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.

The law has spoken forcefully about Skilling’s freedomless future; about Enron’s feckless board, the ethical verdict is still awaited.

Having received a prison sentence of nearly 25 years, the law has finally taken its course for Jeffrey Skilling. However much I have detested the arrogance and deception which he was found to have inflicted upon shareholders, employees and all those who placed their confidence in a company that was once trumpeted among America’s best, it is a joyless spectacle. The closing chapter in this tragic play will, absent a successful appeal, likely see him spend the rest of his life incarcerated.

As Skilling prepares to surrender his freedom, my thoughts turn to those from whom the criminal law appears incapable of extracting any meaningful sentence: the directors who hired and were supposed to monitor Skilling and the rest of Enron’s top management –the same directors who insisted they were unaware of wrong-doing and were diligent in their duties. About those directors, Enron’s own internal investigation concluded:

With respect to the issues that are the subject of this investigation, the Board of Directors failed, in our judgment, in its oversight duties. This had serious consequences for Enron, its employees, and its shareholders.

The Board, and in particular the Audit and Compliance Committee, has the duty of ultimate oversight over the Company’s financial reporting. While the primary responsibility for the financial reporting abuses discussed in the Report lies with Management, the participating members of this Committee believe those abuses could and should have been prevented or detected at an earlier time had the Board been more aggressive and vigilant.

But the most telling indictment of failure on the part of Enron’s board came in the form of a report by the U.S. Senate Permanent Subcommittee on Investigations, which, after months of hearings and investigation, concluded:

…much of what was wrong at Enron was not concealed from its Board of Directors. High risk accounting practices, extensive undisclosed off-the-books transactions, inappropriate conflict of interest transactions, and excessive compensation plans were known to and authorized by the Board. The Subcommittee investigation did not substantiate the claims that the Enron Board members challenged management and asked tough questions. Instead, the investigation found a Board that routinely relied on Enron management and Andersen representations with little or no effort to verify the information provided, that readily approved new business ventures and complex transactions, and that exercised weak oversight of company operations. The investigation also identified a number of financial ties between Board members and Enron which, collectively, raise questions about Board member independence and willingness to challenge management.

The failure of any Enron Board member to accept any degree of personal responsibility for Enron’s collapse is a telling indicator of the Board’s failure to recognize its fiduciary obligations to set the company’s overall strategic direction, oversee management, and ensure responsible financial reporting.

Yet the freedom of those directors today, unlike that of the CEO they were charged with supervising, is not in peril. Many have gone on to serve on other boards. They are considered members in good standing of the cozy club. The criminal justice system apparently has no claims upon those who protested before an incredulous Congress that they saw and heard no evil and did not know what was really going on. It is a scene that has been played out many times before in the great boardroom scandals of the past century among directors who failed to ask the right questions and who, though appointed by shareholders to be the vigilant guardians of their interests, were little more than shut-eyed sentries under the spell of management.

I have often wondered how otherwise self-respecting and sophisticated members of the business community could allow themselves to be placed in a position were they regularly wind up claiming to be innocent dupes. Time and again when that happens we find there has been a failure to ask the right questions and to devote sufficient attention to understanding the company they were supposed to be governing. Yet there appears no shortage of such individuals and they are readily recycled in boardroom after boardroom.

For the final atonement of Enron’s directors, we must await the verdict not of the law, but of ethics. The true cost for these actors may not come in time imprisoned but in the moral opprobrium of history. In the end, these sometimes more elusive forces may prove to be a much tougher judge of those who could have prevented the Enron catastrophe but instead sat in comforted slumber as management cast its web of intrigue and deception ever tighter around them.