Had Tim Cook been head of a Canadian corporation, and had the NCPPR tried to sue him for breaching his fiduciary obligation to the company, he would have a very good argument in his favor that pursing environmental initiatives is often going to be in the best interests of the company. As Peoples and BCE established, the best interests of the company are not merely maximizing shareholder value. Instead, directors and officers must take the company’s long term interests into account. Other stakeholders, including the environment, can be considered when making decisions for the company.
Because of the business judgement rule, the court would be unlikely to interfere in this situation, unless it looked like Cook was pursuing environmental initiatives for some fraudulent purpose. The NCPPR would surely love to classify all environmental initiatives as some sort of fraudulent hippy scheme concocted by Al Gore, but I find it doubtful that the court would side with them there. Given that carbon taxes are slowly starting to emerge, there is a good argument that getting a head start on reducing carbon footprint are in the best interests of the company. The issue of brand image should also factor into business decisions, and environmentalism can now be an important consideration for consumers when they choose products. Because of all these factors, I think it would be extremely unlikely that Tim Cook would run into much trouble, should he be challenged on his environmental corporate policy decisions.
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I think, in Canada, the business judgment rule has come to a point that, if the directors can justify their actions through some kind of evidence and can prove they did not do it for a fraudulent purpose, the courts are willing to recognize that decision. It could be a good thing as directors and management are allowed to make decisions and execute them without shareholder interference, but at the same time, the business judgment rule excludes shareholders from providing their input and say into the corporate affairs in which they have a stake.
This is sort of akin to admin law where courts are unwilling to interfere or change the decisions made by government tribunals and are willing to defer to their expertise. Courts defer to the “expertise” of the directors and managers and are only willing to interfere if there is fraud involved in the decision. But the problem here is tat while governments tribunals are strictly regulated by their enabling statutes, corporations actions are not. Also, it is often difficult to tell what is actually in the best interest of the corproation. Hence, i feel that another way of regulating corporate conduct is required to provide better protect shareholder rights. Nevertheless, at the same time, too much regulations might hinder business actions and ultimately make it too hard for a company to do business, hurting the market eventually.. (as some might say) So regulators and courts are caught in a dilemma I feel.
I think your highlighting of brand image as a concern is a vital one. It would be appropriate for Cook to argue that Apple pursues a demographic that prizes environmental stewardship both for its own sake and as virtue signalling. In that context, it may well be corporate suicide to disregard the public image implications of polluting or otherwise harming the environment.
I’m also curious as to whether courts would accept a slightly far flung argument from utilitarian ethics. Given an expanding population and the expected continuance of our species, if we genuinely believe that all human life is equal and deserving of equal consideration then the welfare of future generations must always outweigh the welfare of current generations (within common sense limits, i.e. no extinction) in crafting policy and actions.
To bring this back to business law, one principle of the corporation is that it is perpetual. Barring a deliberate choice to end it or bankruptcy, the corporation outlives all of its directors, shareholders, and managers. Morbidly, Apple may well be a good example of that. Given that the best interests of the company require a customer base that lasts as long as it does, could Cook argue that if anything, he has an obligation to the corporation to prevent global catastrophe?
I realize this is quite a stretch but it seems to me that the principles are sound. If the court did accept this argument, what other doors might it open?