Walied Soliman and Orestes Pasparakis, co-chairs of our Canadian
Special Situations Team, recently authored an opinion piece in the
National Post's FP Comment section on "good" corporate governance. They argue
that the emphasis Canadian companies place on good corporate
governance is being misconstrued as an end in itself. The focus of
the corporation is, or should be, long-term value creation for the
benefit of its shareholders. "Good corporate governance can
serve this primary purpose, but it should never supplant
Walied and Orestes point to the fact that in this year's Globe and Mail Board Games rankings,
"companies with lower corporate governance scores outperformed
those with higher scores. The top 20 ranked companies had together
an average five-year return of 24.99%, while the middle 20 and
bottom 20 had average returns of 53.58% and 92.25%
respectively." So companies who are getting
"A's" in corporate governance may be doing so at the
expense of their shareholders. Walied and Orestes suggest adopting
a "pass-fail" scale as the more appropriate way to grade
Walied and Orestes also argue that companies should be cognizant
of the fact that the tools of good corporate governance, such as
transparency, accountability, and participatory governance, are
being used by opportunistic investors who "whose primary aim
is to maximize short-term profits, even at the expense of the
long-term viability of the company." As such, companies should
really consider whether conventional forms of "good corporate
governance" are the best way to protect and sustain long term
Norton Rose Fulbright Canada LLP
Norton Rose Fulbright is a global legal practice. We provide
the world's pre-eminent corporations and financial institutions
with a full business law service. We have more than 3800 lawyers
based in over 50 cities across Europe, the United States, Canada,
Latin America, Asia, Australia, Africa, the Middle East and Central
Recognized for our industry focus, we are strong across all
the key industry sectors: financial institutions; energy;
infrastructure, mining and commodities; transport; technology and
innovation; and life sciences and healthcare.
Wherever we are, we operate in accordance with our global
business principles of quality, unity and integrity. We aim to
provide the highest possible standard of legal service in each of
our offices and to maintain that level of quality at every point of
Norton Rose Fulbright LLP, Norton Rose Fulbright Australia,
Norton Rose Fulbright Canada LLP, Norton Rose Fulbright South
Africa (incorporated as Deneys Reitz Inc) and Fulbright &
Jaworski LLP, each of which is a separate legal entity, are members
('the Norton Rose Fulbright members') of Norton Rose
Fulbright Verein, a Swiss Verein. Norton Rose Fulbright Verein
helps coordinate the activities of the Norton Rose Fulbright
members but does not itself provide legal services to
The content of this article is intended to provide a
general guide to the subject matter. Specialist advice should be
sought about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
Under the Income Tax Act, the Employment Insurance Act, and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions or GST.
While most are well aware that the sale of a business is generally a complex process, even sophisticated business owners are surprised by just how much cost and effort is required to complete the sale.
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).