Loose Canons and Apocalypse Now: Unveiling the Ethics in the Fiduciary Ethic

Second in a Series: Time to Talk About the Public Interest

The TakeAway: This essay posits that the idea of fiduciary duty, with its legal and economic constructs, rests upon on a foundation spanning centuries of insights and wisdom about human behavior and civic virtue. There’s a higher “law” that serves as a beacon for peace and prosperity affecting our economic and political lives. That’s the fiduciary ethic, which is bounded in notions of trusteeship, of stewardship, of being a custodian or guardian.

A fiduciary ethic affects not just the manner in which financial assets are managed. It also speaks to the very core of what it means to be a trustee or director or steward. Unveiling and reformulating the ethics underlying the fiduciary ethic can help resurrect the civic moral dimension to economic and political life.

This can happen through reframing and re-visioning what capitalism and economic activity are supposed to achieve, to generate meaning and value in our lives. In addition to social history, principles emanating from political philosophy, world religions, theology, and humanist philosophy can aid theory-building and point the way toward changes in professional practice.

The word “apocalypse” has been given a bum rap. It conjures up images of end times, of the world turned upside down, of frightening images from the Book of Revelation.

According to the American Heritage Dictionary, “apocalypse” commonly is associated with ancient Jewish and Christian texts from the second century B.C. to the second century A.D. that contain prophetic or symbolic visions. These images show the destruction of the world and the salvation of the righteous, the Rapture, and the “left behind”.

Through the centuries, the Book of Revelation and its apocalyptic motif became canonic, despite the fact that in those days there were all kinds of prophecies and visions throughout Asia Minor and the Holy Land. Some were buried and forgotten, but Revelations lived on.

Not many people know that Revelations might have been buried, too: it almost didn’t make the cut when the New Testament was assembled by a clerical committee three centuries after the death of Jesus.

Last year, in his New Yorker review of Elaine Pagels’ 2012 book, Revelations: Visions, Prophecy, and Politics in the Book of Revelation, Adam Gopnik notes that the Book of Revelation was inserted in the New Testament by a church council convened in the three-sixties.[1]

Since then, Gopnik writes, its vision of cosmic war has remained a popular hit, with all the elements of a Michael Bay action movie. Continue reading

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Time to Talk About the Public Interest

The TakeAway: Current global activity about “materiality” and “multiple capitals” seek to embed environmental, social, and governance considerations within corporate and investor commitments to accountability and sustainability. But they’re the latest iteration of an ancient ethic waiting to be reborn. In addition to embracing these efforts, and addressing seriously the wider sustainability context in which they exist, our current challenge is to take the next leap: Engage in a serious and sustained conversation about “the public interest” capital markets profess to support, and unveil the civic moral ethic at the heart of the fiduciary ethic.

It’s been awhile since I’ve posted anything, but I’ve been busy, writing up a storm for different clients. One piece, called Redefining Materiality II: Why It Matters, Who’s Involved, and What it Means for Corporate Leaders and Boards, finally was released last week by AccountAbility. It provides an overview of several current and overlapping global conversations about “materiality” and “multiple capitals”, and the ways in which environmental, social, and governance (ESG) issues need to be part of the risk/reward equation for investors and corporate leaders.

On that front, there are at least 4 major activities underway, exhibited by (in no particular order) the Global Reporting Initiative (GRI), the International Integrated Reporting Council (IIRC), the Sustainability Accounting Standards Board (SASB), and the Global Initiative for Sustainability Ratings (GISR). The first 3—GRI, IIRC, and SASB—are about improving corporate disclosure; the GISR is ratings, not disclosure, and about discerning corporate leaders from laggards. I’ve had direct involvement with all of these initiatives in one way or another, have many friends and colleagues working there, and find it a lovely challenge to keep up with them. If you read my AccountAbility report, you’ll learn about others, too. They’re all superb, and worth engaging and following.

