Benefit Company Legislation Comes To Canada

It was one year ago that the Business Roundtable, an influential group of CEOs of large American companies, reversed its commitment to the "primacy" of shareholders, endorsing instead "a fundamental commitment to all of our stakeholders." This pivot arose from a landmark shift in thinking about the role of corporations in a free market economy, in which corporate leaders are recognizing the importance of long-term value over short-term expediency and the absolute necessity of a more inclusive prosperity.

It's well-settled law that directors and officers of Canadian companies owe no duty to shareholders in particular. They're required to act in the best interests of the company itself, taking into account the interests of relevant stakeholders. But the debate over what a commitment to stakeholders other than shareholders actually means, how it can be enforced, and what "long-term value" and "sustainability" mean to any given corporation and the economy as a whole