Montréal Partner and Chair of Fasken’s Partnership Board, Marie-Josée Neveu, Toronto Partner and Co-Leader of Fasken’s Capital Markets and Mergers & Acquisitions (CMMA) Group, Sean Stevens, and Calgary Partner and Co-Leader of Fasken’s CMMA Group, Sarah Gingrich, comment on changes to shareholders protection rules in the US in an op-ed published in The Globe and Mail.
They explain that a recent push by US states to reduce the ability of shareholders to hold controlling shareholders and management liable for mischief such as conflict-of-interest transactions could present a growing competitive advantage for Canada in terms of corporate governance.
“In Canada, unlike in Delaware and Texas, the fiduciary duties of directors can never be waived. Shareholders in Canadian companies also benefit from something called the “oppression” remedy, a broad and flexible right of recourse that is unique to Canadian law and protects the “reasonable expectations” of shareholders, as well as creditors and other corporate stakeholders,ˮ explain the Fasken partners.
They add that “Canada’s boardrooms have long been well known for adhering to high standards of corporate governance. This is partly driven by our corporate law, which emphasizes rigorous and informed decision-making and puts heavy emphasis on director independence and avoiding conflicts of interest, whether actual or even just reasonably perceived.”
