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.

Boardroom of Felons

We have received a number of emails from readers who were shocked at the revelation, first brought to light on these pages, that, between them, the boards of Livent and Hollinger had seven directors who became convicted felons.  Here’s another gem:  three of them were trained as lawyers.  The number of felon directors on these boards sets a record for modern publicly traded corporations.  For those interested, here’s how the total was calculated:


A. Alfred Taubman, Director (convicted of price fixing, 2001)

Conrad M. Black, Director (convicted of mail fraud, etc., 2007)

Garth H. Drabinsky, Director (convicted of fraud, etc., 2009)

Myron I. Gottlieb, Director (convicted of fraud, etc., 2009)


A. Alfred Taubman, Director (convicted of price fixing, 2001)

Conrad M. Black, Director (convicted of mail fraud, etc., 2007)

F. David Radler, Director (convicted of mail fraud, 2007)

Peter Y. Atkinson, Director (convicted of mail fraud, 2007)

John A. Boultbee, Director (convicted of mail fraud, 2007)


Black, Drabinsky and Atkinson were trained as lawyers.

Gottlieb and Boultbee were trained as professional accountants.

Both Black and Drabinsky, during the time of the crimes for which they have been convicted, were members in good standing of the Order of Canada, the country’s highest civilian honor.  They remain so today. There is no indication if or when they will be stripped of that prized decoration, which, as we have long maintained, is a sad commentary on the distinction, on the men and women or who hold it and, especially, on those who are entrusted with maintaining the integrity of the award.

Conrad Black’s Losses Mount; Chances of a Presidential Pardon Do Not

Former newspaper baron Conrad M. Black’s losing streak continues unarrested.

He lost control of his Hollinger companies and all his prized newspaper holdings. He lost what was left of the Argus group he essentially inherited.  He lost his criminal case, which was brought by the United States Department of Justice, and his appeal of the conviction taken to the 7th U.S. Circuit. He then lost in his appeal of that failed appeal. (more…)

The Less than August Summer of Conrad Black

The Hollinger newspaper empire he once ruled sputters to an ignominious end; the appeal he boasted waxed the floor with the prosecution results in unanimous defeat.  Even his prison garb pant legs defy the once exacting baronial standards of symmetry and perfection.

August has not been good for Conrad Black, who is spending his first of many summers as inmate No 18330-424 at the Coleman Corrections Facility in Florida.  Whatever else a life of curtailed freedom has done to him, a once legendary obsession with the requisite symmetry of pant legs, ably assisted by the fabled tailors of Savile Row, seems to have been among the earliest casualties of Mr. Black’s institutional experience.

As we noted first on these pages some months ago,  he is the only member of the British House of Lords to have been convicted of corporate fraud since Lord Kylsant of Carmarthen in 1931.  Lord Black’s business empire has also followed the path littered by Baron Kylsant.  Shares of Hollinger Inc., the holding company he controlled, have been delisted from the TSX for failure to file financial statements.  They would only confirm what everyone already knows: Hollinger is finished.  Its connection with its last meaningful asset, the Chicago Sun-Times, has been ended as a result of a litigation settlement.  It now has no business other than suing and being sued.

Mr. Black inherited the now disgraced Hollinger name from the Argus Corporation, an empire he pretty much inherited, too, with a little cunning assistance in the process.  It was once a hugely profitable force in Canadian business.  Now it is all but ashes.  The great assets it controlled, from Massey Ferguson and Standard Radio to Crown Trust and Dominion Stores, were long ago dismembered and sold off by Mr. Black.  Trading in even its slim float of stock is about to be terminated.  Shares will be delisted from the TSX later this month because of a failure to file financial statements.  The Sun-Times Media Group, formerly known as Hollinger International and once the thriving centre of Mr. Black’s newspaper chain replete with celebrity directors like Henry Kissinger, struggles each day under a towering mountain of debt and losses.

