COMM 315 FINAL NOTES

FINAL EXAM: CHAPTERS 6-7-8-9 & CASES

CHAPTER 6: FORMS OF BUSINESS OWNERSHIP

Registration of a business:

• Registraire des Entreprises (Quebec)  Act respecting the legal publicity of

enterprises, obligation for most Quebec businesses to publish their name and
pertinent information
• Industry Canada (federal)  obligations for federally incorporated businesses to
report.

Different forms of business ownership:

1. Sole proprietorship
1.1. Encompasses any and all enterprise undertaken by one single individual, sole
owner and retains full authority.
1.2. Least complex form
1.3. Most common for start-ups/entrepreneurs
1.4. Minor engaged in trade/business is considered of full age and cannot use
defense of lesion.
1.4.1. Advantages: simple to start/dissolve, ne reports to file, complete control
1.4.2. Disadvantages: more difficult to raise capital, cannot sell the business,
can only sell assets, does exist as a separate entity, losses are personal,
unlimited liability.
2. Partnerships
2.1. Two or more people agree to operate a business together, forms a contract,
contract of partnership.
2.2. Must be registered since they operate under a ‘business name’
2.3. Personal unlimited and solidary liability for each partner for all business debts.
2.4. Partnership agreement is necessary.

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2.4.1. Advantages: access capital by adding partners, simple set-up and

registration, simple to dissolve.
2.4.2. Disadvantages: potential conflict between partners, decision of one
partner binding on others, sale difficult, partners can sue each other to
recover anything they ‘overpaid’ to creditors.
3. Limited partnerships (LLP)
3.1. Formed of general partners and limited partners. Limited partners cannot be
involved in management.
3.2. General partners are solidarily liable for the debts to an unlimited personal
extent.
3.3. Limited partners are liable for the debts only to the extent of stipulated amount
the have contributed to partnership.
3.3.1. Advantages: simple registration, inexpensive to start, quite flexible, simple
to dissolve.
3.3.2. Disadvantages: potential for conflict, lack of continuity, difficult to transfer
ownership, restrictions on hiring members of partner’s families.
4. Corporations
4.1. Creation ART. 299 C.C.Q. (date of certificate of incorporation, company’s
“birth certificate”)
4.2. Created by government as separate legal person.
4.3. Federal: Canada business corporations Act.  can operate in any province,
more bureaucratic requirements, higher start-up costs.
4.4. Provincial: Quebec business corporation Act.  can operate in Quebec
4.5. Most complex and expensive
4.5.1. Articles of incorporation: filed by persons who are  over 18, of sound
mind, not a bankrupt.
4.6. Important documents in head office of corporations:
Articles of incorporation and by-laws
Certificate of incorporation
Any unanimous shareholder agreement
Minutes of shareholder and director’s meetings
The register of the corporation’s securities

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Official company seal if any.

4.7. 3 Components of business name: generic (general indication of the enterprise),
specific (clearly distinguishes one enterprise from another), particle (clarifies
legal form of the enterprise) EX: Three Star Brewing Corporation
4.8. Name of corporation:
Name must confirm to law
Must respect trade marks
Must not be deceptive or misleading
Must publish name
Must identify itself as a corporation or other legal person (Ltd.;Corp.;Inc.)

4.9. Art. 309 CCQ  organization that a separate legal person from its owners,
corporation solely liable for debts it incurs.
4.10. Art. 302 CCQ  owns property, business, extra-patrimonial
rights/obligations.
4.11. Corporate Veil  Limits shareholder’s liability (Art. 315 CCQ)
4.11.1. Advantages: separate legal existence from shareholders, limited liability,
can raise capital by selling shares, sale is easier because of share structure,
can live forever unless bankrupt or dissolve, can hire family members, small
business tax deduction, easy to transfer ownership.
4.11.2. Disadvantages: more complex structure, more expensive to start/operate,
complex to dissolve, always requires registration, complex tax treatment.

