Stephane Rousseau - Business Law and Practice Seminar

You are invited to attend a seminar delivered by Prof. Stéphane Rousseau on governance and business law.

The Centre for Business Law and Practice is delighted to announce that Professor Stéphane Rousseau will be visiting the Centre during October and delivering a seminar which will appeal to anyone with an interest in business law and practice.

Abstract

Corporate governance research has been shaped by the Berle and Means model of publicly-traded corporations that are characterized by the separation between ownership and control. Yet, a look at the ownership structure of public corporations around the world shows that this model is the exception rather than the norm. Indeed, the majority of public corporations across countries have a dominant or controlling shareholder. Ownership concentration generates different governance problems than ownership dispersion, the most important of which is the appropriation of private benefits of control namely through a related party transaction (RPT). Hence, over the last few years, the regulation of RPTs has attracted increasing attention on the part of academics, lawmakers and regulators.

Canada is an interesting laboratory to study the law governing related party transactions because of the distinctive features of its capital markets and its regulatory landscape. The ownership structures of Canadian corporations resemble more closely those of continental Europe and South East Asia than those of the United States. Further, deviation from the one share/one vote rule is widespread in Canada. Thus, the primary corporate governance problem in Canada relates to the risk that dominant shareholders extract private benefits of control at the expense of the corporation and its public shareholders. As for regulation, publicly-traded corporations are subject to provincial corporation and securities laws, which are largely harmonized at the national level.

The paper reviews the law governing RPTs in Canada, which is the product of corporate law and securities regulation. Although they are not prohibited, conflict of interest transactions are regulated by an intricate set of ex ante rules and ex post standards of review that impose procedural and substantive requirements. Specifically, the presentation shows that the following fundamental questions lead to many answers: 1) Who is charged with the screening of RTP?; 2) How does the screening work?; 3) When does it operate?

Against this backdrop, the paper analyses the role of procedural safeguards and substantive review by looking at two conflicting cases regarding the impact of Majority of the Minority (MOM) approval. It also presents data on the use of MOM approval by reviewing over 100 transactions between 2013 and 2018 where this procedural safeguard was mandated. The anecdotal and empirical discussion serves to put MOM approval in perspective with respect to its protective function. The analysis closes with a discussion of a recent initiative on the part of Canadian securities regulators, which translates into a heightened involvement in the review and oversight of conflict of interest transactions. On the one hand, this initiative may buttress the effectiveness of MOM approval by reinforcing the procedural safeguards. On the other hand, it may limit the effectiveness of MOM approval as a negotiating device for investors. 

About the speaker

Professor Stéphane Rousseau is Professor and Chair in Business Law and Governance at the Université de Montréal.

Stéphane Rousseau is a Full Professor and incumbent of the Chair in Governance and Business Law at the Faculty of Law, where he directs the Centre de droit des affaires et du commerce international. He holds a Doctorate in Law from the University of Toronto, as well as a Master’s Degree in Law from Université Laval. He is a member of the Barreau du Québec. In addition to serving on the board of directors of the Chambre de la securité financière, he is also a member of the Disciplinary Committee of the Montréal Exchange.

Please click here to register for Stéphane's seminar.

The lecture will be followed by a wine reception. 

Location details

School of Law
Liberty Building
University of Leeds
LS2 9JT

For sat navs, please use the postcode for Moorland Road, LS6 1AN. 

The Liberty Building can also be found on the campus map. 

All welcome. This is a free event, though registration is required.

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