Seite - 242 - in VULNERABLE - The Law, Policy and Ethics of COVID-19

VULNERABLE242 corporation as a public institution.34 But while the Court’s approach does not mandate shareholder value maximization, it does not clearly banish it either.35 Not surprisingly then, BCE did not usher in a new era of corporate decision-making aligned to principles of corporate social responsibility. Expanding the list of stakeholders whose inter- ests could be considered when assessing the best interests of the corporation on its own does not address the limited way in which corporate duties were applied. Despite appearance to the contrary, duties of corporate directors did not extend outside the scope of tra- ditional corporate law.36 As such, only those stakeholders with spe- cific private economic interests in the corporation had an enforceable remedy. As Carol Liao has observed, this means that it is only where the state deems consideration of other factors to be imperative, and mandates accountability through express  regulation, that there will be an independent basis on which to intervene outside this narrow range. This leaves an important gap because it enables corporations to externalize costs that do not directly affect shareholder wealth, such as environmental or consumer harms, where these are insufficiently enforced by regulation.37 Even before the pandemic, there was an increasingly loud chorus of voices, many of whom were proponents of sustainable governance,38 who challenged the view that corporations are entitled to ignore this kind of collateral effect of their decisions.39 Since a stable market economy depends on state support of the underlying rights 34. A prominent proponent of this view advocates for treating corporate law as a branch of public law: Kent Greenfield, The Failure of Corporate Law (Chicago: University of Chicago Press, 2007). 35. In a key decision on corporate remedies, the Ontario Court of Appeal cited BCE in support of the view that most of the time, the best interests of the corporation are those of shareholders, taken collectively. Rea  v  Wildeboer, 2015 ONCA 373. 36. For one of the most quoted defences of the shareholder primacy model, see Hansmann & Kraakman, supra note 29. 37. Carol Liao, “Power and the Gender Imbalance in Corporate Law” in Beate Sjåfjell & Irene Lynch Fannon, eds, Creating  Corporate  Sustainability:  Gender  as  an  Agent  for  Change (Cambridge, UK: Cambridge University Press, 2018) 282 at 289-90. 38. See e.g. Beate Sjåfjell & Irene Lynch Fannon, Creating  Corporate  Sustainability:  Gender  as  Agents  for  Change (Cambridge, UK: Cambridge University Press, 2018); Lynn Stout, The  Shareholder  Value  Myth:  How  Putting  Shareholders  First  Harms  Investors, Corporations, and the Public (San Francisco: Berrett-Koehler, 2012); Margaret Blair & Lynn Stout, “A Team Production Theory of Corporate Law” (1999) 85:2 Va L Rev 247 at 248-328; Kelly Testy, “Linking Progressive Corporate Law and Progressive Social Movements” (2002) 76:5/6 Tul L Rev 1227 at 1227-52. 39. Liao, supra note 37 at 290.