Here, the fate of Mr. Black and the companies he headed reprise with eerie accuracy a script written decades ago.  Like the Titanic of the White Star Line he controlled, Lord Kylsant’s Royal Mail Steam Packet Company soon disappeared after his incarceration.  Lord Black’s empire likewise vanished into an ocean of overweening ego, unmanageable debt and boardroom fraud. And like Lord Kylsant, Lord Black also lost out on his appeal of a jury conviction for fraud.  His request for a review of that decision was rejected last week by the 7th U.S. Circuit Court of Appeals, leaving an appeal to the U.S. Supreme Court his only, and decidedly unlikely, course for hope.

One important difference between the fate of the Royal Mail shipping empire and Hollinger, however, is that in the former case, Lord Kylsant was found to have acted as a lone wolf in the fraud.  At Hollinger, the thieves came in a pack.  Today, one of the most underreported records in the annals of contemporary business is that there are more Hollinger directors currently serving time in U.S. federal prisons than there have been of any other publicly traded company in modern corporate history.  In addition to Mr. Black, David Radler, once his top lieutenant, Peter Atkinson and Jack Boultbee are now inmates at various locations of the U.S. Bureau of Prisons.  Mark Kipnis, a Hollinger lawyer who was also convicted of fraud, was permitted to serve his time under house arrest.

One might add to this list of miscreants the name of Alfred Taubman, the shopping center king and Hollinger director who was convicted of price-fixing in the fine art business.   Just as Mr. Black’s friends at the Toronto-based National Post and New York Sun remain unbothered by the idea of a convicted felon serving time writing op-ed columns in their newspapers, Mr. Black and his fellow directors saw no ethical conflict or optical distortion in Mr. Taubman’s continuing to serve on the Hollinger board from the confines of his prison cell.

This should have been seen at the time by the media and Hollinger investors, as it was by us, as a huge red flag in the governance and ethical culture of the company.  The same might be said for the archaic, management-dominated structure of the board of directors at Hollinger. Those who display such open contempt for shareholders and sound governance may also manifest their disdain and flawed judgment in less visible but equally costly actions.  As they did in spades at Hollinger.  As noted before on these pages, when we tried -in the 1990s- to raise the role Lord Black’s dubious governance practices played in Hollinger’s byzantine constitution -including the strange and ill-defined part by Ravelston, the private holding company he also dominated- Canada’s major business newspapers showed not the slightest interest.

There are those who ask how such noble and respected corporate entities as Hollinger and Argus could end up as little more than scattered bones in a bleak and litigious landscape of failure. To that the response must be that when a boardroom is stocked with enough felons to fill a minivan, it is unlikely that any other outcome would have been possible.

With such a legacy, in addition to his present status as a serving felon, we are again prompted to wonder why Mr. Black continues to hold national honors from the country whose citizenship he renounced several years ago.  Much has been made in some quarters of the fact that he is still a member of the esteemed Order of Canada.  Less has been noted of his position as a member of the Queen’s Privy Council of Canada, a post generally reserved for past and current members of the federal cabinet.  An exception was made for Conrad Black to be elevated to the position, under former prime minister Brian Mulroney.  How does it reflect upon the image of Canada in anything but a discreditable light, that such honors can still be enjoyed by a convicted felon.  On this point, if nothing else, Lord Black of Crossharbour parts company with Lord Kylsant of Carmarthen.  Shortly after he lost his appeal and was sent packing to Wormwood Scrubs prison, Lord Kylsant was stripped of his most important honors and titles, except for his membership in the House of Lords, which would have taken an act of Parliament to remove.  It was a small saving grace.  He never returned to that storied institution.

It is perhaps a sign of a different era we live in when a man can steal from his shareholders and be convicted of obstruction of justice while still having his opinions published in widely read newspapers and the string of awards and honors that follows his name remain undisturbed.

Men of money and social status whose favors are always sought out are typically the recipients of awards and impressive rank.  It is the way of the wealthy and well connected to help one another in their moves ever upwards.  Conrad Black has enjoyed considerable assistance in this regard over the years and has accumulated an impressive array of letters after his name.  But for this once most favored son of the Canadian establishment to whom so much was offered, the title that defines him most in the eyes of the law and of society is that of convicted felon.  For that, Mr. Black owes nothing to his friends or family or the insiders he so carefully cultivated over the course of a lifetime.  He earned it entirely himself.