That’s because they’re contributing to a 21st century definition of capitalism, and providing frameworks that incorporate nonfinancial considerations into the valuation process.  In doing so, they’re making important contributions. (Although I think we’ve enough new “frameworks” to last awhile. What we really need is more  ”execution”, “education”, “empowerment”, “experimentation”, and “engagement”. But I digress…)

However…  with the exception of GISR, in addition to falling short on situating corporate and market behavior within a sustainability context of thresholds and baselines (see Allen White’s superb piece in last week’s Guardian), they’re also relying on intellectual frameworks that, in my mind, are too narrow and tilted too far towards quantitative reasoning and market-based outcomes. Continue reading

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Fighting the Fury Once Again: 14 Actions We Can Take

Shawnee, Okla., tornado caught on tape - KOCOTV, http://youtu.be/1WoirMAj0SA

The TakeAway: Yet another deadly tornado has ripped through Oklahoma, killing at least 24, including 9 elementary school children. It came on the heels of severe weather yesterday, which generated at least two dozen tornadoes across Oklahoma, Kansas, Iowa and Illinois. We can’t continue to let this happen, so many innocent people dead or damaged by Mother Nature’s fury because of what we’ve wrought. Before yet another tragedy strikes, please consider a series of 14 concrete actions we can take to fight against the destruction created by these catastrophic weather events, and the human-made climate change that helps create them.

The images are horrifying as whole sections of the Midwest are destroyed by massive tornadoes that wreak fury on land, lives, and livelihood, leaving “pockets of fright” (as one newscaster put it) remaining in their path. This afternoon, a massive tornado estimated to be  two miles wide ripped through Moore, Oklahoma, shortly after an earlier round of storms the day before.  Strong atmospheric winds—meteorologists call it “wind shear”—fuel the intensity at levels unheard of in regions familiar with tornadic destruction. A “tornado emergency” was declared, which means, Run for cover underground, there’s no likelihood of survival.

Search and rescue operations under way at Plaza Towers Elementary. NBC News

Schools were hit, children are being pulled from an elementary school in a desperate rescue mission, and hospitals are evacuating patients to ready for the rush of injured.

Overturned cars are seen from destruction from a huge tornado near Oklahoma City, Oklahoma May 20, 2013 (Reuters / Richard Rowe)

At this writing the full scale of the carnage remains unclear, but 24 people have died, 8 of them children from the Plaza Towers Elementary School. Emergency workers and neighbors go from house to house to see who’s in the rubble.

A child is pulled from the rubble of the Plaza Towers Elementary School in Moore, Okla., and passed along to rescuers after Monday's tornado. Sue Ogrocki / AP

Those of us who grew up in the Midwest know that sickening feeling when a tornado “watch”, or “warning”, is issued. You don’t mess with these things, and everyone is taught from an early age where to seek shelter in the basement. Midwesterners, like most people, are a resilient bunch, and come together when emergency happens. We know that tornados are vicious and deceptive: when they touch the ground, they can leave unspeakable damage on one side of the street, while things are unchanged on the other side.

Having lived in New England for 42 years, I’ve never experienced this kind of fear—until a couple of years ago, when the first tornados in anyone’s memory landed in central and Western Massachusetts, killing four people and devastating 19 communities.

Those of us in the Boston area once again, just 5 weeks after the Marathon bombing, watch moving images as the tornado stories unfold, helpless in the face of sudden catastrophe, our hearts going out to those whose lives are changed forever. I live in Watertown, so have special knowledge of the ripple effect of the Marathon bombing, the bizarre chase for the bombers, their death and capture. (I swim where the kid brother used to work.)

But you don’t have to live in Boston to know that the Marathon bombings were caused by human hands and warped minds, and as people try to come to terms with cause—how do you prepare for the actions of a madman?—we know, deep down, that you can’t always prevent these kinds of terror.

But we can be more vigilant, more aware of the little things that add up to crazy, erupting with sudden force in ways that dwarf our petty self interests and apathetic “Whatevers”.

Natural disasters, it seems, are also caused by human hands and ignorant minds, as people refuse to come to terms with cause—how else do you explain the utter failure of our national leadership to pass comprehensive climate policy?—yet believe, deep down, that we’re not doing enough to prevent this kind of terror.

We need to be more vigilant, more aware of the little things that add up to crazy—our addiction to a carbon economy, our refusal to move our politics beyond gridlock, our apathetic, “It’s too big to address.

Well, hell, that’s just downright dumb. Continue reading

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Note to MurnPost Subscribers about “Environmentalism 2.0: Young People Lead the Way”

Note to MurnPost subscribers: Due to a technical problem, today’s Earth Day post by Tristanne Davis was published without subscriber notification. We’re sorry about that, but now have fixed it. Alas, we’re unable to resend the link without reposting it, which will wipe out comments and “likes”. So, here’s the link to the original: http://murninghanpost.com/2013/04/22/environmentalism-2-0-young-people-lead-the-way-2/

Please take a look at what Tristanne wrote. It’s part of our “Voices of Young People” series, and what she said is worth pondering. There’s a lot going on to build a better planet and political economy, and we hope you think about how you might get involved.