Shareholder’s agreement:

• Similar to partnership agreements;

• Shareholders want to determine management involvement of shareholders, who
will they vote on for board of directors
• Rules for sale of shares: rights of first refusal, shot-gun clauses
• Non-competition agreements
• Effect towards third parties

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• Effect between shareholders

Director’s POTENTIAL liability:

Exceptions to the rule of corporate veil:

• Fraud (Art. 316,317 CCQ)

• Potential liability of directors:
- Failure to disclose conflicts of interest
- Acquisition of a company property without disclosure to board of
directors
- Fines under environmental protection laws
• Directors are liable for the following debts in addition to the company:
- 6 months wages owing to employees of the company
- Payment of dividends which render the company insolvent
- Loans made to shareholders, directors, officers or employees of the
company
- Redemption of company shares
- GST, PST and D.A.S. (deduction at source)

• Fraud is not the only threshold for liability, nor is gross negligence
 Must not exceed their powers
 Incompetence can lead to liability
 Liability insurance is a must
• How can a director mitigate potential liability:
- Attend meetings of the board
- Have opposition to illegal decisions recorded in minutes
- Resign and stop taking part in management
• Directors cannot escape liability (employee salaries) by resigning, resigned but
continued management functions
• Business judgement rule:
- Are directors liable for: commercially reasonable” but wrong decisions?
- Are they required to make a “correct” decision?

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- Are they required to make a “perfect” decision?

- Did they reject an available alternative which was clearly more beneficial
to the company?

• Applying business judgement rule to director:

- Collect, validate, and analyze all relevant information and
documentation
- Diligent supervision of the management of the company
- Consult expert professional advisors when necessary
- Understand the legal consequences of decision
- Respect fiduciary duty (impartiality, diligence, etc.)
- Take no unjustifiable risks

Directors DUTY of loyalty:

• Obligation of loyalty is based on a need for TRUST between company and

directors
• Act honestly and faithfully
• Act in best interest of corporation
• Avoid conflicts of interest:

Conflict of interest:

• Accepting gifts or personal advantages

• Consulting or advising a competitor
• Trading stock and equities of the company (insider trading)
• Receiving personal discounts from suppliers
• Doing business with individuals not at “arms length”
• Professionals must decline to perform tasks on behalf of clients in case of conflict
• They can also be subject to disciplinary action

Two types of conflict:

- Real/actual: personal interest at odds with interests of the company

- Potential or appearance of conflict: perception of wrong doing

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• Disclosure of a conflict is essential

Insider trading:

• Buying of selling securities using non-public information

• The securities and exchange commission (SEC, autorite des marches financiers)
regulates the securities industry)

CASE 6.1: SUPREME COURT OF CANADA - PEOPLES DEPARTMENT STORES INC. vs WISE

Appeal was dismissed because the Wise brothers could not be held liable for breach of
their duty as directors with respect to the creditors of Peoples. Dismissed with costs to
respondents.

CHAPTER 7: EMPLOYMENT LAW

Individual contract: between employee and employer

Collective agreement: contract between employer and a group of employees, the

group may be called a union.

Contract of employment:

• Contract of limited duration (oral of written)

• Formed by exchange of consent between an employer and employee
• Employee agrees to: do work, accept employer’s instructions, direction and
control
• Employer agrees to pay the agreed remuneration

Characteristics of employment contract:

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Quebec civil code (Art. 2086):

• Indeterminate term employment contract:

o Contract is for indefinite duration, but not forever
o Terminates with notice by employer or employee
• Fixed term employment contract:
o Contract terminates on set date without notice
o Notice is built in

Art. 2087, Employer obligations:

• Allow performance of work: provide a place to work and render it accessible,

provide work
• Protect health, safety, dignity and privacy of employees

Psychological Harassment:

• Vexatious (hostile), Repetitive and undesired behaviour

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• Affects dignity or psychological integrity of employee, results in a harmful work

environment.
• Employee must make claim within 90 days of incident, hierarchy of harasser is
irrelevant
• Art. 123. 15: can dismiss or grant and order employer to do the following:
1. Reinstatement of employee
2. Pay retroactive salary
3. Take action to stop harassment
4. Pay punitive and moral damages
5. Pay an indemnity for termination
6. Pay for therapy
7. Modification of employee’s employment record

Employer’s charter obligations: privacy, discrimination, drug testing, criminal record

Drug Testing: issue  integrity, inviolability, dignity & privacy

• Can employer require drug test?  there must be a legitimate objective, there
must be a minimal infringement of the employee’s rights, the infringement must
be proportional to the objective.

