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.

Until directors actually do their jobs when it comes to risk, instead of merely boasting about them, disaster will be the inevitable intruder in the slumbering boardroom.

AIG, the giant insurance company which specializes in the assessment of risk, has accounting problems –again. This time, auditors discovered “material weaknesses in its internal controls.” The cost of that weakness comes in the form of a $4.88 billion write-down. It is nearly four times the earlier estimate given by the company. Just last year, AIG paid $1.6 billion to settle state and federal charges that it engaged in deceptive accounting practices to mislead investors and regulators. The payout set a record at the time.

You might wonder how a company that went through such a wrenching and costly experience over poor accounting practices finds itself in another accounting pickle so soon. The answer is that directors have a short-term memory problem. Merrill Lynch also went afoul of regulators in the early 21st century and had to pay out a huge amount to settle. Citigroup had to set aside millions in connection with Enron and WorldCom lawsuits. CIBC, the giant Toronto-based bank, also paid millions to settle regulatory charges that it acted improperly in its Enron dealings. All of these institutions are posting record losses and write-downs related to defective credit instruments. And once again, questions are being raised about whether management and directors are really on top of the affairs of the company.

One might have expected a prudent boardroom to be scrupulous, and more successful, in avoiding mishaps so soon after a previous embarrassment. In AIG’s case, it was required to issue an apology last February, which stated in part:

Providing incorrect information to the investing public and regulators was wrong and is against the values of our current leadership and employees.

But in the modern boardroom, where historically the preferred posture has been lateral for most of the time, there is a tendency to overstate the rejuvenating effects of reform while quickly slumping back into somnolence. The scandals of the Enron era revealed major weaknesses in the accounting and internal controls of many companies. Sarbanes-Oxley was passed in 2002 to address some of the most glaring defects, and companies responded by trumpeting how much more engaged their boards were. But in a few short years, the world has once more been forced to witness the spectacle of boards that did not properly oversee the risks their companies were incurring and ensure that adequate controls were being followed. Shortcomings in internal controls and the managment of risk were also at the heart of the $7 billion trader fraud at Société Générale. They are now featuring prominently in connection with the subprime-prompted credit crisis in many financial institutions.

Until directors actually do their jobs, instead of merely boasting about them, and remember the lessons of the past when risk became a corporate orphan for which no one would take responsibility, disaster will be the inevitable intruder in the slumbering boardroom.