As for his self-serving columns and email messages declaring that regulators and the judiciary in the U.S. have much to answer for in the destruction of shareholder value at Hollinger and characterizing American law as being “a venomous roach, enforced by rattlesnakes and adjudicated by hyenas,” I suspect Conrad Black himself will discover that prison is not intended to be a bastion of self-indulgence and verbal attack and that authorities will soon tire of his scathing denunciations of the “tedious persecution” that he claim has afflicted his life. He writes that he looks to Gandhi and Sir Thomas More for inspiration and likens his plight to those of these icons of moral courage.  A more apt comparison would be to Charles Ponzi, Bernie Cornfield, Robert Vesco and those of similar symbols of moral bankruptcy.

At every stage along with way since his legal travails began, he has miscalculated, misspoken and misapprehended the force of the reality that was marshalling against him.  Jurors who go to the trouble of serving the public interest at not inconsiderable personal sacrifice ought to be spared the behind-bars public tirades of prisoners who continue to berate the judicial system and dismiss their verdicts as “nonsense.”  It is time the penal system began to treat Conrad Black as the common prisoner he is and not the celebrity guest he prefers to portray.

Conrad Black: Lord of What Might Have Been

How strange it is that success can be such an impostor and only a warm-up for the main act of self-inflicted tragedy yet to arrive.

When Lord Kylsant of Carmarthen lost all hope of appeal in 1931, the wealthy titan was taken off and spent the next year in London’s bleak Wormwood Scrubs prison. Until Conrad Black, he was the only member of the British House of Lords ever to be convicted of fraud in the management of a publicly traded company. While prison was a stunning downturn for this Napoleon of the seas, as he was called for the formidable shipping empire he created, he had a private cell and was permitted to have his meals brought in from a first-class caterer.

Conrad Black, the first British peer to be incarcerated in the history of the United States, will not be so fortunate. There will be no privacy in his lodgings at the federal correctional complex at Coleman, Florida, and his meals are unlikely to be catered by his favorite Palm Beach restaurants.

He will doubtless persist in proclaiming his innocence on all charges and maintain that full acquittal on appeal is a virtual certainty. In reality, the man who often sounds like some character out of Charles Dickens, and not one of his more sympathetic protagonists at that, stands a greater chance of stringing all his prodigious and weighty words together and scaling down from his prison window past the unsuspecting eyes of his less than erudite guards.

There would have been many steps that could have been taken along the way to avoid the hard thud of the prison gates that swung closed behind him today and will remain so for most of the next 78 months. Much less brilliant men might have taken those other paths. One of the many mysteries that masks Conrad Black is why he did not.

He has spent considerable time over the past few years describing his role as a “freedom fighter” and threatening to take on the cause of prosecutorial overreaching. His friends claim that becoming an anti-corporate governance zealot remains a distinct possibility for this man of many talents. Whether anything will come from his newfound role as the Rubin “Hurricane” Carter of wrongly convicted corporate felons is yet to be seen. A predicate for such interest in the abuses of the criminal justice system or the plight of the less fortunate has never figured prominently in Conrad Black’s writings or those of the high profile friends that now rail at his injustice, for that matter. And it is a hard case to make that a man who has been able to spend tens of millions mounting the best legal defense possible -tens of millions of other people’s money via the shareholders of the former Hollinger International- was disadvantaged or the victim of abuse by the legal process.

A case can be made, however, that there was a greater transgression at work here than the one for which Conrad Black was convicted. For many years, hundreds of millions in fees and payments were siphoned from Hollinger and paid to Ravelston, the private holding company run by Black and Radler, which itself turned out to be a corporate felon. The outrage is that those payments were fully approved by Hollinger’s board without batting an eye. Yet most directors, according to company documents, didn’t understand why the payments were being made or even the purpose of Ravelston. Corporate governance at Hollinger was little more than a social club where directors partied and ate fine lunches and in the end seemed to have little energy left to do anything more than lift their Conrad Black-supplied rubber stamp with the word YES emblazoned on it in baronial font.

