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.

More Shockers from Société Générale: Why Didn’t Zay Just Leave Zee Keys to Zee Vault on Zee Cafeteria Table?

The special board committee which is investigating the $7 billion trading fraud at Société Générale issued its interim report today. What stands out is the conclusion found at point 9 of the English summary.

9. The author of the fraud began taking these unauthorised directional positions, in 2005 and 2006 for small amounts, and from March 2007 for large amounts. These positions were uncovered between January 18th and 20th 2008. The total loss resulting from these fraudulent positions has been identified and amounts to 4.9 billion euros, after their unwinding between January 21st and 23rd 2008.

What the board is admitting is that a lone trader, and a fairly junior one at that, was able to hoodwink the entire internal control and security apparatus of one of the largest and most respected banks in Europe from 2005 until January of 2008. Do they really think these findings will arrest the fears of the investing public and restore faith in the bank? Far from getting management and the board off the hook, the report serves as a stinging self-indictment of a financial institution that was so inept in its security it might as well have left the keys to the vault on the cafeteria table.

But there is more.

10. The General Inspection department believes that, on the whole, the controls provided by the support and control functions were carried out in accordance with the procedures, but did not make it possible to identify the fraud before January 18th 2008.

Controls were carried out in accordance with zee procedures? Allo? Eez anybody hat zee home? Surely Inspector Clouseau had some part in this investigation. The controls worked –except for the fact that $7 billion was lost. Does somebody fall down the stairs next or have their false nose go up in flames? This is a Blake Edwards production if ever there was one.

Nice to have you back, Monsieur. We look forward to zee next hact.

Outrage of the Week: The Failure of Financial Guardians to Protect the World from Mr. Average

outrage 12.jpgTrying to turn Jérôme Kerviel into the Lee Harvey Oswald of the banking world won’t fly. There is much more to be suspicious about when it comes to the role of his superiors at Société Générale and the governance failings of global financial institutions.

The disclosure that a lone trader’s unauthorized transactions had caused Société Générale to lose more than $7 billion prompted us to respond with a loud “Incroyable!” But when it was said that the bank’s efforts to minimize its losses may have led to the market meltdown that saw $1 trillion obliterated from stock markets worldwide, one could only think “C’est impossible.”

But of course, both situations were eminently plausible. (more…)