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Feds’ corporate law reform may create more problems than it solves

Instead of making it easier for a board of directors to consider a company’s climate impact, revised act could make it harder

The 2019 federal budget proposed a number of changes to the Canada Business Corporations Act. One in particular, which is expected to receive Royal Assent soon, would allow a corporation’s board of directors to consider the interests of certain prescribed stakeholders, the environment and the long-term interests of the corporation. While the intention may be to clarify and broaden the scope of directors’ duties to act in the best long-term interests of a corporation, the amendment’s muddled language may have the opposite effect. So instead of making it easier for a director to consider a company’s impact on the climate, it could make it harder.

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