Emerging Themes in Canadian Fiduciary Law for Pension Trustees
The Harvard Law School Forum on Corporate Governance and Financial Regulation 2013-07-29
As society increasingly faces governance challenges at all levels, there is a growing recognition of the need to take a longer term and more systemic view. Given the overwhelming incentives for myopic leadership (and action), our common law system—where courts respond to specific fact situations—may play a critical role. One avenue is likely through the concept of fiduciary duty—the legal obligation to act in the best interests of others.
The Supreme Court of Canada has been at the leading edge in developing a coherent view of the nature of fiduciary relationships and their consequences (largely through its recognition of a new class of fiduciary relationship between the Crown and Aboriginal peoples). The logic has permeated more broadly, with the Court focusing on the high degree of specialization and interdependence in society—where we increasingly rely on the services and expertise of strangers. This rise of “fiduciary society” is a classic non-zero-sum game, where we can all benefit but, if trust is eroded, the game fails (and everyone loses). Hence it is that values of trust and loyalty, shaped by “reasonable expectations”, have come to form the basis for the court’s broad standards.