Report: Bringing Corporate Purpose into the Mainstream and Why Canada Should Enforce It

February 7, 2023 Enterprise, Entrepreneurs, Start-ups, Small Businesses, FinTech and Alternative Finance, Innovation and Resources, Leadership, Productivity, Competition, Human Capital, Health, Regtech, Compliance, Governance, Research No comments

David Suzuki Foundation | Jan 26, 2023

Bringing Corporate Purpose into the Mainstream: Directions for Canadian Law concludes that a more solid legal scaffolding for corporate purpose in Canada is necessary and puts forward five key recommendations to make it happen.

The idea of bringing corporate purpose into the mainstream through legal reform isn’t new. As the report shows, it’s already happening in places like France and the U.K.
- Among its recommendations, the report calls for the Canada Business Corporations Act to require a statement of purpose by a corporation’s board of directors (excluding small businesses), a “comply or explain” approach to stating that social purpose and broadening the best interests of the corporation to include impacts on the community.
- It also suggests amending fiduciary duty of directors and officers requiring them to pursue the purpose of the corporation with a view to its best interests.
  - “Amending director fiduciary duty to stipulate that directors have a duty to pursue the purpose is a game-changing proposal. To put that into effect boards will need to know what the purpose of their corporation is, which arguably is essential for good governance,” says Coro Strandberg, one of the report’s editors and chair of the Canadian Purpose Economy Project.

See: Why You Should Review Your Data Governance and Privacy Risks in Canada

Tara Campbell, David Suzuki Foundation:

Our current economic system prioritizes profit over the well-being of people and nature. Part of transforming to a society that values our needs, relationships and the natural world is ensuring corporations are held accountable for their actions. Establishing a corporate purpose is one tool to help enable that shift.

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