There is no substitute for a culture of integrity in organizations. Compliance alone with the law is not enough. History shows that those who make a practice of skating close to the edge always wind up going over the line. A higher bar of ethics performance is necessary. That bar needs to be set and monitored in the boardroom.  ~J. Richard Finlay writing in The Globe and Mail.

Sound governance is not some abstract ideal or utopian pipe dream. Nor does it occur by accident or through sudden outbreaks of altruism. It happens when leaders lead with integrity, when directors actually direct and when stakeholders demand the highest level of ethics and accountability.  ~ J. Richard Finlay in testimony before the Standing Committee on Banking, Commerce and the Economy, Senate of Canada.

The Finlay Centre for Corporate & Public Governance is the longest continuously cited voice on modern governance standards. Our work over the course of four decades helped to build the new paradigm of ethics and accountability by which many corporations and public institutions are judged today.

The Finlay Centre was founded by J. Richard Finlay, one of the world’s most prescient voices for sound boardroom practices, sanity in CEO pay and the ethical responsibilities of trusted leaders. He coined the term stakeholder capitalism in the 1980s.

We pioneered the attributes of environmental responsibility, social purposefulness and successful governance decades before the arrival of ESG. Today we are trying to rebuild the trust that many dubious ESG practices have shattered. 


We were the first to predict seismic boardroom flashpoints and downfalls and played key roles in regulatory milestones and reforms.

We’re working to advance the agenda of the new boardroom and public institution of today: diversity at the table; ethics that shine through a culture of integrity; the next chapter in stakeholder capitalism; and leadership that stands as an unrelenting champion for all stakeholders.

Our landmark work in creating what we called a culture of integrity and the ethical practices of trusted organizations has been praised, recognized and replicated around the world.


Our rich institutional memory, combined with a record of innovative thinking for tomorrow’s challenges, provide umatached resources to corporate and public sector players.

Trust is the asset that is unseen until it is shattered.  When crisis hits, we know a thing or two about how to rebuild trust— especially in turbulent times.

We’re still one of the world’s most recognized voices on CEO pay and the role of boards as compensation credibility gatekeepers. Somebody has to be.

Ousted NYSE head Richard Grasso ordered to repay millions in improper pay; directors chastised by judge for being asleep in the boardroom

Indeed, many members of the (NYSE) board testified that they did not know about the SERP and if they did, they did not know what the balance was.

This court also finds this affirmative defense of neglect to be shocking. That a fiduciary of any institution, profit or not-for-profit, could honestly admit that he was unaware of a liability of over $100 million, or even over $36 million, is a clear violation of the duty of care. The fact that it was a liability to an insider (chairman and CEO) is even more shocking and a clear violation of the duty of loyalty.

–New York State Supreme Court Justice Charles Ramos in a decision ordering former NYSE CEO Richard Grasso to return millions of dollars in contested compensation.

Finally, the “slumber defense”, so often employed by directors who claim they really didn’t know what was happening, is beginning to offend the courts as much as it ought to offend shareholders.

Ironically, I covered this very point in a letter to the NYSE board a year before the Grasso scandal erupted.

The spectacle of Enron’s board pleading ignorance to the advancing dangers that brought down the company is a scene that has been played out repeatedly in the great corporate disasters of the past century.

I then went on to deal with the subject that would eventually lead to Grasso’s undoing, and the board’s embarrassment –oversized pay awarded in a climate of boardroom permissiveness and complacency.

Excessive CEO pay has been an indicator of the manifest deficit in ethics and values that has overshadowed too much of the business world. In the 1970s, the average CEO made about 43 times what the average worker made. In 2001, that gap had widened to 500 times. This phenomenon, representing the largest transfer of wealth from owners to a small class of hired professionals in history, interestingly coincides with the greatest decline in respect for business and its leaders, the largest loss of shareholder wealth and the longest parade of disgraced CEOs since the Great Depression. It symbolizes more than a dysfunctional system of compensation. It stands as an emblem of the failure of directors to live up to their ethical and legal responsibilities and tarnishes the moral authority of capitalism.

The judge has given directors and CEOs across America and elsewhere plenty to think about.