The thought leader and author George Kinder has inspired me to join a group
Before you go any further, be aware that this blog post is not on my usual topic (getting to and enjoying a happy retirement) but instead is about a notion of deep personal interest. And after I’ve explained it, you can contribute enormously by sending me your reaction, which I’d appreciate greatly. OK? Let’s go.
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Have you come across the word “fiduciary”? It means, essentially, someone who acts (usually in a financial capacity) for someone else, with the requirement that the fiduciary must act in the best interests of the client, not for their own self-interest. It comes from the Latin word “fides,” meaning faith or trust. So it gives you confidence, knowing you’re placed first. It’s a concept that I lived by during my career as a pension fund investment consultant, initially because it seemed the right thing to do, and particularly consciously after it was enshrined in the US Employee Retirement Income Security Act (ERISA, as it’s commonly called) in 1974.
Have you come across the thought leader and author George Kinder? I first did when I read his book The Seven Stages of Money Maturity many years ago. I have quoted from it many times (for example, in The Retirement Plan Solution and in Life Two), and over the years I have come to admire George greatly. So it was a surprise, an honor and a privilege when, after I read his most recent book The Three Domains of Freedom, I was contacted by George and he told me about an idea he had developed (more on this in a moment). I was thrilled to join a support group for the idea, and the group now meets online once a month. I have come to see George as a gentle man and a gentleman, not just a thought leader. And this blog post is about his idea.
It’s a one-sentence legislative proposal. It reads as follows:
“A Fiduciary standard of obligation is required for all institutions (corporate, non-profit, and governmental), to place the interests of all stakeholders, of humanity, democracy, and the living planet that sustains us, first above their own self-interest.”
To which he adds the simple declaration: “I support making FIDUCIARY IN ALL THINGS the law of the land.”
After much reflection – FIAT, to give it its quick name, is a magnificent ideal, but what are the chances of getting it enacted anywhere, let alone around the globe? – I agreed to join a support group, that has now become the FIAT Steering Committee.
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I asked friends what they thought about the concept. They came back with variations on the same two notions that struck me initially. One (expressed almost with a sense of relief) is that it would make the world a much better place, if the FIAT concept were to take hold. The other reflects deep cynicism, that many organizations and people are self-serving and virtue-signaling rather than behaving as fiduciaries, so: no chance.
I joined George’s Steering Committee anyway. This is how all ideas start: as visions and aspirations. They need to be discussed widely, so that they can generate support. Eventually some practical version of the vision might come to be accepted. And the FIAT idea is expressed in such a positive way, not just advocating the absence of negative feelings and actions: inspiring, rather than limiting.
I don’t know how George finds people, but the Steering Committee is a terrific group, with many different backgrounds that add to our discussions, because we’re coming at the same themes from different perspectives. There are about 30 of us in all. And the first couple of Zoom meetings (all meetings last one hour) got me excited to encounter wider perspectives than just my own. So when George asked for volunteers to take the discussions and construct from them a set of Mission, Vision and Purpose statements, I was one of four given that initial task.
I was pleasantly surprised that we actually managed to come up with an initial draft, since we weren’t exactly shy about expressing our views. I think that just shows the power of the FIAT notion. And when our draft was set before the Steering Committee, it met with basic approval, and was improved by further suggestions. Here’s what the current version looks like.
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I’ll start with the Vision, the aspiration:
“We envision a world where every institution operates with an unwavering commitment to fiduciary responsibility in all things. In this world, all branches of authority act in service of human flourishing, freedom and the sustainability of our environment. By transforming the social contract between institutions and society, we strive to create a future where trust, ethical leadership, and the best of humanity guide every decision and innovation.”
The Vision tells us where we want to get to.
What do you think? What positives would result, what negatives would be eliminated, if that vision were to be realized in practice? How would you change that statement?