There were also the injustices of the $20 million bill that the internal investigation of Hollinger chalked up under Richard Breeden, and the subsequent corporate welfare program that the Hollinger group became for lawyers, management and directors who always had their hands outstretched for another check while in effect presiding over the disintegration of the company. The fact that no laws were broken by these actors in no way lessons the outrage their actions represent.

The greatest “crime”, however, is reserved for the man at the top. In that category, one looks not at a breach of securities laws or federal codes but at the larger offense of a person who squandered the rare opportunity to influence the course of events and make the world a better place for it. Law breaking by men and women whose lives were stacked against them from the start, while never excusable, is perhaps easier to understand. When all you have known is crime and criminal influences from an early age, the ability to find a better path is strewn with obstacles. But when there is the gift of affluence and privilege from birth and great wealth, fame and power amassed along the way, as there was for Lord Black of Crossharbour, the road taken to crime offends the senses of civilized men and women to the core.

So disconnected from the facts that led him to this latest step in a progressive march downward, Mr. Black writes in today’s National Post:

We have a Toronto court to thank for the massive and misleading exposure that the grainy security film that caused me to appear furtive, has caused. We have the same court to thank for a number of other unjust decisions.

So now it is the “graininess” of the security film that caught him removing the boxes from his Toronto Street office that is the culprit, along with a string of other players from investors to prosecutors. It is they who are responsible for his fate. Not him. Never him.

I am well aware of the capacity of courts, agencies and commissions to act incorrectly when it comes to the rights of individuals. Often it is out of a lack of competence. Sometimes it is the result of malice. I have strongly condemned such conduct in the past. I wish we had heard from Mr. Black and his newspapers on this subject in the past. It might have helped to avoid a number of lives being ruined. But as I have noted above, injustice rarely befalls those with vast resources to pursue their rights in the avenues of both the legal system and the court of public opinion. And if I believed for one moment that Mr. Black had been disadvantaged by a significant manifestation of bias in the legal system, I would be the first to come to his defense. To whom among the unjustly treated, other than himself, has Mr. Black ever come to the defense?

One also is prompted to wonder, if Mr. Black has so many important facts to marshal in his defense, which are voluminously detailed in his column today (and how many other convicted felons do the publishers and editors of the National Post permit to make their appeal case in an Op-Ed column?) why on earth did he refuse to take the stand at his trial?

His Palm Beach mansion has more bathrooms than the accommodation he must now share with in excess of 180 fellow inmates. His address, which from birth included the more prestigious names in Toronto, New York, Palm Beach and London, will now be among the most infamous: the U.S. federal prison complex at Coleman. How ironic it is that the man who boasted that the prosecution’s case was “hanging like a toilet seat around their necks” may well end up cleaning such fixtures as part of his life as Coleman’s newest inmate. His newly acquired dog will have more freedom and live a life of greater splendor than will Mr. Black for the next several years. A man who has known the rarest of luxuries on the grandest scale will soon discover that the simple act of opening a refrigerator door for a glass of milk or taking a stroll down the street on a warm summer evening are things to be envied in the lives of the most common of individuals.

It is not just the contrast from a world of mansions, limousines and privileged society to one of bars, starchy food and shared showers that is difficult to grasp here; it is the reality of what might have been that will not now be; the unfulfilled accomplishments and potential successes of a man of uncommon ability, but regrettably of rather common criminal persuasion. Gone is the Argus empire he effectively inherited. Little remains of the newspaper domain he once ruled. Discarded in a foolish fit of pique is the Canadian citizenship he exchanged for a title and an ermine-fringed robe from another land. However responsible Mr. Black is for his fate, one cannot but ponder how strange it is that success can be such an impostor and only a warm-up for the main act of self-inflicted tragedy yet to arrive.

