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 Pope Who Found His Voice in America

Benedict XVI came out from behind the long, and for many, saintly shadow of John Paul II this week when he arrived in the United States. His visit instilled a sense of curiosity in millions and a deep outpouring of respect from his American flock. He gave the most contrite apology yet for the terrible sins of wayward clergy in the sexual abuse scandal that has been so costly to the reputation of the Roman Catholic Church and to the lives of those directly affected. It was the act of one who understands that being a leader often means dealing with uncomfortable issues and bringing healing to where it is needed.

His homilies and speeches on human rights, respect for the individual and the challenge of global warming transcend any single religion or nation. They are the common cause of decent men and women everywhere. Yet no other leader can speak with such a direct connection to so many people around the world. He is, in that respect, a universal leader. There are not many of those today.

The celebration of his arrival on the south lawn of the White House this week, with the incomparable soprano, Kathleen Battle, whose voice, accompanied by a golden harp, would move angels to tears, was a uniquely touching spectacle. And for all the criticism President George W. Bush has received for the mistakes and folly of his administration, though much of it is deserved, he was as gracious and considerate as one could ever expect from an American head of state.

Benedict’s attendance at New York’s Park East Synagogue on the start of the Jewish Sabbath before Passover shows this Pope, like his predecessor, to be a figure that respects other faiths and counsels tolerance for all. Many Muslims have also expressed admiration for the message the Pope has brought. These are encouraging steps in the journey toward hope and understanding on a road that is often shaken by violence and hatred.

It is a reminder that, even in a time when billionaire hedge fund managers and search engine kings command so much adulation and wars and economic disparity cause so much division in society, we all have a need to look up to someone who embodies a sense of moral authority and epitomizes the teachings of timeless virtues, such as faith, charity, forgiveness, care for the lesser among us and, especially, peace on earth.

History may well view Pope Benedict XVI’s visit this week as a turning point. John Paul II fills a special place in the Church and in the hearts of millions, some of whom did not even share his religion. But he would be the first to say that each Pope must serve in his time and find his own voice to do so. Benedict found his voice in America.

It is one that should be happily received around the world.

Kudos to Uno and the Arrival of Simplicity’s New Premium

In a world of subprime-created mansions and similarly oversized egos that can soar into the clouds, perhaps Madison Square Garden’s newest champ is a sign that there is still some virtue in keeping two (or four) feet planted firmly on the ground.

While it was a week of mostly discouraging news and distressing economic setbacks, a happy surprise arrived in the form of a 15-inch beagle named Uno. He won top honors at the famed Westminster Kennel Club dog show at Madison Square Garden on Tuesday.

My grandfather, whose 114th birthday would have been tomorrow, bred, raised and showed beagles for many years as a hobby. I still have his prized collection of Hounds and Hunting magazines going back to the 1930s. We had several beagles when I was growing up. They never seemed to stay around for very long and usually ran away. One was hit by a car. That was my first childhood experience with mortality. In adult life, I moved toward Irish setters and have owned four. You might say they are a little more high maintenance than beagles. Looking back, I think the challenges of their training made my grandfather’s choice seem like model students.

Try as much as he and other breeders did, and travel to as many shows as they did, beagles never seemed to make it into the big leagues. What you saw was what you got; you could not turn a beagle into a topiary with a few clips here and there. No fancy blow-drying could make a beagle’s fur fly with the wind. They were pretty much a down-to-earth breed and for that reason have never been the choice in the sophisticated world of the ever-seeking-to-impress yuppie.

But perhaps when an underdog like Uno can break the barrier, it is a signal that change is in the wind. It is an event that Barack Obama will doubtless view as a propitious augury for his campaign. It is tempting to speculate that his big win (Uno’s, not Obama’s) shows that after the meltdown from overly complex financial instruments that didn’t really pan out, when not even the geniuses who created them now seem to have understood them, the stock of the open, the transparent and the unpretentious is on the rise. In a world of subprime created mansions and similarly oversized egos that can soar into the clouds, perhaps Uno is a sign that there is still some virtue in keeping two (or four) feet planted firmly on the ground. Maybe Uno is the new herald for the return to common sense and principles like value, integrity and sound judgment, which seem to have been in short supply in boardrooms and legislative chambers in recent years. Perhaps, as the high cost of misapprehended risk has become so evident in recent months, there is a rising premium to be placed on what I like to call de-complexity. Even the name of this young hound is the very model of modern simplicity.

