Osgoode Hall Law Journal

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Corporate purpose does not lend itself to any clear or constant definition. Rather, courts’ understanding of corporate purpose adapts over time to reflect evolving social norms and expectations as to the proper role of the corporation in society. We use the oppression remedy under Canadian corporate law to explore how Canadian courts have and will continue to play a key role in shifting legal and market understandings of corporate purpose towards a more long-termist, stakeholder-focused perspective. We begin by exploring the rationale for moving the law in this direction, outlining some of the causes and effects of short-term horizons on corporate and investment manager decision making, and how ideology and overly conservative legal advice contribute to this dynamic. We then outline an emerging role for judicial activism in breaking the log jam and helping us to re-focus on the real strength of capitalism—its flexibility to evolve and respond to a society’s expressed needs.

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