Law Commons^™

Corporations As International Economic Law Actors, Barnali Choudhury

All Papers

Actors in international law are presumed to be states. Yet in the international economic law arena, the corporation is one of the most prominent non-state actors. Indeed, in some instances, the corporation may even be more influential than the state in some arenas of international economic law. This short piece examines three instances of this influence. First, it looks at the role of corporations in law-making; second, it examines corporations’ role in monitoring and compliance; and, third, it explores corporations’ legal personality in international economic law. Finding corporations’ immense influence on law-making and monitoring and compliance, combined with a robust …

Enforcing International Human Rights Law Against Corporations, Barnali Choudhury

All Papers

International human rights law is generally thought to apply directly to states, not to corporations since the latter is not a subject of international law. Some domestic courts are, however, enforcing these norms against corporations in domestic settings. Canadian courts have, for instance, recognized that corporations can be liable for breach of customary international law norms while UK courts have enforced international human rights norms indirectly against corporations relying on a combination of domestic corporate and tort law.

At the same time, some states are choosing to enforce international human rights norms against corporations using regulatory initiatives. These initiatives, known …

Corporate Law’S Threat To Human Rights: Why Human Rights Due Diligence Might Not Be Enough, Barnali Choudhury

Articles & Book Chapters

The take-up of mandatory human rights due diligence (HRDD) initiatives by states is continuously gaining momentum. There are now numerous states adopting some form of HRDD laws. While corporations being duly diligent in respecting human rights is a positive step towards addressing problems of business and human rights, these HRDD initiatives on their own may only be a form of window-dressing, that is, enabling states to put a smart spin on their efforts to address business and human rights issues without addressing some of the root causes of that predicament. As a result, HRDD laws are likely to be a …

Stuck In Neutral? Reforming Corporate Purpose And Fiduciary Duties, Barnali Choudhury, Martin Petrin

All Papers

After decades of corporate leadership based on shareholder wealth maximization, momentum is now gathering behind a shift towards the recognition of stakeholder interests. However, from voluntary actions by business to changes in soft and hard law, the steps taken thus far have been insufficient to result in meaningful changes. Instead, we are stuck in neutral. A more decisive push is needed to ensure that business contributes to tackling the most pressing societal issues of our times in a substantial and timely manner. The Canadian corporate landscape, although beginning to shift away from shareholder primacy, is still not settled and in …

The Future Of The Corporate Form In Income Tax: A Case Study Of Canada, Jinyan Li

All Papers

A corporation is nothing but a piece of paper. And yet, this piece of paper enjoys the status of a person and has an independent identity as a taxpayer (the “separate entity principle”). It can generate tremendous value for its shareholders through tax savings resulted from tax deferral, tax shifting, and tax subsidies. Why does tax law allow such value to exist? Is there any hard line constraining the scope of the tax benefits associated with the corporate form? To what extent can the two pillars (Pillar One and Pillar Two) crush the corporate form? What is the future of …

Algorithmic Management And Collective Bargaining, Valerio De Stefano, Simon Taes

Articles & Book Chapters

This article addresses the challenges raised by the introduction of algorithmic management and artificial intelligence in the world of work, focusing on the risks that new managerial technologies present for fundamental rights and principles, such as non-discrimination, freedom of association and the right to privacy. The article argues that collective bargaining is the most suitable regulatory instrument for responding to these challenges, and that current EU legislative initiatives do not adequately recognise the role of collective bargaining in this area. It also maps current initiatives undertaken by national trade union movements in Europe to govern algorithmic management.

Climate Change As Systemic Risk, Barnali Choudhury

Articles & Book Chapters

Hindsight tells us that COVID-19, thought by former President Trump and others to have come out of nowhere, is more aptly labelled a “gray rhino” event, one that was highly probable and preventable. Indeed, despite considerable evidence of the impending threats of pandemics, for the most part, governments failed to prepare for the pandemic, resulting in wide-scale social and economic losses.

The lessons from COVID-19, however, should remind us of the perils of ignoring gray rhino risks. Nowhere is this more apparent than with climate change, a highly probable, high impact threat that has largely been ignored to date. Despite …

Social Disclosure And Share Value: Empirical Data On (Non-) Disclosure Of Information Related To Violence And Lack Of Indigenous Consent, Shin Imai, Sarah-Grace Ross

Articles & Book Chapters

The Justice and Corporate Accountability Project has filed a number of complaints to the Ontario Securities Commission, the British Columbia Securities Commission and the United States Securities and Exchange Commission relating to the failure of Canadian mining companies to disclose information on community conflict, violence and Indigenous consent. We have also studied violence associated with 28 Canadian mining companies in Latin America and recorded company disclosure of violence.

