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.

Floyd Norris has added a heretofore unexplored slant on Home Depot’s bungling of its expensive parting with former CEO Robert Nardelli by suggesting it was Lowe’s, HD’s chief competitor, and not Home Depot’s investors (and certainly not its employees), who benefited most from Nardelli’s tenure. And for that privilege, they will now pay out $210 million more, on top of the tens of millions paid to this icon of CEO excess over the past five years. It is a strange commentary on the quality of corporate governance in America, and the directors of Home Depot in particular, when you consider that the board has done more for its rival than for its own stakeholders. And, as I revealed in my posting here, this is a board that pays itself very well indeed with other people’s money.I added the following comment to the posting on Floyd’s New York Times blog.

Home Depot’s board offered a compensation package of more than $245 million to CEO Bob Nardelli over five years, according to the Times, during which period the company’s share value continued to plummet. His $210 million severance comes on top of this. It was a failed strategy one presumes from the changes announced this week. Is it just me or does that seem like a lot of money for the privilege of failing? I say this fully acknowledging that the Home Depot pay fiasco is symptomatic of the wider disease of excessive CEO pay abuse, which I long ago dubbed the “mad cow disease of the North American boardroom”.

Nardelli’s autocratic domination of the company’s annual general meeting, where he routinely cut off shareholders’ questions after one minute and ended the meeting after half an hour, and which not a single member of the board bothered to attend, was an event that would bring a smile to Kim Jong-il.

This was the clearest illustration of a CEO and a board who forgot to whom and for what they are accountable. Add to this the low marks the company receives for customer service and recent revelations that it routinely backdated stock option dates for the past 19 years, and the only reasonable conclusion is that Home Depot and its board are indeed in need of serious renovation. Nardelli’s exit is only part of the solution.

The second shoe in the form of board resignations is what investors need to hear next.