Mr. Black once boasted in a BBC interview that if he had to go to prison, he would wear the sentence like “a badge of honor.” There was no award ceremony evident as he arrived at the Coleman prison facility at noon today in a Cadillac with darkened windows. My father used to counsel that one of the tests of a bright person was the ability to make a sensible point without sounding like an idiot. Mr. Black is a bright man. On too many occasions over the past number of years in the things he has written and said (the “renunciation of the rights of the French nobility;” comparing federal prosecutors to “Nazis,” etc.), Mr. Black has sounded a few points lower than his IQ has been rated.

The tribulations that lie ahead for him will be significant, and the distress imposed on his family and friends is truly unfortunate. But the fact remains that in too many ways when Mr. Black has been the focus of hope and great expectations, he has disappointed and left those who have looked up to him feeling empty.

Conrad Black has enjoyed many honors in his life, some of which have been attached to his name. What he might have done with them and what his legacy might otherwise have been, will be a mystery forever lost in the mists of history unwritten. Overshadowing all of this is the fact that Conrad M. Black, Baron Black of Crossharbour, PC, OC, KCSG, who once reigned over an empire that saw the doors of kings, presidents and world luminaries open wide to him, is inmate number 18330-424, lord now only of his own bunk bed.

If there could be a less predicted or more bewildering turn in the life of a man, imagination fails to conjure up what that might be.

As of 8 pm EST, the Bureau of Prisons information posting regarding its custody of Conrad Black (below) had not been updated.

The Baron of Baggage

Of all the indignities Conrad Black has had to endure, much of them admittedly at his own hands, none has been more symbolic than to go from being lauded as a British baron to being dismissed as a piece of “baggage” by the company he once headed.

In our view, it has always been something of a race to see what would happen first: Mr. Black moving into his prison lodgings or the Sun-Times Media Group, successor to Hollinger International and owner of the Chicago Sun-Times, throwing in the towel.

Tired of trying to hold on by its fingernails (having paid out more than $100 million in legal costs, much of it connected with the criminal defence of Conrad Black et al, has not helped), Sun-Times Media has decided to put all its assets on the block. It appears that changing the name from Hollinger International to Sun-Times Media did not have the hoped for result. The Chicago Sun-Times reports that the overarching concern is a transaction that would free the company from the “baggage” of convicted former owner Conrad Black. The lord of luggage? Mr. Black once paraphrased Mme. Cornuel, who proclaimed “no man is ever a hero to his valet.” How much sharper the sting when he not only has to carry his own valise into prison, but has become it in the eyes of former employees.

We have expressed some doubt about the management abilities of Mr. Black’s successors at the Hollinger companies, whatever they might be called. They have made some colossally bad decisions, not the least of which was to be a bottomless ATM for Mr. Black and his cronies in dealing with their legal problems. The company itself also continues to face substantial litigation costs, as both a plaintiff and a defendant. No new owner will want to inherit that mess.

The board of Sun-Times Media has appointed Gordon Paris and Graham Savage, among other directors, to oversee the sale. We doubt that including members of the old guard, who have presided over Hollinger’s post-Black disintegration and are carrying more than a few suitcases themselves in the eyes of shareholders will help. But the move is about par for a company that has been very good at compensating its insiders while its investors have continued to see the value of their stock drift further downward toward oblivion. The stock, which in 2004 was trading around $20, currently trades at $1.47, well off its 52-week high of $6.94.

The Ides of March Beckons Conrad Black

Conrad Black’s freedom can now be measured in days -31 to be precise- as a result of U.S. federal court judge Amy St. Eve’s decision to deny the request of Mr. Black and his co-defendants to remain free while their appeals are considered. The judge found that no substantial questions existed which were likely to result in an acquittal or a new trial. Her ruling also noted that the defendants “knowingly and intentionally misused International for their very significant private gain,” and ordered them to report to prison on March 3rd.

Mr. Black’s trial was long and complex, and has culminated in a Shakespearean fall from the heights of privilege, reputation and wealth that is almost too dramatic to comprehend. As we have written before, there are indications from his own statements that Mr. Black still has not grasped the depth of the descent himself. (more…)