Time To Act: Response To Questions Posed By The Expert Panel On Sustainable Finance On Fiduciary Obligation And Effective Climate-Related Financial Disclosures, Cynthia Williams, Janis P. Sarra

Commissioned Reports, Studies and Public Policy Documents

The Expert Panel on Sustainable Finance has been commissioned by the Canadian Government to determine how best to generate sustainable finance, a significant challenge given the carbon intensity of Canada’s economy. The Expert Panel has defined sustainable finance as capital flows, risk management activities and financial processes that assimilate environmental and social factors as a means of promoting sustainable economic growth and the long-term stability of the financial system. While there are numerous strategies to be deployed to move Canada to a financially sustainable future, this report addresses two critically important issues: fiduciary obligation of corporate- and pension-fiduciaries, and national …

General Jurisdiction Over Corporate Defendants Under The Cjpta: Consistent With International Standards?, Catherine Walsh

Osgoode Hall Law Journal

“General jurisdiction” refers to a court’s competence to adjudicate disputes arising out of a defendant’s activities anywhere in the world. Absent consent or submission, international instruments reserve general jurisdiction over corporations to the states in which the corporation has its registered office, centre of administration, or principal place of business. The bases of general jurisdiction under the Court Jurisdiction and Proceedings Transfer Act (CJPTA) are far broader and include simply having a place of business in the forum or even registering to carry on business there. This article locates the conceptual roots of the CJPTA approach in the traditional common …

In Search Of Things Past And Future: Judicial Activism And Corporate Purpose, Edward J. Waitzer, Douglas Sarro

Osgoode Hall Law Journal

Corporate purpose does not lend itself to any clear or constant definition. Rather, courts’ understanding of corporate purpose adapts over time to reflect evolving social norms and expectations as to the proper role of the corporation in society. We use the oppression remedy under Canadian corporate law to explore how Canadian courts have and will continue to play a key role in shifting legal and market understandings of corporate purpose towards a more long-termist, stakeholder-focused perspective. We begin by exploring the rationale for moving the law in this direction, outlining some of the causes and effects of short-term horizons on …

Social Enterprise, Law & Legal Education, Lorne Sossin, Devon Kapoor

Osgoode Hall Law Journal

This article examines the relationship between law and social enterprise. More specifically, it explores ways in which the law and the law school can serve to refine and promote the development of social enterprise. The article begins by canvassing the existing conceptions of social enterprise to provide a basis for understanding and to identify points of access for legal intervention. At the end of this analysis, we arrive at a working definition of social enterprise: A legal entity engaged in socially responsible economic activity for the purpose of generating revenue that is to be used to advance a social mission. …

Coordination And Monitoring In Changes Of Control: The Controversial Role Of “Wolf Packs” In Capital Markets, Anita Anand, Andrew Mihalik

Osgoode Hall Law Journal

Given recent empirical work suggesting that Canada is one of two countries in which outcomes favourable to shareholder activists are more likely than in the United States, one might wonder whether shareholders in Canadian public companies have become too empowered. This concern takes on particular significance in light of controversies arising from the emergence of “wolf packs”: loose networks of parallel-minded shareholders (typically hedge funds) that act together to effect change in a given corporation without disclosing their collective interest. This article analogizes the role of wolf packs in the corporation to that of a blockholder. It isolates certain conditions …

The Role Of Corporate Governance In Curbing Foreign Corrupt Business Practices, Poonam Puri, Andrew Nichol

Osgoode Legal Studies Research Paper Series

The role of corporate and securities laws in addressing foreign corrupt business practices has, to date, received limited consideration. Departing from the substantial literature on the criminal and public law response to international corruption, the authors analyze Canada’s Corruption of Foreign Public Officials Act in comparison with British and American legislation and conclude that the Canadian regime relies too heavily on the use of criminal sanctions and fails to contemplate the role of behaviour modification in its legislative structure. Recognizing that multinational corporations are well placed to identify, expose and prevent corrupt business practices, the authors propose a private law …

The Duty Of Corporate Directors To Tie Executive Compensation To The Long-Term Sustainability Of The Firm, Alberto Salazar, Muthana Mohamed

Osgoode Legal Studies Research Paper Series

Executive compensation is said to be for performance and, in liberal market economies, the board of directors along with compensation committees have largely been in charge of safeguarding pay for performance. This executive compensation system is legally protected by the business judgment rule (a strong judicial deference) and has recently been supplemented with shareholders’ ‘say on pay’. Further legal or government intervention has been deemed unnecessary. However, such system has resulted in extremely excessive executive compensation, outrageous pay disparities between executives and workers, poor or short-term performance, recurrent corporate failures and economic recession. This paper explores the need for a …

