Comment Letter regarding The Ontario Government’s Expert Panel report: Business Law Agenda

Oct 19, 2015
 
Introduction
 
The Institute of Corporate Directors is a national organization with over 10,000 members concerned principally with helping to improve the performance of boards and businesses across Canada and, by extension, our national economic performance. As a key centre of Canada’s capital markets and a significant driver of much of our country’s economic activity, improving the global competitiveness of Ontario business benefits the broader Canadian community.
 
We welcome the Ontario Government’s commitment to enhancing the province’s attractiveness as a venue for business and we agree that much can be done to dismantle barriers that make it less so. To that end, our comment letter supports the objective of the project and makes three specific points as well as one general comment that we believe the Minister may wish to consider as he advances this important initiative.
 
Consulting with Ontario business
 
The panel convened by the Minister is a highly experienced one and their recommendations will, appropriately, be closely considered. If the results of this initiative are intended to foster prosperity, create jobs, spur innovation and support long-term economic success for the province, we urge the Government to also solicit the insights of Ontario business in a more formal and direct way.
 
We understand that, through this consultation, the Government will receive feedback from business stakeholders but note that this feedback may relate mostly to the recommendations of this panel and may not address all of the changes that Ontario businesses feel would be accretive to their organizations and the province’s economic growth and competitiveness.
 
A formal consultation would allow the Government to better understand what businesses perceive to be the barriers to their own competitiveness. Most importantly, this would help ensure that any legislative changes that result from this initiative align with the needs of  the entrepreneurs, investors, managers and directors of Ontario’s public and private companies that create employment and wealth in the province.

3.2 (ii) Providing greater certainty about the standards to which directors and officers will be held, the liabilities to which they are exposed and the defences and protections available to them
 
Directors of Ontario companies must be allowed to exercise their fiduciary duty with clear understandings of the applicability of their due diligence defences and the limits to their liability. We agree with the panel’s recommendation that greater certainty must be brought to the due diligence defence and liability regimes governing directors and officers in Ontario and urge the Government to prioritize this in their Business Law Agenda.
 
Recent actions have eroded due diligence defences in Ontario, negatively impacting the province’s reputation for fair play and predictability and acting as a disincentive for experienced leaders to serve on boards in the province. Below we offer greater context regarding this erosion and the impact this has had in Ontario and offer recommendations on how this may be addressed in legislation.

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