Thank you!



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Environmentalism 2.0: Young People Lead the Way

by Tristanne Davis, Occasional Contributor

The Takeaway:Today is Earth Day, and the environmental movement needs young people more than ever. We can help reignite constructive activism by inspiring and engaging the public in bipartisan ways that promote sustainable development thinking and action directed to public policy, business, and individual lifestyle choices.

Forty-three years ago today, we celebrated Earth Day for the first time. On April 22, 1970, approximately 20 million young people in the United States participated in rallies across the country to praise the earth and protest environmental degradation. To this day, that first Earth Day demonstration remains one of the largest political actions in the nation’s history.

Four decades later, we struggle to reconcile the meaning and purpose of Earth Day with a new kind of environmentalism in the face of the extraordinarily daunting environmental challenges that confront us in 2013. Continue reading

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Rituals and Renewal: Politics as Our Civic Religion

Most of us watched yesterday’s inaugural ceremonies on TV if we weren’t lucky enough to attend in person. That is, if we’ve not become so cynical that we don’t care anymore. There are people like that, and I know they have good reason to feel that way. But I’m not one of them. I view these occasions as public expressions of our faith and hope, our belief in things bigger than our capacity to understand. We’re all a part of it, this majestic ritual of democracy’s unfolding journey, not strangers. Whether or not it’s the candidate I want (and Obama is), I love our civic rituals, with all the pageantry and symbolism.

So does my old friend and mentor Dr. Barbara Brown Zikmund, a pioneering advocate for women in theology (the first female president of the Association of Theological Schools in the United States and Canada [ATS] and so much more), who knows well the importance of ritual in public life. Zikmund, who has served as both a United Church of Christ seminary dean and chief (Pacific School of Religion, Hartford Seminary) as well as church historian, has an illustrious career spanning many decades – her papers are archived at the Union Theological Seminary library, now a part of Columbia University, her fans and accomplishments are legion – and continues to remain active, in spite of retirement.  I’ve known Barb – or “BBZ”, as most of her friends call her – and her husband Joe for 44 years, ever since I was an undergrad at Albion College in Michigan. They currently live in Washington, D.C. but will be moving back to Michigan sometime soon.

Anyway, Barb and I exchanged emails yesterday, working out plans for we three to get together here in the Boston area next month. I wrote in one that I figured they’d be watching the inaugural festivities from the comfort of their couch, rather than stand out in the bitter cold.

I should have known better. Continue reading

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Gift Xchange: Giving, Investing, and Grantmaking for Good

Part One of Two

The TakeAway: Charitable requests are a constant, but the end of the year brings a blizzard of appeals. In addition to our donor dollars, there’s a vast amount of untapped money power held by nonprofit institutions, particularly if they have endowments. Here’s a listing of some of my favorite organizations that are seeking to build more prosperous, sustainable, and just societies. The idea is to create a “virtuous circle” of exchange relationships, something as old as time itself. And not necessarily limited to end-of-year benevolence. Please consider making a gift, and becoming an Xchange agent for good.

We all know the drill: from Thanksgiving to New Year’s Eve, our inboxes – virtual and analog – are stuffed with appeals—occurring now on an hourly basis, as charities seek last-minute tax-deductible contributions. Their messaging urgency makes it seem they’re on their own kind of “fiscal cliff”, that somehow at the stroke of midnight tonight they’ll disappear, like Cinderella’s bejeweled coach.

Most of us wish we had more to support them. We do what we can, but beyond a few dollars here and there, how might we use our limited charitable resources to help bring about a better world? How can we look at the entire twelve-month cycle of charitable activity, and view ourselves as “investors” in their good works? In fact, how do we even know if they’re fully using their power as change agents – after all, all nonprofits exist to advance the public interest, which is why they are tax-exempt in the first place.

How can we lengthen our leverage, so to speak, so that not only do our donations make a difference, they also join an arsenal comprising several money pots: a charity’s investments, if they have an endowment; their grantmaking, if they’re a foundation; and the formula for allocating operational funds, e.g., program and administrative costs. Continue reading

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Apocalypse Now: Sandy Hook, Gun Ownership, and Civic Moral Responsibility

The TakeAway: The world may not have ended for us today, but it did for 27 women and children who were massacred at Sandy Hook Elementary School last Friday. That unspeakable tragedy reopens debates over gun ownership, violence, and mental health treatment. One dimension of “ownership”, however, involves not just the flow of guns but the flow of capital that makes gun manufacture possible. It’s time for investors to step up and make sure that their fiduciary role does not include investments in killing machines or other holdings that undermine human and planetary well-being. Rather than restricted to specific issues and certain portions of a portfolio – as was the case during the 1970s and 1980s’ debates over South Africa- and tobacco-related equity investments – the idea here is to view the fiduciary ethic as encompassing all asset classes and all issues. We need an Apocalypse Now, a positive approach that unveils the “ethics” of the “fiduciary ethic”, ethics that are nourished by civic moral roots that serve to inform and transform.