Non-discrimination employment:

• Employer obligation, cannot discriminate based on s.10 characteristics

• Discriminatory acts by other employees can result in dismissal
• The entire employment process from the interview to retirement (hiring,
promotion)

Job Applications:

• Employer cannot require you to provide info based mentioned in s.10

• Except affirmative action program or is s. 20 applies

Disqualification du to criminal record:

• Criminal record cannot be used against you for purposes of employment

o Based on nature of employment

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o Based on nature of infraction

o Criminal record cannot be used against you if you received a pardon
(granted 3,5, or 10 years after)

Employee obligations

• Work with prudence and diligence and as directed

• Loyalty, be faithful and protect confidential information
• Prudence, reasonable care
• Act honestly and faithfully

Whistle blowing: disclosure of confidential information for a legitimate public purpose

Conflict of interest: Violates duty of Loyalty  ‘breach of trust’

• Actual conflict: personal interests at odds with interests of the employer (harm to
employer)
• Potential or appearance of conflict: Accepting gifts (no harm to employer but
‘looks bad’)

Non-competition agreement: In contract law, a non-compete clause (often NCC), or

covenant not to compete (CNC), is a clause under which one party (usually an
employee) agrees not to enter into or start a similar profession or trade
in competition against another party (usually the employer).

• Generally, this violates public order rules  employee’s fundamental right to

earn a living, usually only acceptable for key employees, non-compete clauses
rarely hold up in court.
• FORM: written agreement is required; may be signed before, during or after
expiration of employment contract; in express terms, must detail what job
employee is prohibited from doing, what geographic area, what time period it
will be in force
• Must be reasonable, balance between (i) employer’s right to protect its
legitimate business interests & (ii) employee’s right to earn a living
• THREE elements of reasonableness:
o What is employee prohibited from doing;

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o What time period during which employee is prohibited from competing;

o What geographic area where the employee is prohibited from working;
• Factors that may justify: is employee able to harm business due to intimate
knowledge of affairs; is this a key employee.
• Burden of Proof: employer must prove that agreement is reasonable, that he
has a legitimate business interest.

Contractor vs Employee:

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CASE 7.1: QUEBEC SUPERIOR COURT – KING vs BIOCHEM THERAPEUTIC INC.

Basic facts: Dr. King was fired less than a year after being fired, according to King she
was fired suddenly without notice. The evidence supports Dr. King and not BioChem
who had no written proof of warning Dr. King.

3 verbal warnings; not substantiated.

 BioChem did NOT discharge its burden of proving prior notice to Dr. King.

Damages sought:

1. Salary, 14 months
2. Benefits
3. Vacation
4. Loss of bonus
5. Damages due to stress, anxiety and inconvenience
6. Damages to reputation
7. Relocation and placement expenses
8. Stock options

TOTAL: $240,105.41

Conclusions:

MAINTAINS the action of Dr. Ann Christie King

DISMISSES plea of BioChem

CONDEMNS BioChem to pay damages totally $240,105.41 with interest at the legal rate
and additional indemnity provided for in Art. 1619 of CCQ WITH COSTS.

CASE 7.2: QUEBEC SUPERIOR COURT – DUBÉ vs VOLCANO TECHNOLOGIES INC.

Basic facts: Mr. Dubé is claimed 9 months salary plus car allowance and bonus after
being laid off due to financial reasons by the company.

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 The reference to the LSA for ‘terminaison pour cause or motif sérieux’ could only be
applied to Mr. Dubé’s behaviour. Also, the renunciation of his rights under the civil code
should have been clear and unambiguous.

