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 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 sort out the mess that many dubious ESG practices are causing.


We were the first to predict seismic boardroom flashpoints and downfalls, played key parts in regulatory milestones and warned about game changing upheavals in capital markets.

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.

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.

Outrage of the Week: Democracy’s Muted Voice at Davos

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How much further will it go to appease the non-democratic holders of oil wealth or American debt? After its major banks and corporations have succumbed to the influence that multi-billion dollar investment stakes invariably enjoy, will American foreign policy someday become a commodity to be bought and sold like offshore-made pieces of patio furniture at a local Wal-Mart?

There have been many voices at the World Economic Forum this week. There were the voices for combating climate change and the fight against poverty in Africa. There was the voice of Bill Gates, who, judging by media reaction and the response at Davos, single-handedly invented the concept of responsible capitalism. All these are worthy objectives. But one voice seemed notably muted: the voice for democracy. (more…)

Outrage of the Week: The Failure and Pretense of the World Economic Forum at Davos

outrage 12.jpgOne sees in this annual Alpine pilgrimage of Davos fragments of the grainy black and white movies showing the imperial families of Europe gathering in their toy soldier costumes and opulent surroundings, oblivious to the marshaling clouds of change and discontent that would bring their primacy to an end.

Fortunately, the annual spectacle known as the World Economic Forum at Davos has folded its tent for another year. It occurred not a moment too soon, as my supply of antacids was running dangerously low. There is, of course, nothing wrong or surprising about elites from business and government getting together. Having worked with these types for many years, I am well aware that many need constant reassurance and affirmation of their significance. Being among other CEOs or heads of government is the way these people remind themselves of their importance and remind the world that they are still running the show –even in en era of YouTube and WordPress. Such vanity is best taken with a large grain of Swiss salt, I suppose. As Philip Barry sardonically observed: “One of the prettiest sights in this pretty world is the privileged classes enjoying their privileges.”

What is galling is the pretense that these events are actually transforming the social and economic landscapes. It is the disguise of social gravity, the spin that seeks to turn global CEOs into crusading St. Georges slaying the world’s evil dragons, that makes these events so offensive. These forums have become the CES (Consumer Electronics Show) of CEOs –a gigantic trade show of, by, and for the self- impressed who visit one another’s booths to see how each measures up. Sure, there are earnest proclamations about the problems of the world. And everybody has to be seen embracing Bono. The Irish have that effect on people. Everybody loves embracing my Irish Setter, too. But real change requires constancy of effort, not candlelight and wine. What affronts the reasoned mind is the idea that this gathering actually makes a difference. Restating the obvious about the problems of the world does not make a difference. Talking about issues long ago advanced by others does not make a difference. Listen, if Davos actually had the level of influence it claims over CEOs and kings, presidents and dictators, the world would rightly be jumping up and asking who elected these people and how are they held accountable for their decisions. And if it doesn’t –which is my thesis– why do we, and especially the world’s media, encourage the pretense of these people by paying so much attention to them year after year?

Tell me one major sea-changing event that has been anticipated or predicted at Davos in the past two decades. Show me a crisis that has been averted. Everything takes place in rear-view time. That’s more than a little disappointing. Because I and many others have a lot invested in these companies and in the CEOs who head them. I’d like to believe that such high-priced talent is capable of leading in a way that will avoid catastrophes. In many respects the image is one of myopic leaders still sitting atop the overreaching and unsustainable and who refuse to recognize the existence of icebergs until the Titanic calamity occurs.

Here’s an idea: Since so much discussion at Davos seems outwardly, at least, to center on issues of Africa and global poverty, how about a World Economic Forum that takes place in an impoverished region so that it can be experienced first-hand. True, there might not be the luxurious surroundings of Davos or the glittering parties, but surely that’s not really the purpose, as the organizers of the event take regular pains to point out. And if the growing economic divide is really as troubling as some Davos participants argue, how about the wealthiest CEOs at Davos volunteering to freeze their own pay for a few years as a sign of leadership and as a model for others? These things won’t happen because Davos is not really about correcting terrible wrongs. And it is certainly not about leadership. It is about contacts and connections, knowing the right number to call and how new deals can be won.