The world was supposed to come to an end today, according to apocalyptic interpretations of the Mayan calendar, but it didn’t.

But a week ago, for 26 innocent children and women, it did. That’s when their apocalyptic moment became burned into our consciousness. It wasn’t quite end times, but the world did feel turned upside down, and there were enough frightening images to keep you up at night, even if they weren’t from the Book of Revelation.

According to the American Heritage Dictionary, “apocalypse” commonly is associated with ancient Jewish and Christian texts from the second century B.C. to the second century A.D. that contain prophetic or symbolic visions. These images show the destruction of the world and the salvation of the righteous, the Rapture, and the “left behind”. Through the centuries, the Book of Revelation and its apocalyptic motif became canonic, despite the fact that in those days there were all kinds of prophecies and visions throughout Asia Minor and the Holy Land. Some were buried and forgotten, but Revelations lived on.

Indeed, an alternative interpretation of “apocalypse” begins with its ancient Greek meaning: to reveal something that’s hidden, to uncover, to unveil. The etymology of “apocalypse” – the Greek word is ἀποκάλυψις – comes from ἀποκαλύπτω (apokalúptō, “I disclose, reveal”), from ἀπό (apó, “from”) and καλύπτω (kalúptō, “I cover”). As such, apocalypse can serve as a neutral term that opens up other applications to modern life, more constructive ones that belie the fiery destruction of the Armageddon motif.

Let us ponder that kind of Apocalypse, a “great unveiling” that shows us another way of organizing our lives together, not end times but new times, where we rededicate ourselves to doing what is right, as God gives us to understand the right.

Here are a few ideas about what that means to me. Continue reading

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Ready For Their Close-Up: Corporate Secretaries and “The Shape of Things to Come”

Part One of Three

The TakeAway: The recent annual conference of the Society of Corporate Secretaries and Governance Professionals focused on “The Shape of Things to Come”—that is, key issues and trends affecting corporate accountability and sustainable prosperity. In so doing, it provided further evidence of the importance of these underappreciated (and under-resourced) governance professionals, who are pivotal intermediaries in the restoration of trust in business enterprise and capital markets. Part One looks at how and why corporate secretaries matter. Part Two briefly summarizes what the conference covered. Part Three examines more closely the interrelated themes of psychology / behavioral science; education and learning; and moral reflection and judgment that undergirded conference proceedings—with ongoing implications for professional practice.

Okay, I know it’s vacation time, but here’s a pop quiz: Who’s the most underrated influence on promoting sustainable, accountable, and just business enterprise?

(A) Dissident shareholders;

(B) Prosecuting attorneys;

(C) Consumer activists;

(D) Jon Stewart and Stephen Colbert;

(E) Corporate secretaries;

(F) Whistleblowers.

If you picked (E), you get to ring the bell. (The others, of course, are influential too, but they get far more attention.)

Bell ringing is what the Society of Corporate Secretaries and Governance Professionals[1] did yesterday at Nasdaq, where Society President and CEO Ken Bertsch rang the closing bell. Nine days earlier, the Society wrapped up its hugely informative, entertaining, and cutting-edge national conference, the 66th in its history. More than 800 paid attendees, sponsors, speakers, and guests descended upon Washington, D.C. (the first time in that city) to learn from presenters and each other about how best to address “The Shape of Things to Come”. They tackled an eclectic array of governance matters likely to occur over the next five years, affecting public, private, and nonprofit organizations of all shapes and sizes.

Why does this matter? Because corporate secretaries now play a significant but vastly underappreciated role in promoting corporate responsibility, sustainability, and good governance. They’re the link among owners, boards, and management, between internal and external stakeholders. As such, they’re pivotal intermediaries in reconciling complex and sometimes competing claims, and operate within a highly volatile environment featuring heightened public expectations about the right thing to do.

