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.jpgMain Street always pays for the wild parties Wall Street throws and the cleanup required afterwards.

Do you have your ticket for the Great American Boardroom Bailout Sweepstakes? Probably not. You need a special pass to get to the front of the line. Angelo Mozilo, CEO of Countrywide Financial, once the largest mortgage lender in the United States and now the poster child for financial ruin for itself and millions of homeowners, has one. And it’s a beaut. While steering his company into a Titanic-like credit collision and foisting loans on the most vulnerable and least able to handle them, the king of subprime mortgages has pulled in hundreds of millions in salary, bonuses and stock options since 2000 alone. In 2006, when he was still sowing the seeds of the subprime disaster, he was one of the 10 highest paid CEOs in America, coming in at $142 million. In the past several months, in what we have called before a miraculously well timed event, he has been selling off tens of millions in stock from the exercise of generous options provided by a hand-picked, all-male board whose propensity to prevent any suffering on Mr. Mozilo’s part knows no bounds. All the time during his flurry of recent sales, he, like Ken Lay before him, claimed the company’s fortunes were looking good. We know how it ended for Enron. Now, Mr. Mozilo stands to gain another $100 million or so in severance as a result of the proposed takeover by Bank of America.

Countrywide’s shareholders, who up to now have preferred to see only a rosy future and never turned their eye to other signs that suggested a downside for the company, like, for example, rather irrational levels of CEO pay and poor corporate governance, will also enjoy a bailout. Bank of America is offering to buy the stock, but only at its current near-52-week low. Not exactly what investors were hoping for, since most –except Mr. Mozilo– will be losing a bundle on the deal. But it’s still more than they would get if the company went under, and a better deal than most homeowners are getting.

Bank of America likely thinks it doesn’t have to worry because much of the purchase can be financed one way or another through the Fed’s bailout program of making lots of cheap money available to banks. Low interest funds in the hands of financial institutions helped to create these toxic credit concoctions in the first place. Wall Street and the banks, like recovering drunks on a cold Monday morning, have notoriously short memories when it comes to fee-producing extravaganzas, so it is unclear how long today’s more sober mood will prevail. During Bank of America’s webcasted conference call today, the sound of a train could be heard faintly in the distance. Some might be wondering if it was really an omen of the larger train wreck waiting to happen.

This is only the beginning of the bailout process that is unfolding. In this deal, the perpetrators of the current disaster who made their great fortunes through financial machinations held up by little more than hot air and fast talk will walk off with even more. The banks that made it all possible will wind up becoming bigger thanks to a panicky Fed which seems prepared to throw money out the window just to keep up the appearance of doing something. Let it not be forgotten that when the banks and investment icons were beginning to pull off their heist of flimsy loans and loopy investment vehicles a few years ago, it was the Fed that drove the getaway car, having turned a blind eye to the high risks that were being incurred.

Management will always be compensated handsomely whatever happens, no matter what its role in engineering the calamity. There is no groundswell of demand that Stanley O’Neal give back any of the hundreds of millions he made off with while he presided over decisions at Merrill Lynch which will result in a staggering $15 billion loss, according to the latest reports.

Investors will do less well, of course, but much better than the ordinary individuals on whose behalf the Fed is supposed to be acting but thus far has shown little inclination or ability in that regard. And let there be no doubt: A large chunk of the costs incurred by these mounting losses, the takeovers and overall decline in investor- and consumer confidence will be in the form of lost jobs and layoffs in the financial sector and in the wider economy. Main Street always pays for the wild parties Wall Street throws and the cleanup required afterwards.

The final costs of this financial nightmare will probably never be tallied. Nor will there be any discussion or accounting of the consequences of more and more sovereign funds controlled by despotic regimes or sultans whose oil wealth insulates them from the intrusion of the slightest molecule of reality here (or criticism in their own lands) gaining control of the financial heart of North America as a result of the greed and folly of its present stewards.

Welcome to the bailout of American capitalism, 21st century-style. Some will see it as their ticket to bigger pay and a way of holding on to the fortunes they were making while masterminding this calamity. Others will call it the market working its magic. At the very least, we call it the Outrage of the Week.