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.

The board’s actions and events in the company it oversees have already made its members look like fools. They should not be permitted to add the trappings of clowns to the boardroom as well.

It was a board that presided over the largest insurance company in the world. Yet it was apparently oblivious to the mounting derivates risks being taken on by AIG’s Financial Products unit. When the Office of Thrift Supervision sent a letter to the company in March, advising of material weaknesses in oversight of the unit and in the valuation and accounting of its products, whatever steps were decided upon did nothing to remedy the problem. Even the company’s own auditors warned the board about accounting problems in the unit. These two revelations should have set off alarm bells in the boardroom. There is no evidence that anyone even woke up long enough to call 911.  The board was apparently stunned to discover the dire state of the company the day federal regulators and officials walked in to say liquidation or nationalization were the only choices remaining, and the first option was not really on.  It is the history of countless corporate catastrophes to find boards dazed and suprised about the arrival of disaster in the boadroom when everyone else could hear its heavy footsteps coming closer and closer for some time.

In 2007, the board’s compensation committee agreed to ignore AIGFP’s losses so that executive bonuses would not be adversely affected. How thoughtful a board can be when times are tough for its friends at the top. But as losses soared into the billions and obligations because of risk failures spun out of control, the company foundered and the U.S. government had to prop it up with an $85 billion loan.

Undeterred by the outrage the unprecedented bailout prompted among taxpayers and shareholders, the company’s tone-deaf public relations talents masterminded another blunder. AIG decided to spend $440,000 on a weekend retreat at a luxury spa in California for employees and independent agents. It was explained that the event was planned for some time and that the agents were looking forward to it. There would be no reason why the near-collapse of the company and the unprecedented rescue by the federal government should cause any disruption to the social calendar.

Just today, it was announced that the government had to put up a further $38 billion to keep the company going. Share value is all but shattered and with its close today at $3.19, the stock remains a faint shadow of its 52-week high of $70.13. It is difficult to know why directors with a record like this are still on the job. The question also needs to be asked, especially in light of this second multi-billon dollar bailout and recent spa-junket, how many more disasters are going to occur on their apparently shut-eyed watch?

The board’s actions and events in the company it oversees have already made its members look like fools. They should not be permitted to add the trappings of clowns to the boardroom as well.

AIG’s directors should either get a grip on the company and  show they comprehend the new public dimension to their duties, or they should find another line of work.

It would be difficult to see how the company would fare any worse for their absence.