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.

Which hat was Mr. Fuld wearing when he said he took responsibility? And where was the Lehman board while this crisis was unfolding? No one bothered to ask.

Lehman Brothers formally reported today what it had announced last week: a staggering $2.8 billion loss for the second quarter. At a conference call, CEO Richard S. Fuld, Jr. said the buck stopped with him:

“This is my responsibility…,” he told analysts and the media on the call.

But which Richard Fuld is taking responsibility? The Richard Fuld who leads Lehman’s management team and is its CEO, or the Richard Fuld who heads the Lehman board to which he reports and is its chairman? Or is it the Richard Fuld who chairs Lehman’s two-man executive committee? Perhaps Mr. Fuld wears so many hats that even he is confused about what department his “responsibility” falls under.

Did Mr. Fuld not agree with the investment decisions that resulted in the huge loss? One notices that he did not offer to return any part of his bonus or compensation for the years in which Lehman’s poor decisions were being made. The seeds of the $2.8 billion loss, and much more in write-downs, weren’t sown just in the past three months, you know.

We have raised Lehman’s corporate governance shortcomings here before. What is surprising is that no questions of this type were introduced by the media or analysts when they had Mr. Fuld on the other end of the call today.

It might have been appropriate to ask if the board signed off on the recent changes that saw the ousting of President and COO Joseph Gregory and CFO Erin Callan. Is the risk committee meeting more frequently than the two occasions it did in the past year? What thought has been given to separating the positions of CEO and board chair or mothballing the executive committee as most companies did decades ago? Are there any plans to attract new blood into Lehman’s aging boardroom, which already sees two 80-year-olds playing key roles?

It is not possible to contemplate or tolerate a situation where one person holds three top positions in a company and then puts responsibility for a multibillion-dollar loss on those lower down. If you want all power concentrated in one set of hands, so too must be the blame for calamity when it strikes.

It was an ideal opportunity to inquire about the board culture and structure that has brought Lehman to its reversal of fortune and will shape the tone and future of the company for years to come. The media and analyst community, who like to portray themselves as guardians of the interests of ordinary shareholders, missed it this time.

They often do.