As German steel baron Jürgen Großmann admitted, “The spirit of Davos doesn’t just float around. You have to look for it in the conversations…Furthermore, we’re interested in wealthy clients. The richer our client countries are, the more stuff we sell them, especially cars and machines that Germany makes lots of.”

Of all the deficits and shortages in the world today, it is the lack of genuine character in so many leaders and the absence of truly transformative leadership that is the most striking. In this, Davos is an apt mirror. One sees in this annual Alpine pilgrimage to Davos fragments of the grainy black and white movies showing the imperial families of Europe gathering in their toy soldier costumes and opulent surroundings, oblivious to the marshaling clouds of change and discontent that would bring their primacy to an end. Those who are trying to make the world better are doing it anyway, regardless of Davos. And for those who are not so inclined, going to Davos won’t likely make any difference.

This year, Davos organizers attempted to make use of social media –blogs, videos, podcasts and the like- to bring ordinary people into the tent –but at a safe cyber-distance, of course. The effort bombed. Did they really think that people back on planet Earth would be impressed by the opportunity of clicking on the comment button of a blog in order to send back a short message in small font to some big poobah? YouTube can do many things. But making imperious titans more trustworthy or sympathetic as they schmooze or answer an amateur videographer’s questions on the fly are not among them. By the way, the really big players didn’t bother to post on any blogs. And very few mortals at the bottom of the mountain bothered to send any comments. This one certainly hits a note:

The Davos Conversation was a total failure. The end of a demagogue is when the mob pulls a no show.

And so the overfed princes and business potentates exited as they came, in a mist of mutual admiration and private jets, all the while lamenting the vexing issue of global warming –this year’s topic du jour. What is saddest about Davos is that these leaders have a chance to make a real difference. Some would argue, and I count myself among them, that they have a moral obligation to do so. Instead, they have become actors in a predictable side show of self-indulgence and extravagance –two vices which one might think would be incompatible with the ills they claim to be fighting.

Which is why the spectacle known as the World Economic Forum at Davos is the Outrage of the Week.

Social Entrepreneurship Not Invented at Davos

The New York Times’s Nicholas Kristof visited the World Economic Forum at Davos last week and came back impressed by the idea of social entrepreneurship. As his column observes today:

But perhaps the most remarkable people to attend aren’t the world leaders or other bigwigs.

Rather, they are the social entrepreneurs. Davos, which has always been uncanny in peeking just ahead of the curve to reflect the zeitgeist of the moment, swarmed with them. . . .

Glad as I am to have such an accomplished and thoughtful writer as Mr. Kristof celebrate the concept of social entrepreneurship, I felt some clarification was in order as to its so-called Davos connections. I posted the following comment on the NYT web site earlier today. Since a Times Select account is required in order to view columns and post comments (they are experiencing a bit of a financial pinch as you may know), I have reprised my comment below. I will have more on the annual Davos spectacle later in the week.

It is unfortunate that the World Economic Forum at Davos was the catalyst for Mr. Kristof’s insightful column. Davos is not exactly the spiritual center of the social entrepreneurial movement, conventional wisdom notwithstanding. I first wrote about the idea of social enterprise in 1977 (that’s not a misprint), and it has been a continuing part of my venture capital activity for more than three decades. Mr. Kristof’s observation about Davos being “ahead of the curve” on this point is therefore somewhat amusing, though I am sure well intentioned.

One of the more interesting new dimensions to the social enterprise field are the knowledge innovators who are using the Internet and social media tools to help empower individual stakeholders in their dealings with business and government, which generally suffer from an imbalance of information, power and resources. Whether the goal is helping to make consumers better informed or citizens more efficacious in tackling issues from global trade to global warming, you can anticipate far-reaching changes in the way institutions function because of the work of these knowledge entrepreneurs in the years ahead. I suspect this will not be something the disciples of Davos will wish to encourage too strongly.

The fact remains that Davos attracts only a tiny portion of this amazingly transformative force in the world. Most are too busy or too modest to contemplate a trip up the mountain and would, in any event, feel uncomfortable, as many others do, with this annual display of overreaching ego and power. Davos has essentially become the CES (Consumer Electronics Show) of CEOs.

That’s not where self-respecting social entrepreneurs want to be.