This year, Canada and the EU shook hands on the biggest trade agreement in Canadian history. So businesses must adapt to complex new business practices, regulatory environments and economic opportunities.
“By anticipating these complex and dynamic issues, companies can better ensure their long-term health and protect their good reputations,” advises Sean Weir, national managing partner and CEO of BLG.
And here are the top 10 issues for business owners in 2014.
1. Employee rights, employer wrongs: Employers need to rethink termination clauses in employee contracts. Recent case law may make them unenforceable. At the other end of the employment spectrum, the patchwork of provincial regulations across the country that cover unpaid internships has come under intense scrutiny and will likely result in changes.
2. Entrepreneurs, access to capital and the crowd: Crowdfunding sidesteps the cost and expense of venture capital and private placements, and it also skips due diligence and other investor protections. Meanwhile, Ottawa has launched the Start-Up Visa program to lure international entrepreneurs to Canada if they can win a piece of Canada’s small venture capital or angel investor pie. Canadian securities regulators will continue to be challenged to properly balance the protection of investors, fostering of confidence and operation of fair and efficient capital markets.
3. Activist shareholders: They want say on pay, board nominations and succession and corporate investment choices. They want management and directors to deliver transparent, objective and informed business judgments, as well as superlative performance. Demand for shareholder-sponsored directors, and other shareholder propositions will proliferate. Shareholder majority voting will hit the boardroom agenda, but can a company be run by proxy battle?
4. Energy policy and social licensing: Washington and Ottawa will work to find a way to get Canadian crude to U.S. refineries, while the provinces seek agreements on the interprovincial flow of oil & natural gas. Meanwhile, the thawing of the Northwest Passage makes investment in the Arctic Bridge between Churchill, Manitoba and Murmansk, Russia an important economic opportunity. But everywhere there are First Nations lands that must be crossed to leverage those opportunities, creating requirements for both legal and social license from aboriginal communities.
5. Whether Canada’s open for business: Building pipelines, inside the country or cross-border, will continue to be a regulatory-political morass, and transporting product by rail will face serious scrutiny and new regulatory challenges. For all foreign investors, the Investment Canada Act, “net benefit” test, uncertainty around what could be deemed a state owned entity as well as no guidance on what might trigger a national security review, add layers of complexity that suggest “Open For Business” is highly conditional.
6. Intellectual property: Some industries such as high tech and life sciences are highly focused on intellectual assets but in general intellectual property is under-exploited, including in natural resource fields such as oil and gas. Knowing how to identify, license, protect, enforce and monetize intellectual property will grow in importance in 2014.
7. Before you hit the “send” button: Canada’s new anti-spam legislation is coming into force in 2014, giving consumers a legal basis to complain about the emails and other electronic messages they receive. And soon consumers will have the added benefit of a spam reporting centre, which will allow consumers to report commercial electronic messages sent without consent or with false or misleading content. While the consumer’s right to legal action will not take effect until 2017, organizations need to act now to make sure they comply by July 2014 or risk hefty fines. Compliance with existing privacy laws may not be sufficient.
8. Data security: Whether it’s locked down in a server room, floating in the cloud, forgotten on a smartphone left in a cab, or on a misplaced thumb drive, organizations large and small have a legal responsibility to protect their employees’ and clients’ data. They also have an obligation to shareholders to protect their confidential information and intellectual property and protect against intentional attacks on their networks and systems. Organizations will continue to struggle to deal with increasingly complex legal obligations to proactively protect data and report breaches to regulators.
9. Social media: A social media post is a document, which means all privacy, communication and document preservation policies are in play. A posting might mean you waive lawyer-client privilege. You might be served legal documents through a social media site. Your customers are using it, your detractors are using it, and you can’t stop employees from using it in 2014 so you’ll need to know how to protect yourself.
10. Governance: Besides securities commissions and stock exchanges, activist shareholders have never been more powerful, or plaintiff class action law firms quicker to take action. Self-regulating organizations such as IIROC and the MFDA are increasingly vigilant in their own investor protection and oversight role. Such scrutiny is true not only for publicly-held corporations but also for privately-held ones. Does your board, compliance personnel, and officers understand their risks and obligations? Is D&O insurance enough protection?