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.

Declining bonuses this year? How about boards showing a little spine and demanding that executives give back a chunk of the oversized paychecks that were awarded in the years when these ill-fated decisions were being made.

It’s dangerous to be walking around Wall Street these days. You never quite know when another company will hit the ground with a walloping loss or some CEO will tumble out of his job. Is it not astonishing that when chief executives are elevated to god-like status, with a commensurate compensation package, sometimes they are a little light in the miracle production department? Many are appearing a bit too human in the wake of the subprime fiasco. It is not a role to which they have been accustomed.

Countrywide Financial’s Angelo Mozilo was one of the top paid CEOs for 2006. Over the past five years he pulled in more than $160 million. Too bad it was not enough to have a little vision included with the price. There are many who think the company’s third quarter loss of $1.23 billion was just the beginning. At Citigroup, former CEO Charles O. Prince was paid close to $26 million last year, with a pat on the back from the board especially for –hold on to your hats– improvements in “internal controls.” Citi is looking at write-downs that could exceed $11 billion. It’s scary to imagine what the numbers might have been if Chuck had not been on top of those controls.

Over at Bank of America, where option gains helped to boost Ken Lewis’s pay to $97 million last year, they are taking a subprime-related hit of about $3 billion for Q4. Stanley O’Neal regularly struck gold with his paydays at Merrill Lynch, which he headed until late this year. For 2007, he received $47.3 million. Merrill’s directors will surely be haunted for the rest of their lives with the thought that if they had only been a little more generous it might have motivated Mr. O’Neal to prevent that nagging $8 billion subprime related write-down. Penny wise, pound foolish? It’s worth pondering.

Morgan Stanley has already seen a casualty in its executive ranks in Zoe Cruz, who was ousted from her $30 million a year job. Still, there is some thinking that the company should have received a bit more for the $40 million bonus it gave to CEO John Mack last December than the $9.4 billion hit it announced this week. The company also posted a fourth-quarter loss of $3.56 billion, the first in the Wall Street icon’s history. Mr. Mack actually went out of his way to court the subprime disaster, having, as The Wall Street Journal reports, “acquired a subprime-mortgage company, Saxon Capital Inc., for $706 million last December, even as warnings about the subprime storm were being sounded.” It is impossible to conceive that there will not be many more boardroom casualties before this chapter in the excesses and follies of North American business is finally played out.

Just today, Bear Stearns announced a fourth-quarter loss of $854 million – the first in its 84-year history- resulting from a $1.9 billion write-down in mortgage-related securities. That might even be just a slightly bigger disaster than losing at a bridge tournament, which CEO James Cayne insisted on attending last summer as the company’s hedge funds were collapsing in the subprime meltdown. For the $26 million paid to him last year, one can hardly expect a CEO to forego a holiday just because of a little kerfuffle back at the office.

Wall Street’s biggest players have made their fortunes from the fees generated substantially by the creation of ever more complex investment vehicles. The subprime market was their paradise and in many ways they can be viewed as the architects of their own reversal of fortune. This is not a situation that can be atoned by CEOs giving up bonuses this year, as Mr. Mack and Mr. Cayne have announced. This is about the growing boardroom insanity behind what many on Wall Street and elsewhere are paid in the first place that has no basis in reason or common sense. Declining bonuses this year? How about boards showing a little spine and demanding that executives give back a chunk of the oversized paychecks that were awarded in the years when these ill-fated decisions were being made?

Most rational people know that CEOs are not possessed of superhuman strength. Nor do they have X-ray vision. In fact, many can’t even see the obvious, which, in the cases above, was a train wreck headed right in their direction. The problem is that too many CEOs, and the boards that elevate them to this divine status, don’t seem to understand this, and continue to cling to the illusion that they are actually worth what they are paid. For them it will take longer to accept the unfolding principle of titanic executive pay:

those whom the gods would destroy, they first raise up to the status of the heavenly compensated CEO.