The Finlay Centre for Corporate & Public Governance
Our Record of Achievement Built on Values ~ and Hard Work
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 advancing higher standards of ethics, transparency and accountability in major corporations and public institutions. It is the oldest continuously cited influencer on modern boardroom practices and the attributes of institutional trust. 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.
The Finlay Centre’s trailblazing research on ethics, social responsibility and governance have influenced generations of thoughtful decision-makers. Our work and advocacy preceded today’s ESG by several decades. J. Richard Finlay coined the term stakeholder capitalism in the 1980s. Today, The Finlay Centre for Corporate & Public Governance continues to chart the path toward the timeless truths of integrity, diversity, equity and fairness that are the pillars of success — and legitimacy — in all trusted organizations.
Widely recognized for our contributions to landmark legislative and regulatory reforms, The Finlay Centre was the first organization of its kind to testify before hearings of the Toronto Stock Exchange in 1993 and 1994, at various regulatory reviews in the investment industry, at the banking committee of the Senate of Canada in 1993, 1994 and 2002 and at several committees of the House of Commons, which led to the passage of Canada’s first lobbying legislation. The Finlay Centre has also made groundbreaking submissions to the New York Stock Exchange and to the Banking Committee of the US Senate in advance of passage of the Sarbanes-Oxley Act of 2002.
Many of today’s boardroom practices were first given voice by The Finlay Centre
The same focus on transparency, accountability and ethical standards The Finlay Centre originally brought to the governance of corporations we also apply to public institutions. Our critique of the governance practices of the IMF and the New York Federal Reserve, for instance, drew attention at the highest policy levels, including inside the US Congress.
The Finlay Centre has spotlighted shortcomings in the governance and accountability of the New York Stock Exchange, the New York Federal Reserve, the TSX, the Ontario Securities Commission and in conflict rules pertaining to investment analysts. In recent years, we have focused on improvement opportunities in municipal governance and with public boards, commissions, agencies and adjudicative tribunals. Too often, these bodies give the illusion of public participation and access to information while effectively thwarting both with complicated bureaucratic machinery that make them impenetrable to ordinary stakeholders and everyday actors.
Over the course of more than four decades, The Finlay Centre and its founder have published hundreds of articles and commentaries. Many have made their way into proceedings in the US Congress and Canadian parliament, as well as best selling books, scholarly papers and op-ed pages. For years, our companion site, FinlayONgovernance, was one of the most widely read and quoted sources of cognitively diverse thinking and thought-provoking analysis about modern boardroom practices, including the dysfunctional system for awarding CEO pay and its malign outcome.
With uncanny accuracy, in numerous op-eds, media interviews and on the pages of The Finlay Centre’s FinlayONgovernance, J. Richard Finlay was the first to identify existential governance failings and boardroom misadventures of major corporate players and stock market darlings. As he later pointed out to the US Senate Banking committee and its Canadian counterpart, these boardroom debacles were often fuelled by excessive CEO pay as well as an abundance of disengaged directors. He was the first to raise issues that ultimately led to the demise of notable corporations, and in many cases accurately predicted the collapse of others, including Northland Bank, Confederation Life, Enron, WorldCom and Countrywide Financial, Crown Life, RT Capital, Corel, YBM Magnex, Eaton’s, RIM, Lac Minerals, Nortel, Dennison Mines, Bre-X Minerals, Livent, Hollinger, Fidelity Trust, Standard Trustco and Unity Bank, Lehman Brothers and iconic Bear Stearns, where his two-part analysis called Did Bear Stearns Really Have a Board? captured rapt attention by regulators and law makers worldwide. He also put the boardroom practices of monoliths like Bank of America, Citigroup and Merrill Lynch up to the light of governance scrutiny like nobody had done before.
It is this unmatched prescience documented in a chronicle of disaster foretold that substantially sets The Finlay Centre for Corporate & Public Governance apart from organizations claiming a governance focus that have more recently come into the picture.
A recognized voice of record
Over the years, The Finlay Centre for Corporate & Public Governance has been called on to advise governments, the university community, NGOs, charitable organizations and major corporations. Three prime ministers of Canada have publicly cited and benefited from our work. The Finlay Centre has worked with the media to educate on the role of ethics, social responsibility, trust and good governance as defining attributes in our economy and democracy and has participated with experienced journalists in breaking front page news stories.
Writing the next chapters
Building on our record of leading-edge thinking and accomplishments, the lab activity at The Finlay Centre for Corporate & Public Governance continues at pace. We’re examining and testing tomorrow’s game-changing ideas and tectonic shifts so others can begin to work and make a difference with them today. We’re always happy to hear your thoughts and suggestions.
For every major corporate policy, decision or public explanation, more and more people are asking: Is it right? Is it fair? And most perplexing of all for the board of directors: is it in the public interest?
It now seems clear that the profitability and economic performance of a corporation will increasingly cease to be the sole criteria by which it is judged. A new set of legitimizers of public consent is coming to the fore, accelerated and strengthened by the harsh realization of the fragile interdependence that links our economy, our society and our environment.
J. Richard Finlay, Business Quarterly, 1979.
(Presaging the arrival of ESG by more than 40 years)
. . .
There is a revolution that is beginning to confront the major corporations of North America. Its driving force is a combination of social responsibility advocates and traditional shareholders. Together, these groups are united in their determination to impose a higher level of accountability and responsibility from today’s major corporations to ensure that corporate resources are used fairly and in ways that avoid posing danger to consumers, employees, the environment and the public interest.
This is the rise of stakeholder capitalism. If it is successful, it could fundamentally alter accepted standards of corporate responsibility and performance.
J. Richard Finlay, excerpt from “Ethics and Accountability: The Rise of Stakeholder Capitalism,” Business Quarterly, 1986.
. . .
Another thread seems to be bolting from the already unravelling mess of environmental, social and governance investment ratings (“S&P drops ESG scores from corporate borrower ratings amid political backlash”, Report, August 9).
Why is this not surprising? ESG is a perfect storm for baffled board directors in their interaction with a world too many are insulated from and often little understand. Conflicts abound. Pushed by rating agencies that collect huge fees, and not infrequently, consulting work from the companies they rate, ESG services have also been sold as another compensation bonus scheme for top management.
It’s no coincidence that ESG rating information and board explanations for corporate compensation awards seem to be written in the same abstruse style. Sorting out actual performance from self-serving statements is a bewildering experience.
When I began pioneering ESG values decades ago, it was in the context of what I called the new legitimisers of public consent that coalitions of stakeholders were starting to force upon resistant boardrooms.
The chief barriers to adoption then were a lack of cognitive diversity among directors and an almost chronic inability to imagine a different future.
Those barriers still hobble decisionmaking today, where boardrooms and ESG rating agencies often see the world through a very blurry ethical lens.
J. Richard Finlay, writing in the Financial Times, August 21, 2023.