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.

outrage 12.jpgThe company became a world-class symbol of bloated CEO pay and disengaged directors —none even bothered to show up at the 2006 annual meeting. But indignation over ex-Home Depot CEO Bob Nardelli’s $200 million plus retirement package, combined with a profit slump of 30 percent in Q1 of this year, were evidently not enough to prompt a majority of Home Depot’s shareholders to support resolutions that would give them even a consultative say on CEO pay and split the positions of CEO and board chair. In both cases, management and the board opposed the moves, which goes a long way toward explaining why the proxy measures were voted down at this week’s annual meeting. For all the changes in corporate governance and SEC rules in recent years that purport to empower investors, management and directors still maintain a strong grip on the proxy process and on the outcome of any proposals. The resolution regarding CEO compensation was only intended to create an advisory mechanism and would have been non-binding on the board, but even this was viewed as too threatening to entrenched interests by the company’s Atlanta-based Politburo, otherwise known as the Home Depot board of directors.

To his credit, the company’s new CEO, Frank Blake, apologized to shareholders for the excesses and arrogance of the Nardelli era. That was nice. And most directors actually attended the 2007 AGM. But a better demonstration of the importance of investors in the Home Depot equation would have been to actually treat them like (a) adults and (b) the real owners of the company by giving them a say on CEO pay. The fact is, however, any company whose board still does not understand the concept that real accountability means a CEO should report to the board —period— and not head the board he reports to, is unlikely to understand the indispensable role that sound governance plays in improving performance and avoiding the kinds of mishaps that were synonymous with Mr. Nardelli’s leadership.

As we have observed on these pages previously, Home Depot has many problems. Undervaluing investors, employees and customers has been consistently among them. We think that needs to change if the company’s financial performance and reputation are to avoid further setback, which is why the actions of Home Depot’s board in launching a campaign to defeat shareholder empowering measures, like say on pay and improved corporate governance, are the Outrage of the Week.