Next, the Mission of the FIAT Steering Committee:
“The role of the FIAT Steering Committee is defining, analyzing, and providing the scope of what this FIAT concept can be. And being instrumental in the final planning, definition and execution of the mission, and in encouragements to actions coming from it.”
The Mission is more specific. It tells us what we want to do to get there. It’s the road map.
Again, what do you think? And are there any specific actions that you think will enhance it?
Finally, the Purpose statement explaining how we feel and why we want to get there:
“Advance the FIAT concept so that individuals and then leaders and then their organizations embrace it and spread the word, within their organizations and beyond. Then fiduciary responsibility becomes a standard toward ethical governance, equitable decision-making, and the product of our shared future.”
And again, what do you think?
As for me, I intend to share this notion with my friends, with fellow actuaries, and (if I can get introductions) with actuarial and pension-related organizations around the world. This blog post is my start.
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I hope that this excites you as much as it does me. And that you’ll let me know, either in the Comment box or via email, what you would endorse and what you would change.
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Takeaway
A new notion that I believe in expresses the hope that we can advance the world to one in which all branches of authority act with an unwavering commitment to fiduciary responsibility in all things, so that trust, ethical leadership, and the best of humanity guide every decision and innovation.
8 Comments
I have written about retirement planning before and some of that material also relates to topics or issues that are being discussed here. Where relevant I draw on material from three sources: The Retirement Plan Solution (co-authored with Bob Collie and Matt Smith, published by John Wiley & Sons, Inc., 2009), my foreword to Someday Rich (by Timothy Noonan and Matt Smith, also published by Wiley, 2012), and my occasional column The Art of Investment in the FT Money supplement of The Financial Times, published in the UK. I am grateful to the other authors and to The Financial Times for permission to use the material here.
Hi Don, you have written a wonderful summary of an important idea and initiative. I do find it interesting, in the Purpose description, that the group has identified a bottom up approach – ” Advance the FIAT concept so that individuals and then leaders and then their organizations embrace it and spread the word, within their organizations and beyond.” Rather than top down (start with leaders). Any perspective on why would be interesting. Best wishes, David.
Thanks, David. You’re quite right, in an organization the concept will spread top-down, from the leader. That makes it important to get to leaders, either directly, one-on-one (or, for example, through George’s book The Three Domains of Freedom), or via an intermediary, who is the individual referred to. I don’t think we had it in mind that we needed to identify top-down and bottom-up as alternative approaches and pick one to the exclusion of the other. I’m sorry that our wording (which was what we came up with in a limited time) caused confusion.
Don, this action is necessary. While few of us are able to live our lives fully in line with our values, constructive aspirational values are essential in our personal and social lives, including our financial lives – personally and collectively.
My own conviction is that stewardship and the social contract are imperative for a sustainable existence.
I hope your group, through its influence, will spread its message far and wide and that its message will serve as a benchmark to which we all aspire.
Thanks, Ted. I hope you will spread the message too.
Making FIDUCIARY IN ALL THINGS the law of the land is a brilliant concept, and one that the world desperately needs at this moment in time. It’s a simple idea, with profound possibilities. At first pass, I can add nothing to the vision and mission as beautifully outlined by the Steering Committee. As I think about it more fully, I will reach out again if I feel I can add any thoughts/ideas that could further enhance what has already been accomplished here.
Thanks, much appreciated. Looking forward to further insights.
Don –
I read this post with great interest. It reminded me of a presentation at a CFA conference long ago, and a book named: The Management of American Indian Investment Decisions (Donald B. Trone). I picked up the book and found it to be a great guide on what constitutes fiduciary management. It melds indigenous wisdom with characteristics of great fiduciaries. A verbal comment that I remembered is that native Americans consider the impact of their decisions on multiple future generations.
What I read in the book is consistent with the Vision that you describe. I am happy to send the book to you if you are interested.
Karin Brodbeck
Thanks, Karin. I’ll get the book and learn from its wisdom.