Balancing Risk and Reward in the Time of COVID-19: Bridging the Gap Between Public Interest and the 'Best Interests of the Corporation'
Flood, Colleen M, Vanessa MacDonnell, Jane Philpott, Sophie Thériault & Sridhar Venkatapurum, eds., The Law, Policy & Ethics of COVID- 19, Ottawa, University of Ottawa Press, 2020, 233-245 (available in open access: http://hdl.handle.net/10393/40726 )
13 Pages Posted: 20 May 2020 Last revised: 5 Nov 2020
Date Written: May 14, 2020
The scale of the global COVID-19 pandemic has made plain that business organizations have a key role to play in supporting public health efforts to contain the virus and follow social distancing. Directors and officers have been called upon to make proactive decisions about risk reduction that may hurt the bottom line (or simply diverge from established practice) but are the right thing to do. However, corporate law is permissive and tends to avoid dictating what should be done, so long as it is in the “best interests of the corporation”. Uncontrolled outbreaks of the virus in certain sectors of the economy deemed essential raise the difficult question of whether this flexible standard promotes an appropriate balance between economic viability and the legal pursuit of profit on the one hand and fundamental values such as the protection of human life and security on the other. In this paper, I reflect on how the pandemic situation brings this tension into sharper relief and exposes an accountability gap. I suggest that bridging this gap may be possible if we are prepared to recognize more explicitly that sometimes what is best for the corporation to protect the public interest.
Keywords: Corporate Duties, Corporate Law, COVID-19, Best Interests of Corporation, Corporate Social Responsibility, Risk Assessment
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