Conclusions:

CONDEMNS defendant to pay plaintiff 4 months salary, totalling $22,461 plus interest
and indemnity as of the whole with costs.

CASE 7.3: QUEBEC SUPERIOR COURT – HASANIE vs KAUFEL GROUPE LTD.

Basic facts: Mr Hasanie accusing Kaufel of wrondfull dismissal, however the company is
stating cause. Mr. Hasanie, a high level employee, carried out plans to buy a
competing company, constituting a breach of trust to his duty of loyalty giving grounds
for his dismissal.

 Propositions of defendants are well founded, based on evidence; plaintiff did not
establish his case of having been dismissed without cause.

Conclusions:

GRANTS defendant’s plea

DISMISSED plaintiff’s action

THE WHOLE with costs.

CASE 7.4: QUEBEC SUPERIOR COURT – COPYFAX INC. vs LAMBERT

Basic facts: application for interlocutory injunction against former employee based
upon a non-competition clause.

Article 2089 CCQ explicitly imposes the burden of proof to the employer to prove the
validity of the restrictions imposed upon an employee.

Employee raises the question as to reasonable and excessive impact that an adverse
judgement would have on his ability to provide for his young family.

Test of convenience:

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1. No evidence that petitioner’s clientele has been solicited or tampered with.

2. Prohibited area of 25 miles would deprive the employee of earning a living.
3. The duration of 14 months is excessive, especially since it offers no added security
to the company.

 CopyFAx has not established the apparent right which it seeks to enforce.

Conclusions:

GRANTS an interlocutory injunction to remain in effect until final judgement

ORDERS Claude Lambert to cease doing business with competitor

ORDERS Claude Lambert and Le Groupe AMC to immediately return to the plaintiff all
documents or materials relating to its client list

CASE 7.5: SUPREME COURT OF CANADA – CABIAKMAN vs INDUSTRIAL ALLIANCE LIFE

INSURANCE Co.

Basic facts: question raised on scope and nature of an employer’s power to suspend an
employee. The initial judgement concluded that the suspension of Cabiakman was
justified, however an unpaid suspension was not.

 administrative suspension without pay, to which employee has not consented, the
employer is in breach of its obligation under art 2087 CCQ to provide work & pay to the
employee.

Conclusions:

DISMISSES the appeal with costs

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CHAPTER 8: CIVIL LIABILITY

Categories of civil liability (CL):

1. Contractual CL: liability for damages for failure to respect contractual obligations
2. Extra-contractual CL: liability caused by our conduct, negligence, etc.
3. Professional liability: liability for damages caused by professional errors in the
exercise of one’s profession
4. Criminal liability: Violations of the criminal code
5. Penal liability: Penalties imposed by various statutes (highway safety)
5.1. Includes disciplinary liability: professional orders impose codes of conduct

Source of CL:

• Art 1457 CCQ

• Every person has general obligation not to cause harm
• Failing which, must repair injury – damages:
o Bodily injury
o Moral injury
o Material injury
• Violation of contractual obligations can also result in liability (1458 CCQ)
o Ex: Signing a promise to purchase

Three elements required to establish liability:

• The person must have committed a fault

• The victim must have sustained damages
• There must be a direct causal connection between the fault and the damages

Fault: a conduct, action, gesture, negligence, etc.

• That a reasonably prudent and diligent adult would not have committed
• Intention not required
• Person must be endowed with reason  able to understand the consequences
of his/her actions
• Violation of the normal ‘duty of care’ that we all have in society

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Injury (Damages)

• Bodily injury: physical harm to one’s person

• Moral damages: pain and suffering, psychological suffering, loss of dignity, loss of
enjoyment of life
• Material damages: loss of income, expenses, damages to property
 Punitive damages are not generally awarded, except: psychological harassment
(LSA), violation of one’s charter rights
 Assessing punitive damages: amount sufficient to fulfill preventive purpose (not
compensatory but dissuasive, not a fine but paid to victim) taking into account:
gravity of debtor’s fault, debtor’s patrimonial situation, the amount of moral &
material damages, the fact that the damages are assumed by a third person
(insurer)

