Canada: the CBCA and the 'best interests of the corporation'

The Federal Budget was delivered earlier this year and among the proposals in the accompanying legislation - Bill C-97 - are those making amendments to the Canada Business Corporations Act: see here.

One of these will amend section 122 ("Duty of care of directors and officers"), which provides (in subsection (1)) that "Every director and officer of a corporation in exercising their powers and discharging their duties shall (a) act honestly and in good faith with a view to the best interests of the corporation; and (b) exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances".

A new subsection - 122(1.1) - will be added titled "Best interests of the corporation" and this will state:

When acting with a view to the best interests of the corporation under paragraph (1)‍(a), the directors and officers of the corporation may consider, but are not limited to, the following factors:

(a) the interests of (i) shareholders, (ii) employees, (iii) retirees and pensioners, (iv) creditors, (v) consumers, and (vi) governments;

(b) the environment; and

(c) the long-term interests of the corporation.