Courage and Prescience:
Seeing tomorrow’s challenges and opportunities — today.
“When I say directors need to direct, I am talking about a board that will really supervise the management of the corporation. To do that, directors need to be inquisitive, vigilant and informed. They need to evaluate the CEO and make sure that the company has a proper structure in place to do that. Above all, directors need to exercise independent judgment in determining what is both perceived and known to be in the best interest of the company, of its stockholders, its reliant stakeholders and, ultimately, of society itself.
This is the trust that directors assume when they accept the responsibility of directing.”
(Testimony by J. Richard Finlay, appearing as the first witness ever to be called as an expert in corporate governance before the Banking Committee of the Senate of Canada, 1994.)
OUR ENDURING MISSION
The Centre for Corporate & Public Governance, now The Finlay Centre for Corporate & Public Governance, has been illuminating the evolution of private enterprise and public trust for more than four decades. It is North America’s first fully independent think tank dedicated to improving boardroom practices and strengthening standards of accountability and stakeholder service in major corporations and public institutions. The Centre’s original research, informed advocacy and media appearances began a transformation of corporate governance, standards of boardroom ethics and stakeholder capitalism. Our insights, innovation and fresh ideas continue to do so four decades later.
The Centre has been widely recognized for its contributions to landmark legislative and regulatory reforms, including expert testimony before Canada’s Senate banking committee and the Toronto Stock Exchange. The Centre was the first organization of its kind to be called as an expert witness on corporate governance during hearings of the Senate banking committee in the early 1990s.
Many boardroom practices that are today taken for granted, including the formal education and certification of directors, disclosure of the number of board positions held by any one director, the creation of fully independent compensation committees, and the codification of board best practices, were first given voice by The Centre in public hearings, keynote speeches, legislative testimony and in dozens of op-eds. The Centre was the first to propose the creation of governance committees, which today are common among all boards of publicly listed companies.
The same focus on the transparency, accountability and ethical standards The Centre originally brought to corporate governance it also brings to public institutions. It’s critique of the governance practices of the IMF and the New York Federal Reserve, for instance, drew attention and discussion at the highest levels, including the Congress of the United States.
The Centre is regularly sought out by governments, the academic community and the media for its authoritative insights and expert commentary. Over the years, The Centre has been called on to advise governments, public sector agencies, financial institutions, communications giants and law firms on critical governance and ethics issues, including crisis management incidents.
“A study by Finlay’s Centre for Corporate & Public Governance shows that many boards devote far more time and energy to compensation than to assuring the integrity of the company’s financial reporting systems.”
BusinessWeek, “The Crisis in Corporate Governance.”
THE CEASELESS VOICE OF CHANGE
The Centre was founded by J. Richard Finlay, whose first-hand boardroom experience and prescient voice have made him one of the world’s longest-cited experts in modern boardroom practices, sanity in CEO pay and the ethical responsibilities of trusted leaders. An early pioneer on the evolving role of business in society, Richard’s prescient views on social responsibility and the rise of stakeholder capitalism — a term he coined– were distilled in a series of lengthy award-winning articles which have been citied in dozens of books, scholarly papers and law review journal
For several decades his views and ideas were sought out at the highest policy levels in Canada. He has written speeches for three Prime Ministers of Canada and his policy proposals and ideas formed the basis of a number of national initiatives, including a royal commission into Canada’s economic future. He has been a popular keynote speaker and sought after panelist for several decades.
His work and ideas have been frequently cited in debates in the House of Commons and the Senate of Canada, in scholarly articles and legal publications, and in dozens of best-selling books, including Peter C. Newman’s Titans and Rod McQueen’s Who Killed Confederation Life?
In the private sector Richard participated in the founding, re-vitalization and restructuring of major corporate players in real estate, financial services and public affairs. With a constant eye on the seeds of folly and complacency that have undone countless leaders and corporations, Richard was among the first to see red flags at Confederation Life, Crown Life, Eatons, Lac Minerals, Dennison Mines, Bear Stearns, Livent, Hollinger and a string of second tier financial institutions like Fidelity Trust and Unity Bank. He also correctly predicted the demise of those empires. The same seeds of smugness, self-approbation and ethical disdain that marked the fall of these companies lie within many organizations today, as does the potential of a similar failing trajectory.
Richard has been an unrelenting voice in speeches, interviews and his op-ed columns for diversity, inclusion and the expanded role of women in top management and in the boardroom since the early 1970s. He was one of the few inside business at the time to advance those views. Today, equity in the workplace, and diversity in the boardroom remain an unfished task that commands much of his time and philanthropic activities.
For many years, Richard was a regular contributor to The Globe and Mail and the Financial Post, where he frequently broke news on stories that had not been reported anywhere else. In a landmark op-ed in The Globe and Mail in the 1980s, he broke newground by calling for changes in the appointment of judges to Canada’s supreme court. It was the first time the proposal for an open hearing process had been made publicly
A SHARPER LENS ON GOVERNANCE, ETHICS AND ACCOUNTABILITY
The Centre correctly predicted the worldwide
groundswell in demand for boardroom reform and alerted policy makers and legislators to the dangers of disengaged directors and excessive CEO pay, telling BusinessWeek magazine and the U.S. Senate banking committee that “oversized compensation too often tempts CEOs to take actions that artificially push up the price of the stock in ways that cannot be sustained, and to cash out before the inevitable fall.” It was precisely that phenomenon that contributed to the worst recession since the Great Depression and the costly firestorm of corporate scandals and bailouts that followed.