Causal Link:

• Damages cannot be too remote from the fault

• What fault was committed?
• Was the damage caused by the fault?
• Was the damage caused by the person who committed the fault?
• If yes, then that person must ‘repair damages’, repair=paying $$$ equivalent of
victim’s loss

Presumption of liability  Vicarious liability: liability for the actions of others or for our
property (e.g. parents, employers, tutors, owners or movable and immoveable
property, manufacturers)

The Good Samaritan: A defence may exist if someone caused damages in the process
of helping others (e.g. injuring someone while helping to save them from drowning)
LIMITATION ON LIABILITY (Mitigation and exemption of liability)

Superior Force: Damages caused were not within control of person being sued (e.g.
earthquakes, flood, lightening, etc.)  LIMITATION ON LIABILITY (Mitigation and
exemption of liability)

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Another person made it worse (Novus Actus Interveniens): The person being sued may
be found totally or partially free of liability because the fault of another weighs heavier
than their own fault. (e.g. Fireworks case)

1472: disclosure of trade secrets;

• Disclosing trade secrets can result in liability;

o I.e. employees having access to sensitive corporate secrets;
• May disclose without incurring liability;

• If disclosed for reasons of general interest such as public health or safety;

o Dumping toxic waste;

o Use of harmful chemicals in food, toys etc;

1477 CCQ: Victim’s assumption of Risk

• Defendant can prove that:

o The victim knew or could have known of the risks associated with his
actions;
 Ex. Going skiing can result in injury;
o The victim could have foreseen the injury;

1473 CCQ: manufactured products:

• I.e., even though a product is defective, the victim took an unnecessary risk. (I.e.
knowingly misused product);
• I.e., even though a product is defective, the victim ignored safety precautions;

1477 CCQ: Victim’s assumption of Risk;

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• Although victim may have been imprudent, it does not entail renunciation of his
remedy;
o Victim can still sue although he shares some of the liability;
o Defendant’s liability will be reduced in proportion to the victim’s fault;

1473 CCQ: Victim’s assumption of Risk;

• Manufacturers can also prove that:

o According to the state of knowledge at time of manufacture, the
existence of the defect could not have been known; and
o He was not neglectful of his duty to provide information when he became
aware of the defect;

1474 CCQ: Exclusion of liability;

• Cannot exclude or limit liability for bodily or moral injury;

• Can only exclude or limit liability for material injury;

• Exclusion or limitation of liability for material injury is not valid if caused by an

intentional or gross fault;
o i.e. gross recklessness or carelessness;
• Therefore, Limitations of liability clauses are only valid for material damages;

1475 CCQ: Warning signs/notices;

• Valid part of contracts if the party selling it proves the victim was aware of its
existence at the time the contract was formed;

• Such notices are a valid exclusion of liability and form a valid part of contract
with the purchaser;

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o Ex. Sticker on a lawnmower or power tools saying “read manual before

operating”;

1476 CCQ: Warning signs/notices;

• Such notices are not valid in respect of third persons, except as a warning of a
danger;
o Third parties did not sign the contract (I.e. neighbour who borrowed the
lawnmower);

o No different than: “Beware of dog” on certain signs;

o I.e. do they convey the necessary information?

Apportionment (Sharing) of liability:

• More than one person having caused damages:

• Includes the victim if committed a fault such as assumption of risk;

• Liability is shared by all in proportion to the seriousness of their faults;

Aggravation of injury by the victim:

• Defendant is not liable for any aggravation of the injury;

• Defendant is not liable for any damages that the victim could have avoided;
o i.e. mitigation of damages;

Solidary Liability:

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• Several persons have jointly taken part in a wrongful act; and

• It is impossible to determine which of them actually caused it;

• They are solidarily liable;

o i.e. either for the full amount;

o i.e. Ford and Firestone in the case of the Ford Explorer accidents;

One person exempted from liability (1481CCQ)

• Refers to legal exemptions;

o i.e. governments in some cases;

o Adults under protective supervision;

o Diplomatic immunity is some cases;

• In such cases, liability is assumed equally by any other persons liable for the injury;

Prescription period for CL:

• Court action must be taken before statutory limitation period expires;

• Extinctive prescription;
• Generally 3 years from the date of the fault committed;
• After the 3 years expire, too late to make a claim;
• Civil Code an d other laws may set other prescription deadlines;
o Ex. Suing a municipality for material damages;
o 15 days to notify; 6 months to sue;
No Fault Liability:

• Various laws prevent us from suing for damages;

• They establish universal compensation plans;

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• Quebec Automobile Insurance Act;

o Universal coverage for victims of automobile accidents;
o Coverage for bodily injury and moral damages;
o Proof of fault not required;
o Victim cannot sue the person responsible for accident;
o Compensation established and paid by the SAAQ;

• Industrial Accidents and Occupational Diseases Act;

o Universal coverage for victims of workplace accidents;

o Coverage for bodily injury and moral damages;
o Proof of fault not required;
o Victim cannot sue employer for accident;
o Compensation established and paid by the CSST;

• Crime Victims Compensation Act;

o Supplemental compensation for victims of crime;

o Covers material damages, bodily injury or death;
o Amount of compensation is not generous;
o You can make a claim under CVCA or sue the person having committed
the crime to claim damages;
o If you opt for CVCA, you cannot sue;
o If you sue and get less than CVCA grants, you can claim the difference
from CVCA;

CASE 8.1: QUEBEC SUPERIOR COURT – HARRIS vs OSTROMOGILSKI

Basic facts: Plaintiff is claiming damages he suffered at the hand of defendant during a
scuffle at defendant’s residence; each party is accusing the other of being the
instigator.

Corroboration by police officer and medical report from nurse point that plaintiff’s
version is correct.

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The court concludes that plaintiff discharged his burden of proof.

Conclusions:

CONDEMNS defendant to pay plaintiff $5880.00 with interest the whole WITH COSTS

CASE 8.2: QUEBEC SUPERIOR COURT – WALKER vs SINGER

Basic facts: Relationship went sour, destruction of clothing and criminal charges
against defendant for sexual assault.

Burden of proof: it is up to the plaintiff to prove a fault (Singer)

 The court concludes that she fabricated the sexual assault story

To make a false complaint is a tort (a wrongful act or an infringement of a right (other than
under contract) leading to civil legal liability)

‘A good reputation is closely related to the innate worthiness and dignity of the
individual. ‘

- Damages to reputation and dignity; Psychological damages, stress and

inconvenience.
- PUNITIVE damages  willfully accusing someone of a serious criminal act
when one knows this to be untrue, is extremely serious.

Conclusions:

GRANTS in part the action of Gregory Walker

CONDEMNS Melissa Singer to pay Walker the sum of $7,760

CONDEMNS Melissa Singer to pay Walker as punitive damages $3,000

DISMISSES Melissa Singer’s cross-demand

THE WHOLE WITH COSTS

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CASE 8.3: ONTARIO COURT OF APPEAL – WALFORD vs JACUZZI CANADA LTD.

Basic facts: Correena Walford, 15 year old girl, went down a slide into her pool and
broke her neck, making her quadriplegic. The pool store assured her mother that it
would be ‘okay’ and ‘no problem’. The sole issue of liability on the appeal is whether
the pool store breached a duty of care.

 Duty of care was established between Mrs. Walford and Pioneer Pools

The danger from using a pool slide in relatively shallow water is not an OBVIOUS danger

Conclusions:

Applying the correct standard of care, the respondent, Pioneer Pools, was negligent
and breached its duty by failing to warn Mrs. Walford.

 Contributory Negligence: Correena is partially responsible for the accident because

she did not heed her mother’s warning; she is liable for 20%. The assessed damages of
over $5 million will be awarded accordingly.

CASE 8.4: SASKATCHEWAN’S COURT OF QUEEN’S BENCH – MORSE vs COTT BEVERAGES

WEST LTD.