On the other hand, maybe Uno would feel uncomfortable being a poster dog for some cultural inflection point, just as my beagles seemed a little overly sensitive when my young cousins and I would dress them up in old pajamas during family occasions. Sometimes a dog is just a dog. And in a world that has grown terribly muddled by certain human efforts in the global financial market and elsewhere, that is the most reassuring reminder of all.

That’s a thought my late grandfather never forgot, and so the beagle’s breakthrough this week at the Westminster show is something of a birthday present for someone who never gave up on them, or on other virtues like hard work, humility and honesty for that matter.

Well done, Uno.

Kudo of the Week: The Courage to Turn the Course in the Middle East

It would be hard for even the most Panlgossian among us not to be a little skeptical about the prospects of long-term stability and peace between Israel and the Palestinian factions. But this week’s extraordinary gathering of Middle East powers in Annapolis gave a glimmer of hope. What was most impressive about it was the relationship of mutual respect that seems to have developed between Israeli Prime Minister Ehud Olmert and Palestinian Authority President Mahmoud Abbas. The two leaders have been meeting secretly, behind the scenes for a while now. You can tell they have a genuine rapport. Both tread on dangerous ground, and the prospect of alienating their own constituencies is real. Courtesy Begin-Sadat Centre for Stragegic StudiesThere is always risk in turning away from conventional wisdom and charting a new direction. In that they follow in the courageous footsteps of Menachem Begin and Anwar Sadat, who also took a giant leap over past battles to make a better future. That, too, culminated in an historic gathering in the United States, at Camp David in 1978. America, at its best, has been a shining force for peace in the world. It will be again.

President George W. Bush and Secretary of State Condoleezza Rice also served in a noble tradition as peacemakers as only real leaders can. They deserve the praise they are receiving from many political and geographic quarters.

There is much to be encouraged about by those who gathered at Annapolis from distant and diverse lands and much to be hopeful about when men and women face each other with weapons of understanding, good will and a desire to make peace.

Kudo of the Week: SEC Trumps OSC Over Nortel Penalty

Once again, the SEC has done the heavy lifting for Canadian investors by imposing, according to reports, a $100 million penalty on Nortel. Indeed, nothing could more graphically illustrate the contrast in approach toward the protection of the capital markets between the SEC and the OSC than this decision. For exactly the same kind of improprieties, the OSC thought just $1 million toward the costs of its investigation would be sufficient. Like us, the SEC was clearly not impressed with the OSC’s thinking and wanted to levy a penalty commensurate with the offense. We said at the time that the OSC hit Nortel with a wet noodle. The SEC’s action looks more like it threw the whole pot of pasta at them.

Nortel should move more aggressively to recoup these costs from the officers and directors on whose watch the wrongdoing occurred. But as long as the concept of limited liability exits, and companies have the right to sue and be sued as though they were legal persons, they will have to deal with fines and penalties. That’s why who is chosen to sit around the directors’ table and in the executive suite is important and needs to command more attention from shareholders than it often does —even when times seem so good, as they once did at Nortel.

Maybe Canadian investors should think about the added value they are getting with the SEC, which once again has acted true to its motto, “the investors’ advocate.” I’m open to suggestions as to what the OSC’s motto should be. They pay the OSC’s top level officials hundreds of thousands more than their SEC counterparts make. There are approximately 90 employees at the OSC who make as much or more than the head of the SEC. Yet time and again, it is the SEC who fills the void and makes the tough call when Canadian regulators fall short. Sort of makes you wonder what they have in mind for RIM next.

By the way, with this posting we have inaugurated a new category at Finlay ON Governance. Our Outrage of the Week has been published with regularity for a number of months each Friday and has become a popular feature. We think, however, that in the interests of encouraging a positive and balanced perspective, in those weeks where there has been a major breakthrough or step which we feel enhances the interests of transparency, accountability and sound governance, we will run that story. Outrage or Kudos? We don’t know which you will see more of on Fridays as time goes by, but it should be interesting.