Landmark Case: Fiduciary Duty of Directors and Officers in a Corporate Takeover – BCE v. 1976 Debentureholders

Each OJEN Landmark Case includes a case summary, classroom discussion questions and worksheets that encourage students to explore both the legal and societal importance of the case.

BCE v. 1976 Debentureholders is a corporate law case concerning the fiduciary duty of directors of corporations to stakeholders, including shareholders and creditors. By ruling in favour of BCE, the SCC upheld the precedent established in Peoples v. Wise. The Court affirmed that directors must act in the best interests of the corporation, and in doing so, may consider the interests of various affected groups, including shareholders and debentureholders, but are not required to do so. Ultimately, the directors must act in the best interests of the corporation and its operations. The role of the court is not to second guess the business decisions of the directors, who are expert business persons, but rather to ensure that a legally sound decision making process was followed.

This resource includes explanations and activities related to fiduciary duty and duty of care, and a classroom debate activity on shareholder versus stakeholder primacy.