Canada: Legislative Update – Trick Or Treat?

Changes to legislation pave the way to changes in Board composition  

The government brought into force a law, on Halloween, that makes important changes to the higher learning sector of universities, colleges and institutes.

What has the government done?  It gets detailed, but bear with us:

Board members come in two varieties: those appointed by the sole discretion of the government of the day, and those elected by a constituency of the university, college or institute (whether student, faculty or staff).

Before Halloween, a person was not eligible to be appointed or elected to the Board, or (if already appointed or elected) to remain a Board member, if they meet both of these two criteria:

(a) they are an employee of the institution; and

(b) they are a voting member of the executive or an officer of, a faculty or staff association who has the sole or joint responsibility to either:

– negotiate collective agreements with the institution; or

– adjudicate disputes with the institution regarding the association's members.

Now, such a person is no longer deemed ineligible to serve on an institution's Board.  That, of course, opens to the door to members of the executive or officers of staff and faculty associations being elected to the Board, and sitting Board members being elected to the executive or appointed as an officer of a staff and faculty association.

What about appointed members? The debates in the Legislature regarding Bill 36 show that one of the reasons for this change was to expand and diversify the pool of candidates in the face of the province's view that it is difficult to fill Board seats. While the Minister stated that the government does not wish to interfere with faculty and staff electing their own representatives, the thrust of the Minister's comments imply that the government may exercise its discretion to supplement the elected members with representatives from the leadership of staff and faculty associations.  Such appointments, if made, would present not just conflict of interest issues (discussed below), but also governance issues arising out of the reduction in the number of the truly "outside" or "independent" directors. So, while the pool of potential candidates may be expanded and diversified, it may be that the range of perspectives at the Board table may be narrowed.

Other reasons for the change were that the previous law was discriminatory and potentially unconstitutional, and ultimately unnecessary—the Minister stated that no other government in Canada is subject to a similar restriction, and ultimately, each institution's existing conflict of interest rules and policies are sufficient to deal with any actual, potential or perceived conflicts of interest that may arise from time to time.

In our view, the government's action is not technically or legally objectionable, but it will result in various challenges and unintended consequences.

Why isn't the change technically or legally objectionable? The answer is that it is normal for members of a Board to have multiple interests, some of which may actually or potentially conflict with the institution, or may appear to do so. The law does not require that only those with no conflicts serve on boards (then we'd have a real problem filling Board seats)—rather the law requires that conflicts be proactively identified and carefully managed in the best interests of the institution.

The management of conflicts is, of course, nuanced and fact-specific, but normally involves the conflicted member not participating in the discussion or the vote on the matter that gave rise to the conflict. Proper management may involve the person leaving the Board room during the discussion and vote, and even not being provided with written materials regarding the matter.

However, some conflicts are fundamental, such that it ceases to be in the best interest of the institution for the person to remain on the Board. That may be because a person's personal or business interests are so closely intertwined with the institution that it is not possible to actually or credibly appear to set those interests aside and act solely in the best interests of the institution.  A fundamental conflict may also arise because in practice, the person will have to recuse themselves from a substantial part of the Board's business, thereby rendering themselves functionally ineffective as a Board member.

In 2012, the government of the day made a judgement on behalf of all of the institutions and the faculty and staff associations— members of the executive or an officer of a faculty or staff association who are negotiating employment terms, or adjudicating disputes against the Board, have a fundamental conflict and neither the Board nor the faculty and staff associations ought to be left to navigate that situation themselves.

The changes passed by the legislature this Halloween open the door to individuals who have what was previously considered to be a fundamental conflict, to serve on Boards (whether elected or appointed). That means that, should such a Board member be elected or appointed, Boards, senior leadership in each institution, and the executives and officers of the relevant faculty and staff associations need to be all the more vigilant, and all the more prepared to act to ensure that all conflicts of interest are first, identified, and most importantly, appropriately managed.

Good Board governance practices include orientation of new board members, and periodic educational sessions of matters including fiduciary duties. In light of these changes, especially as the sector moves into collective bargaining, every Board should be considering additional, refresher training, information and, most importantly, conversations amongst Board members about fiduciary duties, and in particular, regarding conflicts of interest.  Presidents and Board Chairs in particular, need to not only maintain vigilance, but, since conflicts may arise at any time (including in the midst of a Board meeting) be prepared with conflict management strategies to implement in real time.

Ultimately, the government is sending a message that it trusts institutions and their Boards to fulfill their fiduciary obligations, and appropriately handle any and all situations in the best interests of the institution.   It'll now be up to the institutions themselves to rise to the challenge,  which will test the strength of institutional rules and policies and, most importantly, practices. With appropriate care and attention to Board member and executive training, and having direct and clear-eyed conversations amongst Board members about fiduciary obligations, I'm confident that institutions will be equal to the task, and prove worthy of that trust.

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

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
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).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions