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.

Snapping Back to Reality

Moody’s has indicated that it might lower the ratings of monolines MBIA and Ambac. The possibility prompted New York Times columnist and blogger Floyd Norris to ask:

Has anyone thought in recent months that either of those insurers deserved its AAA rating?

Readers here will know we have harbored no such illusions. Last February, we expressed skepticism when Standard and Poor’s and Moody’s returned the monolines to AAA status. We said at that time,

Something is being stretched here -and it’s not just credibility.

Evidently, reality will play the elastic band only so far before it snaps back in the face. Conventional wisdom and billions in losses and write-downs notwithstanding, neither the real economy nor Wall Street is out of the dark and scary woods yet. You will soon see more than just the rating agencies change course and take cover once again.

Memo to MBIA: Don’t Stop at the Rating Agencies. Why Not Choose Your Investors, Too?

MBIA, the monoline insurer, announced last week that it no longer wanted to be rated by Fitch Ratings, the only holdout on its AAA status. The move has opened up quite a Pandora’s box, especially for people who have been skeptical of the AAA ratings MBIA received from Standard and Poor’s and Moody’s. We have been among them. But perhaps some creativity is called for in this time of credit turbulence.

When the sea is churning and the waves are heaving the ship, naturally it helps to call for a change in the weatherman. But why stop with Fitch? Reporters are a bit of a pain to MBIA right now. Why not just tell the troublemakers you don’t want them to write about you any longer. Same with columnists, commentators and bloggers. Especially bloggers. Also, certain investors have had way too much to say about the company. Tell them you don’t want them to own your stock. There’s also the SEC, which has an annoying habit of asking a lot of pesky questions. Fire them too. People will begin to get the message about MBIA.

Actually, we think they already have.

Rating the Monolines: When ‘AAA’ Stretches Too Thin

Standard and Poor’s, the giant credit rating agency, affirmed the top “AAA” ratings of bond insurers Ambac and MBIA yesterday. What seems odd about this is that it’s as if the past six months, which saw the most seismic disruptions in the credit markets in generations, wiped out tens of billions from corporate balance sheets and set central bankers and government officials into a tizzy, never happened. S&P sees these major bond insurers as no worse than they were a year or two ago, if you believe the ratings. Granted, they have received some infusion of capital, but the amounts are far below potential payout liabilities if things get worse. Both S&P and Moody’s were a little slow to pick up on the sea change that was occurring in the credit markets in the first place. The boards and top management of Ambac and MBIA didn’t even seem to be on the boat. Fitch Ratings still maintains an ‘AA’ rating for Ambac, which it downgraded in January.

As the world continues to reel over uncertainty regarding the future of CDO’s, structured investment vehicles and their ilk -even their value is hard to measure- are we really to believe that the institutions whose fate is most linked to the worth of these vehicles are still “AAA”?

It’s a little like having a giant measles epidemic. The hospital that specializes in its treatment is full to the brim with measles patients. But the CDC says it’s really safe for visitors and other patients. Would you go there to have your appendix taken out?

Something is being stretched here –and it’s not just credibility.