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.

We predicted last year there would be more surprises in connection with RIM’s backdating scandal. We have been following those developments regularly at Finlay ON Governance, with an admitted degree of skepticism. Most of the time it seemed we were the only ones to be doing so, as so many reporters, analysts and investors appeared to have fallen under the RIM spell that deprives certain people of the ability to think clearly.

Now, apparently some investors and analysts, like the legendary Captain Renault, are “shocked, shocked” to find that backdating has been going on here and that the U.S. attorney for the Southern District of New York and the SEC are taking it seriously. Both have opened formal investigations.

The history of this thing is tailor-made to raise the suspicions of investigators. We identified a number of them, starting with the feeble way the so-called internal probe began, RIM’s appalling state of corporate governance and antiquated board structure, the sudden bailing by some RIM directors after the investigation commenced —directors, as it turns out, who also received backdated stock options— and the flimsy, self-serving report that the company eventually produced which raised more questions than it answered. Remember how RIM’s estimated accounting restatement of between $25 million and $45 million suddenly shot up to more than $250 million? That’s some accounting.

Journalists and analysts in Canada, where RIM is headquartered, are sometimes surprised to find that the U.S. system of securities law enforcement and regulation doesn’t operate like the Ontario Securities Commission. In the U.S., they actually believe in enforcement. We have noted here before that the OSC is little more than a delayed echo of what the SEC does —and sometimes not even that— despite its top officials and staff being paid hundreds of thousands more than their counterparts at the SEC. The OSC has been meeting with, and regularly receiving updates from, RIM for nearly eight months. There is still no indication that they see anything amiss at the high tech icon. They have scheduled their next get together for June.

Here’s just one of the big problems facing RIM: The SEC gave Apple’s Steve Jobs a pass on his role in options backdating because he claimed he had no knowledge of the accounting implications of what he had done. Jim Balsillie, RIM’s co-CEO, has tried that line too. And the board committee investigating his actions —which, by the way, was also investigating its own members’ receipt of stock options and had nothing to say about how they were backdated— agreed with Balsillie. Except, as we have noted before —and Mr. Balsillie boasts about this on his company’s website— he is a chartered accountant holding the highest designation in that profession. RIM’s then CFO, Dennis Kavelman, also involved in backdating options, is an accounting professional, too. So it’s hard to see how the Jobs defense will work at RIM. They also tried the “we’re still young” defense, the “we grew too fast” defense and the “we only had metal desks when we started” defense, which we discussed here. Maybe the SEC and the U.S. attorney will be more impressed with those lines. Maybe Donald Trump will suddenly follow the teachings of Mother Teresa.

Shaken over the sudden loss of BlackBerry service last week, and now hit with formal investigations by tough regulators and prosecutors, RIM’s shareholders, customers and cheerleading chorus of journalists and stock analysts may now be poised to take a second look at what they seemed to think was a perfect company. We said there would be more surprises. Stay tuned.