Through media interviews and op-ed columns, The Centre was the first to identify lapses in ethical conduct and boardroom practices on the part of Barings, BreX, Bear Stearns, Lehman Brothers, RT Capital, AIG and Hollinger, among others. The Centre was also the first to bring to public attention failures in governance at the U.S. Federal Reserve System of New York. The Centre’s work in that regard was raised in the U.S. House of Representatives as the global financial crisis unfolded. It has been an unparalleled voice for higher standards of ethics and social responsibility in the conduct of boardroom decision-making and executive leadership in both the private and public sectors.
The Centre’s work and ideas have been frequently cited in debates in the House of Commons and the Senate of Canada, in scholarly articles and legal publications, and in dozens of best-selling books, including Peter C. Newman’s Titans and Rod McQueen’s Who Killed Confederation Life?
The Centre’s interviews and comments have appeared in The New York Times,
BusinessWeek, Wall Street Journal, the CBC, BNN Bloomberg, New York Post, Newsday, Canadian Business Magazine, The Globe and Mail, The Financial Times, Bloomberg, Toronto Star, Associated Press and Reuters. Its work has also been profiled in major publications in Europe and South America. For many years, J. Richard Finlay was a regular contributor to The Globe and Mail and the Financial Post, where he frequently broke news on stories that had not been reported anywhere else.
In a landmark op-ed in The Globe and Mail in the 1980s, he broke newground by calling for changes in the appointment of judges to Canada’s supreme court. It was the first time the proposal for an open hearing process had been made publicly. For many years, the column was required reading in Canadian law schools and was the subject of considerable discussion both in judicial circles and in Ottawa. It resulted for a period of time in televised “confirmation” hearings by a House of Commons committee held in connection with such top judicial appointments.
“In a system devoid of any semblance of public scrutiny and open confirmation, Canadians are never afforded an opportunity to know about a nominee’s record and views before he or she sits on the nation’s highest bench. They simply wake up one day and learn about the appointment in the morning newspaper as a fair accompli.
(J. Richard Finlay, “Cast off the cloak of secrecy,” The Globe and Mail October 22, 1987.)
BUILDING A BETTER TOMORROW
The values and commitments that led to The Centre’s founding four decades ago drive its agenda for the future.
Too many boards remain captives of powerful CEOs. Compensation is still too skewed toward short-term goals. Boards justify too many pay decisions by calling them an exercise in discretion. Others call them a descent into fantasy land. The public sector, including municipal governments, has yet to experience the groundswell of discontent-driven rethinking that corporate boards did some years ago. The regulatory capture mindset of public agencies, boards, commissions and professional disciplinary bodies is the tip of an iceberg of underperformance and lack of accountability that calls out for change. Incursions on individual privacy remain at unacceptable levels in society, exacerbated by weak enforcement mechanisms at the government level and hobbled by the lobbying power of industry interests. The Centre continues its founding role as one of the world’s foremost champions of stronger privacy standards, with tough laws, backed up with teeth, to ensure compliance.
Diversity of voice, gender and colour at the table remain a systemic challenge in too many boardrooms and in other centres of power. The evidence of these missing voices abounds throughout society, from our smallest First Nations communities to our largest cities. The Centre hears the voices that too often are forgotten and is determined that others will hear them, too.
We accept engagements on only an occasional basis. Like you, our standards are high. If you are interested in what we do, and think you are part of an organization we would like to work with, drop us a line.
The Finlay Centre for Corporate & Public Governance is proud to directly support such worthy causes as The ZeroNow Campaign, PatientProtection.Healthcare, The Center for Patient Protection, and The Campaign to Bring 988 to Canada. These organizations provide one-to-one support to victims and survivors while advocating to advance gender equity, combat sexual violence and harassment and reduce the cost and harm of medical errors in the healthcare system, along with improved mental health and suicide prevention delivery.
Should we talk?
Over the years, we have advised and partnered with international law firms, governments, leading foundations and the boards of listed companies. Today, we accept only occasional assignments. Like you, our standards are high. If you are interested in what we do, and think you are part of an organization we would like to work with in advancing these timeless truths in successful leadership and governance, drop us a line.
Illuminating the evolution of private enterprise and public trust over four decades. The Finlay Centre for Corporate & Public Governance is the first and longest running think tank of its kind capturing the promise of the well-governed organization and the ethical practices that shape it.
“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 only when leaders lead with integrity, when directors actually direct, when ethical values are the sunlight that illuminates all decisions and when major organizations are held to the highest standards of accountability by vigilant stakeholders and informed individuals.”
J. Richard Finlay
We work with diligent, forward-thinking directors and trustees to advance the agenda for the new boardroom of today: diversity at the table; sanity in CEO compensation; ethics that gleam with integrity and leadership that stands as an unrelenting champion of hope for all stakeholders. And stakeholder capitalism, of course. We invented the term four decades ago. Read more about what we do.
Now advising on ethical crisis management. Bringing four decades of global experience in ethical risk and prevention for responsible boards and public institutions. Always important, and in the post-pandemic era that is seeing a revolution in how the public expects organizations to act, more important than ever.