Accountability of Corporate Management
Canadian Legal Studies Series

Lynn Campbell    (Ed.)

Captus Press, ISBN 978-1-55322-276-7 (2013)
528 pages, 1200 g, 8.5 X 11, $72.50 (US$58.00)

Imposed by statute, all authority to manage a corporation's affairs is vested in the Board of Directors. However, the term "management" may also be applied to others involved in the decision-making process of larger corporate structures. Important questions thus arise with respect to management of a corporate body: Who are these people? What status do these individuals have in law? What is the nature of their relationship not just with the corporation, but also with the larger community - consumers and the public? How do other disciplines view this select group of persons in management positions? Accountability of Corporate Management assists in responding to these questions.

Structured into five parts, the book explains the different methods of governing corporate management's actions in Canada and abroad. Topics covered include: the Canadian Business Corporations Act, corporate governance, property and democracy, contracts and fiduciary duty in corporate law, and liability of corporate officers and directors to third parties.

A collection of timely, carefully-chosen materials, Accountability of Corporate Management is excellent as a primary or secondary text for university and law courses.

Table of Contents   top

I Introduction

1 Who Are the Managers?

(a) Note

(b) Specific Investment: Explaining Anomalies in Corporate Law

Margaret M. Blair and Lynn A. Stout

(c) The Board of Directors as Nexus of Contracts: A Critique of Gulati, Klein & Zolt’s “Connected Contracts” Model

Stephen M. Bainbridge

(d) Corporate Governance Handbook: Legal Standards and Board Practices

The Conference Board.

(e) Canada Business Corporations Act (Excerpts)

(f) Freeman and Lockyer (a firm) v. Buckhurst Park Properties (Mangal) Ltd


2 Why Control Is Necessary

(a) Note

(b) Corporate Control: Background and Issues

Edward S. Herman.

(c) Board Assessments of Managerial Performance: An Analysis of Attribution Processes

Bryan Schaffer .

(d) The Role of Boards of Directors in Corporate Governance: A Conceptual Framework and Survey

Renée B. Adams, Benjamin E. Hermalin, and Michael S. Weisbach

(e) Corporate Governance — An Overview

P.M. Vasudev and Susan Watson

(f) Corporate Governance in Theory

Donald Nordberg

(g) The Place of Enterprise Liability in the Control of Corporate Conduct

Christopher D. Stone

(h) Corporate Social Responsibility (CSR) as a Model of “Extended” Corporate Governance. An Explanation Based on the Economic Theories of Social Contract, Reputation and Reciprocal Conformism

Lorenzo Sacconi

(i) Toward a New/Old Theory of Corporate Social Responsibility

Daniel J. Morrissey

(j) Discretion of Corporate Management to Do Good at the Expense of Shareholder Gain — Canadian Corporate Law

Leon Getz. .

(k) Corporation Law As If Some People Mattered

Christopher S. Axworthy

(l) The Objective and Conduct of the Corporation

The American Law Institute

(m) Corporate Governance, Shareholder Value and Societal Expectations

Richard Tudway and Ana-Maria Pascal

(n) Automatic Self-Cleansing Filter Syndicate Co. v. Cuninghame

(o) Olson v. Phoenix Industrial Supply


II Control by the Judiciary

3 Equity: Good Faith and Loyalty

(a) Note

(b) An Economist’s View of Fiduciary Duty

Oliver Hart

(c) Revisiting the Import of Shareholder Consent for Corporate Fiduciary Loyalty Obligations

Victor Brudney

(d) Contract and Fiduciary Duty in Corporate Law

Victor Brudney


A. Best Interest

(e) Note

(f) Re Smith & Fawcett Ltd

(g) Re W. & M. Roith Ltd

(h) Parke v. Daily News Ltd

(i) A Modern Approach to Redefining “In the Best Interests of the Corporation”

Tuvia Borok

(j) The Interests Represented by the Board

The Toronto Stock Exchange

B. Collateral Purpose

(k) Note

(l) Exco Corporation v. Nova Scotia Savings and Loan Company

(m) Re Olympia & York Enterprises Ltd. and Hiram Walker Resources Ltd.

(n) 820099 Ontario Inc. v. Harold E. Ballard Ltd.


C. No Conflicts — Contracts with the Corporation

(o) Note

(p) North-West Transportation Company v. Beatty

(q) Canada Business Corporations Act, s. 120


D. No Conflicts — General Principle

(r) Note

(s) Industrial Development Consultants Ltd. v. Cooley

(t) Cook v. Deeks

(u) Canadian Aero Service Ltd. v. O’Malley

(v) LAC Minerals Ltd. v. International Corona Resources Ltd

(w) Designing an Efficient Fiduciary Law

Jeffrey G. MacIntosh


E. New Extensions

(x) Note

(y) Air Canada v. M & L Travel Ltd.

(z) Peoples Department Stores Inc. (Trustee of) v. Wise

(aa) BCE v. 1976 Debentureholders: The Supreme Court’s Hits and Misses in Its Most Important Corporate Law Decision Since Peoples

J. Anthony Vanduzer.

(ab) A Doctrinal Test: The Business Judgment Rule

Stephen M. Bainbridge

(ac) Indalex Limited (Re)


4 Equity: Skill, Care, and Diligence

(a) Note

(b) Re City Equitable Fire Insurance Co

(c) Directors’ Diligence Under the Income Tax Act

Russell Lynn Campbell

(d) Soper v. Canada

(e) Peoples Department Stores Inc. (Trustee of) v. Wise (Continued)

(f) The Supreme Court’s Decision in Peoples: A New Standard of Directors’ Liability?

