Directors thereon;

 

e)                                      determining Director compensation, includingreviewing the adequacy and form of compensation of Directors to ensurethat it realistically reflects the responsibilities and risks involved in beingan effective Director;

 

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

 

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g)                                     adopting an orientation program for newDirectors and a continuing education program for Directors to assist them inunderstanding the nature and operation of the business of the Corporation, therole of the Board and its Committees and the individual contribution thatDirectors are expected to make.

 

2.                                       Management and Human Resources

 

TheBoard has the responsibility for:

 

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

 

b)                                     approving position descriptions for directorsand for the CEO and approving the corporate objectives which the CEO isresponsible for meeting;

 

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

 

d)                                     approving decisions relating to seniormanagement, including:

 

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

 

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

 

iii                                       the acceptance of outside Directorships onpublic companies by executive officers;

 

iv                                      the annual corporate and business unitperformance objectives utilized in determining incentive compensation or otherawards to officers; and

 

v                                         the employment contracts, termination and otherspecial arrangements with executive officers, or other employee groups if suchaction is likely to have a subsequent material impact on the Corporation or itsbasic human resource and compensation policies;

 

e)                                      monitoring the performance of seniormanagement;

 

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

 

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

 

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

 

i)                                         approving compensation and benefit programmatters relating to all employees.

 

3.                                       Strategy and Plans

 

TheBoard has the responsibility to:

 

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

 

b)                                     approve capital commitment and expenditurebudgets and relating operating plans;

 

c)                                      approve the financial and operating objectivesused in determining compensation;

 

d)                                     approve corporate,  political and charitable donation budgets;

 

e)                                      approve material divestitures and acquisitions;and

 

f)                                        monitor management’s achievements inimplementing major corporate strategies and objectives, in light of changingcircumstances.

 

4.                                       Financial and Corporate Issues

 

TheBoard has the responsibility to:

 

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

 

b)                                     review operational and financial results;

 

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

 

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

 

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e)                                      approve the Management Proxy Circular, AnnualInformation Form, the Annual Report and documents incorporated by referencetherein;

 

f)                                        declare dividends, if any;

 

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

 

h)                                     approve financings, changes in authorizedcapital, issue and repurchase of shares, issue of debt securities, listing ofshares and other securities, issue of commercial paper, and relatedprospectuses and trust indentures;

 

i)                                         following review of the recommendation of theAudit Committee, recommend to shareholders the appointment of externalauditors;

 

j)                                         approve banking resolutions and significantchanges in banking relationships;

 

k)                                      approve contracts, leases and otherarrangements or commitments that may have a material impact on theCorporation;

 

l)                                         approve spending authority guidelines; and

 

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

 

5.                                       Business and Risk Management

 

TheBoard has the responsibility to:

 

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

 

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

 

c)                                      review operating and financial performancerelative to budgets or objectives;

 

d)                                     monitor management control systems:

 

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

 

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

 

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6.                                       Policies and Procedures

 

TheBoard has the responsibility to:

 

a)                                      adopt a communications policy for theCorporation;

 

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

 

c)                                      direct management to ensure the Corporationoperates at all times within applicable laws and regulations and in accordancewith the Code of Ethics and Business Conduct;

 

d)                                     provide policy direction to management whilerespecting management’s responsibility for day-to-day management of theCorporation’s businesses; and

 

e)                                      review significant new corporate policies ormaterial amendments to existing policies.

 

7.                                       Compliance Reporting and CorporateCommunications

 

TheBoard has the responsibility to:

 

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

 

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

 

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

 

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

 

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

 

8.                                       Notification

 

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

 

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

 

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

 

TheNominating and Corporate Governance Committee is responsible to make an annualassessment of the overall performance of the Board and to report its findingsto the Board.

 

Theassessment will examine the effectiveness of the Board as a whole and willspecifically review areas that the Board and / or management believe could beimproved to ensure the continued effectiveness of the Board in the execution ofits responsibilities.

 

Theassessment of the performance of individual Directors is the responsibility ofthe Nominating and Corporate Governance Committee.

 

**VII.**                          Meetings WithoutManagement:

 

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

 

Attendanceby senior management who are not on the Board shall be determined by the CEOwith the concurrence of the Chair.

 

Managementattendees will be excused for any agenda items that are reserved for discussionamong Directors only.

 

**VIII.**                      Ability ofDirectors to Retain Advisors:

 

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

 

**IX.**                              Committee Review:

 

TheBoard periodically reviews the composition of Committees.

 

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