This is a far cry from days of old (that is, ten years ago, pre-Sarbanes-Oxley), when the corporate secretary’s job was far less dynamic, dominated by record-keeping more than anything else, within an adversarial operating environment.

The job has come a long way since 2002, a transformation on vivid display July 11 – 14, through both formal conference proceedings and offsite meetings and exchanges. “It’s the biggest conference we’ve had in a long time,” said conference chair Doug Chia, Assistant General Counsel and Corporate Secretary at Johnson & Johnson. “We’ve managed to jam in a lot in just 2½ short days, with over 120 speakers.”

Jam in a lot, indeed. This Post, the first of three parts, touches upon key changes in the nature of the corporate secretary’s job. This is something CSR and sustainability professionals, mainstream media (both legacy and emerging), and the general public needs to understand.

Part Two summarizes briefly what the conference covered, in sessions devoted to key issues affecting shareholder engagement, board decision making, management operations, and professional skill building. Political and policy trends were on the agenda, too, including upcoming SEC rulemaking. (Ning Chiu of the law firm Davis Polk also provides an excellent overview.) Many of the sessions were recorded, presumably for access at some future point. Conference planners assembled an illustrious group: many were authors of recently published books on conference topics.

Part Three delves more deeply into three meta-themes I detected running throughout many of the presentations. They include the importance of psychological insights, educational pedagogy, and moral deliberation in making corporate enterprise more accountable and productive.

Chia, the planning committee, and the Society team received well-deserved praise for successfully organizing and running such a uniformly high-quality affair, which included separate tracks for spouses and families. While it was impossible to sample everything, they offered up tantalizing topics worth pursuing even after the proceedings ended.

Indeed, the Society might consider ways in which ongoing engagement and collaborative learning on conference topics might occur, offsite and online. That’s a juicy opportunity facing next year’s planners, chaired by Jim Brashear, Vice President, General Counsel, and Corporate Secretary at ZixCorp. The 2013 conference is slated for Seattle, from July 10 – 13.

“There are so many conference experiences you can have within this one conference. That’s what we intended to create from the beginning,” Chia said.

Nota bene: an overview of conference-related Tweets with the hashtag #Society12 can be seen at the Storify page curated by Fay Feeney, Founder and CEO of Risk4Good and a “digital whisperer” to boot. Continue reading

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Diamonds and Rust: The Need for Ethical Climate Change in Banking

The takeaway: The British  scandal over interest-rate rigging underscores the need for ethical climate change in banking. In addition to regulatory and policy changes, doing this involves the combined efforts of CEOs, boards of directors, investors, depositors, and other stakeholders to make banking better. To start, it means understanding and enhancing the moral shadow cast by every institutional and individual action. It also means cultivating a moral compass, along with a code of conduct or banker’s oath, so that principled business leadership and a fiduciary ethic can be revived. But this won’t work unless there’s also a firm commitment to embed ethical principles and sustainability commitments throughout the value chain.

The challenge to CEOs and governing boards is to foster a better climate in which the ethical beliefs and values of the firm can be embedded in business operations, relationships, and all forms of accountability. The challenge for rest of us – investors, depositors, employees, intermediaries, policymakers, regulators, the media and educational institutions – is to demand and enact a better climate in which the ethical beliefs and values of CEOs, governing boards, and capital investors can flourish.

“I’ve always tried to live my life by a moral code and things that I thought were right. And when I’ve been involved with institutions that I’ve been responsible for, I’ve tried to bring those standards of conduct into those organizations, and insist that those organizations live by that same kind of moral or ethical code…and that it conduct its business in a highly professional, responsible, ethical way.  I stressed that at Goldman Sachs in everything we did, and ultimately developed what we called Our Business Principles. It was a written statement of the special features of what we felt Goldman Sachs stood for, and there were fourteen of them. ‘The clients’ interests always come first, and if we serve our clients well, our success will follow.’ That was one of the principles. That was the kind of thing we talked about.”
John Whitehead, former Chairman of Goldman Sachs, author of Goldman’sBusiness Principles”, Interview with Marcy Murninghan, 1997

We need more John Whiteheads. Desperately.

We also need more ethical, engaged, and diligent boards, and investors that recognize their fiduciary obligation does not mean favoring short-term profits at the expense of other values, including longer-term sustainable prosperity.

At a bigger level, we need more conscientious capital markets, which recognize that the purpose of finance is to serve society, not screw it.

All of these come to mind as we witness yet another banking scandal, the latest in what feels like a conveyor belt of bad behavior where money, power, and politics are involved. Continue reading

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