A Canadian Model of Corporate Governance: Where Do Shareholders Really Stand?

This feature article in the Director Journal summarizes the findings from the report, "A Canadian Model of Corporate Governance: Insights from Canada's Leading Legal Practitioners," produced for the Canadian Foundation for Governance Research and the Institute of Corporate Directors (also available on SSRN). In the report, interviews were conducted with 32 leading senior legal practitioners across Canada to opine on the fundamental principles that are driving the development of Canadian corporate governance. The report found that Canadian common law has made the process of considering stakeholders in the "best interests of the corporation" more overt, well beyond what is assumed in Anglo-American corporate legal scholarship. Layered onto this corporate legal base, the securities commissions are now playing a major role in shaping Canadian corporate governance practices, and their influence has pushed Canada toward a more shareholder-centric model of governance. Securities regulators have increased shareholders’ rights well beyond what has ever been contemplated under Canadian corporate law. It remains to be seen from the pending determinations by the Canadian Securities Administrators on the regulation of poison pills as to whether the regulators will be tempering their positions toward shareholder primacy in the future.