On April 10, 2019, Bill M209: Business Corporations Amendments Act, 2019 was introduced into the BC Legislature.
Bill M209: Business Corporations Amendments Act, 20191 proposes amendments to British Columbia's Business Corporations Act to enable companies to incorporate as 'benefit companies', a new corporate form to hold BC businesses to higher a social and environmental standard. The Bill passed first reading on April 10, 2019 and second reading on April 29, 2019.
As discussed here, similar legislative amendments were proposed in 2018, under Bill M216: Business Corporations Amendment Act, 2018. While Bill M216 passed second reading on May 17, 2018 it was not called for committee debate and died on the order paper. The reintroduced Bill M209 proposes a new Part 2.3, to the BC Business Corporations Act, providing a legal framework for companies that are committed to pursuing a triple bottom line. Under the proposed amendments, directors of 'benefit companies' would be required to consider the interests of persons affected by the company's conduct, and balance their existing duty to act in the best interests of the company with new duties to act in a responsible and sustainable manner. "Responsible and sustainable manner" is defined in the bill to mean a manner of conducting the business that (a) takes into account the well-being of persons affected by the operations of the benefit company, and (b) endeavours to use a fair and proportionate share of available environmental, social and economic resources and capacities. The bill would also require benefit companies to amend their articles to enshrine their commitment to act in a responsible and sustainable manner and promote public benefits, and that they report their performance publicly against an independent third party standard.
While the need for such legislative reforms has been debated, the stated rationale by Andrew Weaver, the bill's sponsor, includes providing clarity both for directors, shareholders and impact investors with respect to the nature and mandate of the benefit company, and protecting director's pursuit of public benefits against shareholder challenges. The Bill is also intended to incentivize companies to pursue socially responsible and environmentally sustainable business practices.
Footnote
1 Bill M209: Business Corporations Amendments Act, 2019, 4th Sess., 41st Leg, British Columbia, 2019, online: https://www.leg.bc.ca/parliamentary-business/legislation-debates-proceedings/41st-parliament/4th-session/bills/first-reading/m209-1
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