Corruption At The Intersection Of Business And Government: The Oecd Convention, Supply-Side Corruption, And Canada’S Anti-Corruption Efforts To Date, Milos Barutciski, Sabrina Bandali

Osgoode Hall Law Journal

Over the last twenty years, international and regional conventions have been concluded to combat the corruption of public officials. Part I of the paper explains the genesis of international anti-corruption law and its focus on the “supply-side” of bribery transactions, drawing on the negotiating history and the experience of practitioners involved in the development of international anti-corruption law. Parts II and III examine Canada’s implementation of its international obligations and its enforcement record to date. Part IV of the paper concludes with an analysis of the challenges faced by Canadian businesses and the limitations of the focus on supply-side of …

The Role Of Corporate Governance In Curbing Foreign Corrupt Business Practices, Poonam Puri, Andrew Nichol

Osgoode Hall Law Journal

The role of corporate and securities laws in addressing foreign corrupt business practices have, to date, received limited consideration. Departing from the substantial literature on the criminal and public law response to international corruption, the authors analyze Canada’s Corruption of Foreign Public Officials Act in comparison with British and American legislation and conclude that the Canadian regime relies too heavily on the use of criminal sanctions and fails to contemplate the role of behaviour modification in its legislative structure. Recognizing that multinational corporations are well placed to identify, expose, and prevent corrupt business practices, the authors propose a private law-based …

The Brazilian Clean Company Act: Using Institutional Multiplicity For Effective Punishment, Mariana Mota Prado, Lindsey Carson, Izabela Correa

Osgoode Hall Law Journal

In Brazil’s battle against corruption over the past two decades, there has been significant progress associated with the systems of oversight and investigation but very little progress in holding corrupt actors legally accountable for their transgressions. We suggest that until very recently this could be partially explained by the fact that there was institutional multiplicity (i.e., duplication of functions) in oversight and investigative institutions, while at the punishment stage, a single and underperforming institution—the judiciary—exercised monopolistic authority. To circumvent the limits associated with Brazilian courts, the government is increasingly relying on administrative sanctions for corruption. It is in this context …

The Political Economic Dimensions Of Executive Compensation Reform: Can The Foundations Of Shareholder Primacy Be Sustained In The Post - Crisis Regulatory Environment?, Dezso Peter Arpad Farkas

LLM Theses

What is absent in much of the literature on executive compensation reform is a deeper appreciation of the shift that has occurred since the latest financial crisis away from performance-based corporate governance arrangements to an approach that seeks to put the brakes on a runaway train, the shareholder value model and its relentless pursuit of shareholder wealth at all costs. By situating this debate into a broader discussion of corporate purpose, corporate governance and the law’s role in how business corporations are run in their social, economic and political environment this project seeks to shed some light onto what really …

What Kind Of Corporation Tax Regime?, Sijbren Cnossen

Osgoode Hall Law Journal

This article explores the taxation of corporations in the wider context of capital income taxation. The article discusses pros and cons of various income-based and cash-flow forms of corporation tax (CT) and concludes that the dual income tax (DIT), which taxes all capital income at the proportional CT rate, is to be preferred over other forms of taxing capital income. The DIT is best attuned to the reality of capital mobility and is not held hostage by the higher tax on labour income. Levied at a uniform flat rate, the DIT minimizes opportunities for tax arbitrage.

Unanimous Shareholder Agreements, Nicolas William Juzda

PhD Dissertations

The unanimous shareholder agreement is a feature of most Canadian corporate statutes that allows the shareholders to, by creating an agreement meeting the necessary criteria, restrict the powers of the directors to manage the business and affairs of the corporation. One possible justification for this is the "nexus of contracts" theory that all corporations are notionally reducible to voluntary agreements. Three key areas of ambiguity surrounding unanimous shareholder agreements are examined in this dissertation, with specific reference to existing judgments. The requirements for their formation are reviewed, including the exact meaning and strictness of the unanimity criterion and the necessity …

Transnational Business Governance Interactions: Conceptualization And Framework For Analysis, Burkard Eberlein, Kenneth W. Abbott, Julia Black, Errol Meidinger, Stepan Wood

Articles & Book Chapters

This special issue demonstrates the importance of interactions in transnational business governance. The number of schemes applying non-state authority to govern business conduct across borders has vastly expanded in numerous issue areas. As these initiatives proliferate, they increasingly interact with one another and with state-based regimes. The key challenge is to understand the implications of these interactions for regulatory capacity and performance, and ultimately for social and environmental impact. In this introduction, we propose an analytical framework for the study of transnational business governance interactions. The framework disaggregates the regulatory process to identify potential points of interaction, and suggests analytical …