R. Lynn Campbell

(g) Canada v. Buckingham

(h) Kerr v. Danier Leather Inc.

(i) Canada Business Corporations Act, ss. 122–125

5 Common Law

(a) Note

(b) Einhorn v. Westmount Investments Ltd.

(c) McFadden v. 481782 Ontario Ltd.

(d) ScotiaMcLeod Inc. v. Peoples Jewellers Ltd.

(e) NBD Bank, Canada v. Dofasco Inc.

(f) WS Leasing Ltd. v. Platinum Equipment Ltd.

(g) Holmes v. United Furniture Warehouse Limited Partnership


III Control by Internal Action


6 An Overview

(a) Note

(b) Majority–Minority Relations in Canadian Corporation Law: An Overview

Philip Anisman


7 Shareholder Meetings

(a) Note

(b) Canada Business Corporations Act, ss. 132–146


8 Unanimous Shareholder Agreements

(a) Note

(b) Shareholders’ Agreements

J. Anthony VanDuzer

(c) Armstrong v. Northern Eyes Inc.

(d) Duha Printers (Western) Ltd. v. Canada

(e) Sumner v PCL Constructors Inc.


9 Derivative Action

(a) Note

(b) Canada Business Corporations Act, ss. 238–240

(c) Acapulco Holdings Ltd. v. Jegen.

(d) R.L.T.V. Investments Inc. v. Saskatchewan Telecommunications


10 Oppression

(a) Note

 (b) Canada Business Corporations Act, ss. 241–242

(c) 820099 Ontario Inc. v. Harold E. Ballard Ltd. (Continued)

(d) Deluce Holdings Inc. v. Air Canada

(e) Budd v. Gentra Inc.

(f) Dylex Ltd. (Trustee of) v. Anderson

(g) UPM-Kymmene Corp. v. UPM-Kymmene Miramichi Inc. (Trial)

(h) UPM-Kymmene Corp. v. UPM-Kymmene Miramichi Inc. (Appeal)

(i) Icahn Partners LP v. Lions Gate Entertainment Corp.


11 Statutory Appraisal

(a) Note

(b) Canada Business Corporations Act, s. 190

(c) Ford Motor Co. of Canada Ltd. v. Ontario Municipal Employees Retirement Board (1997)


12 Compliance Orders

(a) Note

(b) Canada Business Corporations Act, s. 247

(c) Goodwood Inc. v. Cathay Forest Products Corp.


IV Control by External Forces


13 Investigations

(a) Note

(b) Canada Business Corporations Act, ss. 229–237

(c) Sparling v. Southam Inc.

(d) Re Royal Trustco Ltd. (No. 3)

(e) Catalyst Fund General Partner I Inc. v. Hollinger Inc. (Trial)

(f) Catalyst Fund General Partner I Inc. v. Hollinger Inc. (Appeal)

(g) Millard v. North George Capital Management Ltd.


14 Action under the Criminal Code

(a) Note

(b) Criminal Code, ss. 21, 22, 380

(c) R. v. McNamara (No. 2).

(d) R. v. Quality Electronics (Taber) Ltd.

(e) R. v. Scott Mfg. Ltd. et al.

(f) R. v. Tammadge

(g) R. v. Eizenga


15 Crown Action Resulting from Regulatory Action

(a) Note

A. Securities

(b) Litigation — Securities: Recent Developments of Importance

John A. Campion

(c) The Regulation of Corporate Law by Securities Regulators: A Comparison of Ontario and the United States

Patrick Moyer

(d) Poison Pills in 2011

Andrew L. Bab and Sean P. Neenan

(e) Re Cartaway Resources Corp.

(f) Donnini v. Ontario Securities Commission

(g) Rowan v. Ontario Securities Commission

(h) Forcing Canada’s Hand? The Effect of the Sarbanes-Oxley Act on Canadian Corporate Governance Reform

Sukanya Pillay

(i) Canada Business Corporations Act, ss. 126–131

B. Environment

(j) R. v. Bata Industries Ltd. (Appeal)

(k) R. v. Consolidated Maybrun Mines Ltd.

(l) Hawkins Bros. Fisheries Ltd. v. R.

(m) EnviroGun Ltd v Saskatchewan (Minister of the Environment)

(n) R. v. Neilson

C. Health and Safety in the Workplace

(o) Note

(p) R. v. London Excavators & Trucking Ltd.

(q) R. v. Timminco Ltd./Timminco Ltee

(r) R. v. Inco Ltd.

(s) R. v. Pack All Manufacturing Inc.

(t) R. v. Metron Construction Corporation


V Conclusion


16 Concluding Comments

(a) Note

(b) Evolution of Corporate Accountability: From Moral Panic to Corporate Social Responsibility

Norm Keith


Instructor Resources   top

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About the Author   top

R. Lynn Campbell, LL.B. (Western), LL.M. (London), of the Bar of Ontario, JD (Western), is currently a Professor in the Department of Law at Carleton University. He teaches business enterprise frameworks and legal issues in electronic commerce. His current research includes the fiduciary duties of a director, and internet commercial and privacy issues.