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24 Appeal: Rev. Current L. & L. Reform 19 (2019)
Promoting the Long-Term Management of Public Corporations through a Reform of Canadian Corporate Law

handle is hein.journals/appeal24 and id is 17 raw text is: APPEAL VOLUME 24 - 19 ARTICLE PROMOTING THE LONG-TERM MANAGEMENT OF PUBLIC CORPORATIONS THROUGH A REFORM OF CANADIAN CORPORATE LAW Camille Paquette * CITED: (2019) 24 Appeal 19 ABSTRACT Short-termism, a tendency to overemphasize strategies that generate immediate financial results at the expense of long-term profits, is a serious issue that the business community faces. Short-term market pressures and the responsive behaviour of corporate boards undermine long-term economic prosperity and social welfare. While select investors and executives may benefit financially from this short-termism, it largely runs counter to the interests of long-term investors and other stakeholders. Without concrete measures, it is unlikely that we will address the problem of short-termism. This article makes recommendations directed at encouraging long-term oriented thinking in boardrooms. It proposes two regulatory measures that, if jointly implemented, would dissuade boards from managing corporations for the short-term and insulate them from market pressures: first, imposing a fiduciary duty upon directors to act in accordance with the corporation's long-term interests; and second, requiring executive compensation to be aligned with the corporation's long-term interests. Camille Paquette is currently a corporate lawyer at Dentons Canada LLP's Montreal office. She holds a Bachelor of Civil Law from the University of Montreal and a Master of Laws from McGill University. She wrote this paper as part of her research project at McGill University.

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