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.

Former Hewlett-Packard director Thomas Perkins laments the rise of what he calls “compliance” boards filled with checklist directors who do not understand the business of the company they oversee and whose primary focus is ensuring that they live up to the letter of the law. He favors the “guidance” board, which he sees disappearing. Mr Perkins seems to believe that only the latter have any interest in understanding the businesses of the companies they direct or are capable of adding real value.

This is just one more rather poorly disguised attack on Sarbanes-Oxley legislation, which enshrined generally accepted minimum requirements that any board must follow if directors are truly assuming the responsibility of directing. No doubt about it, many directors don’t like the idea of rules in the boardroom and prefer the cushy, clubby old days when directors didn’t have to answer for their actions. The drive for change and higher standards of compliance and accountability that seem to bother people like Mr. Perkins came about after many decades of scandals where boards were given to regularly claiming they had no idea about the problems facing the company, usually because they were so disengaged from its affairs that the staff in the mail room were better informed than the directors in the boardroom. SOX sought to change that culture. I supported its enactment in submissions to Congressional committees at the time and remain committed to its groundbreaking role in raising governance standards and upholding public confidence in capitalism. Wise directors know they have a job on their hands to restore the image of a much disparaged institution and are working hard to bring the boardroom into the 21st century. They do not view, and none should be tolerated who see, compliance and creativity as mutually exclusive.

Directors do not hold office simply to advise the CEO and provide moral support; they are there to supervise top management. Of course, an exchange of views and experiences between directors and management is always important in the boardroom and good directors support CEOs in a number of ways. But the real issue is not what Mr. Perkins calls “plug to plug” directors. It is that in too many cases in the past, directors were little more than ornaments that only came to light when the CEO plugged them in –and much of the rest of the time they were left completely in the dark. Those were neither “guidance” nor “compliance” directors; they were disengaged directors. There are too many still in business today. Changing that culture is what lies behind the move to reform the boardroom.

How or if Mr. Perkins fits into this new world is something he can decide for himself. Personally, I thought the HP merger with Compaq was a disaster and I put that position on the record during the time of Walter Hewlett’s campaign opposing it. I find little evidence to suggest that HP’s shareholders were well served by that corporate marriage.

I agree that we don’t want directors who see their job as one purely of lawyering and bean counting. Directors of vision are always essential and should be encouraged, and, in my view, they are no more rare today than they were in the decades that preceded SOX. But the suggestion that keeping companies honest and accountable has reached such a burdensome level that it impairs the ability of directors, or relieves them of the duty, to understand their business and contribute significant value at various levels is…well, rubbish.

Sorry to be so blunt, Mr. Perkins, because I was rather looking forward to a spin on your new $100 million yacht, which I’ve been hearing so much about. I think I could have offered some sound guidance.