Basic facts: Tami Morse use a nutcracker to open a difficult bottle cap, it explodes and
thrust the cap into her eye causing serious damage.

 Cott should have known or knew that the quality control wasn’t up to par based
on the Alcoa instructions for capping which warned of eye injuries.

Conclusions:

DAMAGES of $36,000 awarded to Tami Morse.

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CHAPTER 9: ETHICS

Ethics:

• Ethics are subjective---they will vary from time to time, from place to place and from
culture to culture.
• At this time there is no one set of universal ethics.
• Ethics deal with the well-being of people and society.
• Ethical behaviour should reflect the moral values of society.

Fundamental principles of Ethics:

• Be respectful of others
• Act honestly and fairly
• Comply with the law
• Do not act maliciously
• Inspire trust

Principles of business Ethics:

• Be objective and impartial

• Be prudent and diligent
• Maintain confidentiality
• Whenever possible fully disclose
• Avoid conflict of interest
• Comply with business standards, policies and laws

LAW vs ETHICS

Law and ethics are separate concept but they are interrelated and interdependent.

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• Ethical principles are sometimes incorporated into law (duty to be honest and
faithful).
• The law may prescribe minimum standards which may in certain cases not be
ethical (minimum wage vs fair wage)

• There is generally a lag between social changes fuelled by developing ethical

norms and the law. But the law eventually catches up.
o Right to die
o Same-sex marriages
o Legalization of marijuana

International Business and Ethics:

Canadian Companies operating abroad :

• There may be a gap between the stricter law in Canada and less stringent laws
aboard. (for instance with respect to labour law)

• Should the Canadian company seek to exploit the less stringent laws?

• Should they pressure the host nation to change their laws?

• Should they voluntarily adopt strict standards?

United Nations Global Compact (UNGC)

UNGC 10 principles:

1. Support international human rights

2. Not be complicit in human rights abuses
3. Uphold collective bargaining rights and freedom of association
4. Eliminate forced labour
5. Abolish child labour

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6. Eliminate discrimination in employment and occupation

7. Precautionary approach to environmental challenges
8. Promote greater environmental responsibility
9. Encourage environmental friendly technologies
10. Avoid corruption in all its forms

International Business Ethics Extraterritoriality: Canadian Courts assume jurisdiction over

certain acts committed outside of Canada by Canadian Nationals.

Resolving ethical issues:

• Determine the interests of all the stakeholders

• Try to weigh the interests of the various stakeholders
• Seek and promote a win-win solution
• Seek to be proactive rather than reactive in addressing ethical issues

Professional Standards:

• Objectivity: use one’s own judgment to provide opinion to client. (not be swayed by
what client wants to hear)

• Comply with law

• Avoidance of inappropriate behaviour

• Respect of client’s confidentiality

• Duty of care  act in client’s best interest—abide by fiduciary duty

• Avoidance of conflict of interest.

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Corporate Codes of Conduct:

• Sets out acceptable rules of behaviour in the workplace—these rules form part of
the individual work contract of the employee.

• These codes must be brought to the employee’s attention when hired.

• These codes should provide guidance on the acceptance of gifts from clients and
the rules of whistleblowing.

Responsible Investing

• Reflects the new trend of refusing to invest in “harmful industries”—those that a

harmful to human health, the environment or human rights.

• The short-term investing for profit only is starting to be replaced by a long-term

approach looking at socially acceptable practices which lead to profit. (green
energy etc…)

Corporate Governance: Traditional corporate governance has the shareholders

electing directors and directors appointing officers. Clearly a majority shareholder can
pressure the board of directors for a certain decision favouring the shareholder even if
the decision is not in the best interest of the company.

• The new principles have Independent Directors selected with appropriate

qualifications and expertise who deal to a large extent ethical issues which may
arise including remuneration of internal directors.

• The law has clarified the fiduciary duties of directors towards shareholders and
towards the company itself

ETHICS IS KNOWING THE DIFFERENCE BETWEEN WHAT YOU HAVE A RIGHT TO DO AND
WHAT IS RIGHT TO DO

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