From Governance and AI to the Urgent Need for Renewed Business Succession
Image Courtesy : Michel J. Paradis
As AI transforms business decisions and Canadian SMEs face succession challenges, agile governance, comprehensive valuations, and proactive preparation are essential for long-term economic resilience.
I recently had the privilege of attending and speaking at the CanadianSME Summit in Toronto. This national event brought together decision-makers, thought leaders, and experts from a wide range of professional backgrounds. Corporate governance emerged as the common thread running through all our exchanges. In my case, it was highlighted primarily through the strategic lens of responsibly integrating artificial intelligence into business decision-making—the topic of my keynote. However, my discussions also focused intensely on the growing complexity of business transfers in Canada.
Governance and AI: Managing Sensitive Decision-Making and Protecting Reputation
I would like to revisit the main theme of AI and its relationship with decision-makers. One reality we can no longer ignore is the complex and exceptionally critical dynamic unfolding between decision-makers and their use of artificial intelligence. As AI rapidly embeds itself within our organizations, its application in guiding or automating sensitive decision-making raises challenges of unprecedented gravity.
It is vital to remember that legal, ethical, and reputational risks are far from abstract illusions—they carry a very real impact on our businesses if left unaddressed:
Legal Liability and Duty of Care: How far does the responsibility of directors and officers extend when a predictive algorithm influences a strategic, financial, or Human Resources decision?
Brand Reputation Protection: A decision perceived as opaque, biased, or unfair generated by a decision-support tool can destroy in a matter of hours a organization's credibility built over decades.
It has become clear that governance can no longer be confined to a role of passive compliance. We must rethink this dynamic through the lens of risk management. Governance must evolve into an agile and proactive framework—one capable of guiding AI-driven innovation without paralyzing the business, all while protecting its most crucial assets: its decision-makers.
The Unique Context of Business Succession: A Worrying Outlook for the Ecosystem
The surprise—which, in hindsight, isn't much of one given the current economic climate—was the impressive number of attendees with whom I was also able to address the unique and highly sensitive context of repreneurship and business succession. I engaged in extensive discussions with business leaders, financial and legal professionals, as well as mediators who, like me, step directly into the process when the demands and tensions among stakeholders require it.
From these discussions, concerning observations emerged for many of us. Fundamental questions were raised regarding the overall health of the Canadian business community:
- Is the current approach to business transfers truly adapted to on-the-ground realities and the expectations of new generations?
- Is entrepreneurship in Canada still as valued, encouraged, and supported as it once was?
- Do administrative, tax, and regulatory burdens represent major hurdles that discourage prospective successors?
In short, what is the true state of health of our business ecosystem? The shared diagnostic on-site demonstrates an urgent need to rethink our methods in order to prevent an irreversible wave of local business closures.
Attractiveness, Valuation, and Governance: Key Pillars for a Sustainable Future
A key takeaway stood out above all else: enhancing the attractiveness of our SMEs requires top-priority interventions. We can no longer settle for superficial solutions.
To revitalize the Canadian economic fabric, two priority lines of action are essential:
- Comprehensive Revaluation of Our Businesses: The value of an SME is no longer measured solely by its balance sheet. It must encompass digital agility, governance clarity, and the human potential within its walls.
- Adapting Governance to Next-Gen Successors: The leadership styles of founders do not necessarily align with the needs, values, and working methods of today's buyers and successors. SME governance must evolve to become more inclusive, flexible, and aligned with emerging managerial cultures.
Preparation: The Key to Transition and Immediate Sustainability
I sincerely hope that our exchanges at the summit will allow us to push these efforts further. There is urgent work to be done on business culture, vision alignment, and communication between sellers and buyers. Early preparation is more critical than ever.
However, it must be strongly emphasized that this rigorous preparation does not merely serve to guarantee the future success of a business transfer. In the fragile, unstable, and increasingly unpredictable economic environment we face today, structuring governance and clarifying vision is an immediate necessity. It is the only way to ensure the current resilience, competitiveness, and sustainability of our companies in the face of oncoming economic headwinds.
There is a vital need for a broader dialogue—a genuinely aligned conversation on the challenges ahead. My time at the CanadianSME Summit confirms that events of this caliber offer a valuable pathway toward support that is more deeply rooted in the actual needs of our entrepreneurs. Beyond technology and figures, the ultimate health of our economy will always rest on the quality of our human relationships, the vitality of our enterprises, and the strength of our governance.
About Author
Michel J. Paradis is Lecturer in the Professional Development Service at Université Laval, as a Mediator in Civil and Commercial Matter. He is a Governance Expert, advising on ownership transfers, transactional matters and decision‑making by leaders in their use of AI. He supports executives, public organizations and SMEs for more than twenty‑five years.
He is the author of Réussir le transfert d’entreprises: approches actualisées pour un accompagnement gagnant (2024), which proposes a renewed framework for ensuring organizational continuity, including ESG criteria and the UN Sustainable Development Goals in succession planning. He also published HUMANITAS: l’IA peut‑elle servir le bien commun? (Éditions GML, 2026), which examines how to govern artificial intelligence considering human dignity and social responsibility. In fall 2026, he contributes an invited essay to the anthology Imperfect Ideal: Essays on Liberal Democracy in the Real World, edited by Peter L. Biro and published by Dundurn Press, where he reflects on liberal democracy and governance in an era of emerging technologies.
