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Bill S-285: 21st-Century Business Act â Is Canada Finally Catching Up with the Rest of the World?
An August 2024 blog post by Akinwumi Ogunranti, Assistant Professor at Robson Hall, University of Manitoba, in the Dalhousie Law Journal:
âThe government of Canada, other senators, and members of parliament must support this Bill because it is of such national importance that it calls into question Canadaâs international obligations to protect human rights.â
Canadaâs 21st Century Business Act Aims to Supplement Profit with Social and Environmental Impact
A July 2024 newsletter article by B Lab US & Canada on Bill S-285:
“The more recent step forward is progressing in Canada, where Independent Senator Julie Miville-DechĂȘne introduced the 21st Century Business Act (21BA) in May. The bill would amend the Canada Business Corporations Act to include a stakeholder governance framework for all federally incorporated businesses. Under the 21BA, corporate directors and officers would be required to consider the companyâs social and environmental impacts in addition to profit-seeking objectives.”
Do No Harm: The Impact of the 21st Century Business Act on Canadian Businesses
A July 2024 bulletin by Sonia J. Struthers, Myreille Gilbert, Rebecca Wieschkowski and Patricia Doiron of McCarthy TĂ©trault:
âBill S-285 is motivated by a broader international movement towards redefining corporate responsibilities to include social and environmental considerations. The United Kingdom, France and the European Union (EU) have all introduced initiatives to integrate broader societal goals into corporate governance through the Better Business Act initiative, the French Loi PACTE and the Corporate Sustainability Due Diligence Directive (CSDDD), respectively.â
Bill S-285: A Canadian Contribution to the Stakeholder Governance Debate
A June 2024 bulletin by Davies Ward Phillips & Vineberg on Bill S-285:
âIf adopted, Bill S-285, and in particular its proposed amendments to section 122 of the CBCA, would transform the CBCAâs approach to a corporationâs stakeholders from an incidental consideration to a central one, whereby the benefits provided to various stakeholders would no longer derive from pursuing the best interests of the corporation, but would instead form part of the corporationâs purpose, enshrined in law, and would be protected through redefined directorsâ and officersâ duties.â
The Purpose Dividend
A November 2023 report by Demos documents the positive social, environmental and economic benefits of purpose-driven business:
âMaking purpose-led business the default way to run a business in the UK could unleash tens of billions of pounds of capital investment, turbocharge spending on research and development, aid our Net Zero transition, and boost wages for the lowest paid by thousands of pounds a year.â
3 Ways to Put Your Corporate Purpose into Action
A May 2020 article in the Harvard Business Review by Robert G. Eccles, Leo E. Strine, Jr. and Timothy Youmans:
âThe idea of corporate purpose is now mainstream, but so far it remains poorly defined and aspirational. The authors propose three innovations to make purpose meaningful: 1) Companies should adopt a clear âstatement of purposeâ that communicates which stakeholders (beyond stockholders) will be considered in the setting of strategy; 2) companies should adopt integrated reporting that allows investors and other stakeholders to evaluate the companyâs success in achieving its purpose; and 3) companies should adopt a new model for corporate governance based on the concept of the Delaware benefit corporation.â
The Future of the Corporation
A major research program by the British Academy:
âThe Future of the Corporation programme is the British Academyâs review of the role of business in society. It combined research from a range of academic disciplines with insight from senior business and policy leaders. It ran over four years from 2017, concluding with a final report published in September 2021. (…) Professor Colin Mayer, the Academic Lead for the programme, drew together the research and defined the purpose of business as: Producing profitable solutions for the problems of people and planet, and not profiting from creating problems.â
Lâentreprise, objet dâintĂ©rĂȘt gĂ©nĂ©ralÂ
March 2018 report by Jean-Dominique SĂ©nard et Nicole Notat, on the role of business in society:
âThe concept of âstakeholdersâ â that is, the people and groups who are at risk as a result of the company’s activity â is frequently mentioned to raise a corporationâs awareness of the impacts of its activity. Beyond these external stakeholders impacted by the company, this reportâs thesis is that corporate governance itself must incorporate these considerations into its strategy. To this end, every company needs to become aware of its âpurposeâ.â
A Bridge to Better Business: The Positive Case for Updating Directorsâ DutiesÂ
A September 2022 legal analysis of the Better Business Act by Jeff Twentyman and George Murray, of Slaughter and May:
âThere can be no doubt that some boards have faced and will continue to face some very difficult decisions concerning investment and capital allocation, shareholder returns and the interests of consumers. Given the vital role business must play, Jeff Twentyman and George Murray ask whether directorsâ duties give the proper foundation needed to allow companies to respond in the way society increasingly expects and the climate and other emergencies demand. We suggest that it would in fact be useful to look again at the way in which directorsâ duties are formulated. A change could better align the written legal requirements with reality, better serve stakeholders, give useful direction and, importantly, protection to directors.â
Stakeholder Governance and the Eclipse of Shareholder PrimacyÂ
A May 2024 memorandum by Martin Lipton and Kevin S. Schwartz, of Wachtell, Lipton, Rosen & Katz:Â
âThe emerging consensus about the essential role of stakeholder governance in Americaâs long-term corporate, economic, national security, and societal prosperity, heralds a development long overdue: the eclipse of shareholder primacy.â
The U.K. Has the Chance to Build a Better Capitalism
Bloomberg January 2022 opinion piece by Chris Turner:
âBy requiring companies to advance the interests of society and the environment alongside those of shareholders, the Better Business Act will unleash their full potential to meet the worldâs most pressing challenges.â
The Economics of Biodiversity: The Dasgupta Review
Prof. Partha Dasgupta, Cambridge University, February 2021 report commissioned by the UK government:
âHumanity faces an urgent choice. Continuing down our current path â where our demands on Nature far exceed its capacity to supply â presents extreme risks and uncertainty for our economies. Sustainable economic growth and development requires us to take a different path, where our engagements with Nature are not only sustainable, but also enhance our collective wealth and well-being and that of our descendants. Choosing a sustainable path will require transformative change, underpinned by levels of ambition, coordination and political will akin to, or even greater than, those of the Marshall Plan.â
Good Corporate Citizenship We Can All Get Behind? Toward a Principled, Non-Ideological Approach to Making Money the Right Way
An article by Leo E. Strine Jr., Senior Fellow, Harvard Program on Corporate Governance published in December 2022:
âThis article seeks to ameliorate this fractious debate threatening to politicize a business world that ought to be open to all Americans of good faith. To this end, the article maps out a non-partisan, principled conception of good corporate citizenship drawing on shared assumptions of the right and the left about the place of corporations in our society and the realities of corporate governance.â
The Challenge of Double Materiality: Sustainability Reporting at a Crossroad
A perspective from global professional services firm Deloitte:
âShould sustainability reporting become largely a tool for investors to minimize risk and seek financial opportunities; or should it serve as a deeper indicator of corporate responsibility, ensuring companies act in the broader, long-term interests of society? Will governments and regulatory bodies adopting ISSB as a reporting standard be ready to ensure companies account for their impact on the wellbeing of all, or simply the wellbeing of their investors?â