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.

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.