Access To Justice And Corporate Accountability: A Legal Case Study Of Hudbay In Guatemala, Shin Imai, Bernadette Maheandiran, Valerie Crystal

Articles & Book Chapters

This case study looks at the avenues open for addressing serious allegations of murder, rape and assault brought by indigenous Guatemalans against a Canadian mining company, HudBay Minerals. While first-generation legal and development policy reforms have facilitated foreign mining in Guatemala, second-generation reforms have failed to address effectively conflicts arising from the development projects. The judicial mechanisms available in Guatemala are difficult to access and suffer from problems of corruption and intimidation. Relevant corporate social responsibility policies and mechanisms lack the necessary enforcement powers. Canadian courts have been reluctant to permit lawsuits against Canadian parent companies; however, in Choc v. …

Law, The American Corporation, And Society, Fenner Leland Stewart Jr.

PhD Dissertations

This book explores how American legal scholarship treats the corporation by providing a history of American corporate legal theory, a history of corporate (social) responsibility from the perspective of the Berle–Dodd debate, an analysis of how legal scholars understand corporate lawmaking in America, and an initial inquiry into how the prevailing opinions about the corporation are realized in the context of a critical assessment of whether or not this resulting corporate governance holds the potential to compliment the efforts of new governance regulators. This book consists of four essays about American corporate governance. Three essays trace how three particular presumptions …

Addressing The Tension Between Directors' Duties And Shareholder Rights - A Tale Of Two Regimes, Sean Vanderpol, Edward J. Waitzer

Osgoode Hall Law Journal

There is a basic tension inherent in the regulation of corporations between the role to be played by boards and that to be played by shareholders. Boards have the statutory responsibility to manage the business and affairs of the corporation, and owe an express duty to act in the best interests of the corporation. Shareholders, however, are the ultimate ‘owners’ of the corporation, and have the ability to elect and remove directors. Canadian courts and securities regulators have long struggled with this tension in determining the roles to be played by each in transactions that pose the potential for conflicts …

Making Sense Of Magna, Edward Iacobucci

Osgoode Hall Law Journal

In 2010, Magna International Inc. (Magna) obtained court approval of an arrangement to buy back its super-voting shares, which placed control in the hands of a shareholder with 0.6 per cent of the equity, at a 1,800 per cent premium to non-voting shares. I agree with the decision to approve but disagree with some of the court's reasons. Magna's board failed to provide a clear description of the possible benefits of the transaction. For example, theory and empirical analysis challenge the board's suggestion that liquidity benefits would help justify the arrangement. The board and the court also failed to describe …

Was Magna In The Public Interest?, Anita Anand

Osgoode Hall Law Journal

No abstract provided.

The Meaning Of 'Sphere Of Influence' In Iso 26000, Stepan Wood

Articles & Book Chapters

The relationship between a company’s influence and its social responsibilities is the subject of persistent controversy, manifested for example in the debate over the use of the concept of “sphere of influence” (SOI) to define the scope of a company’s social responsibility. Early drafts of the ISO 26000 guide on social responsibility employed SOI in this way, stating among other things that influence can give rise to responsibility and that generally, the greater the ability to influence, the greater the responsibility. The UN Special Representative on business and human rights, John Ruggie, rejected this use of SOI as ambiguous, misleading, …

Mediating Rights And Responsibilities In Control Transactions, Sean Vanderpol, Edward J. Waitzer

Osgoode Hall Law Journal

There is a growing debate as to the relative merits and consequences of a shift to a more shareholder-centric corporate governance framework. How much "direct democracy" makes sense in corporate decision making? If power is to be transferred to shareholders, should responsibilities be imposed (and, if so, how)? These issues have long been addressed by courts and regulators in the context of unsolicited control transactions. In its recent Air Products & Chemicals v. Airgas decision, the Delaware Chancery Court canvassed the evolution of its law on this point and concluded that implicit in the power (and responsibility) of the board …

Peoples, Bce, And The Good Corporate "Citizen", Edward J. Waitzer, Johnny Jaswal

Osgoode Hall Law Journal

This article considers the use of various legal instruments to advance a more expansive but well-defined view of directors' duties and discretion--a view which focuses on the longer-term interests of the corporation. We begin with an attempt to clarify the nature of directors' statutory duties under Canadian corporate law. We then consider the recent decisions of the Supreme Court of Canada in Peoples Department Stores Inc. (Trustee of) v. Wise and BCE v. 1976 Debentureholders, in which the Court took a broad view of corporate purpose, but failed to provide clear logic or operational guidance as to consequential directorial responsibilities. …