•  
  •  
 

Abstract

On matters of governance, the people’s good is the highest law, as Cicero said two millennia ago. Unfortunately, these days personal greed has trumped the people’s good, enflaming the current governance crisis affecting our public, nonprofit, and private spheres. The spate of corporate governance scandals over the past several years jeopardizes equity investments, harms beneficiaries, and weakens global capital markets. The remedy is not just more laws and regulation but revitalization of the system of corporate checks and balances that already exists. To get better corporate governance, corporate shareowners, especially institutional investors, need to assert their rights and responsibilities more forcefully and wisely. Doing this involves better fiduciary leadership and governance, with the establishment of a fiduciary creed. This creed sets forth ethical stewardship beliefs, principles, and standards, thus enabling sound procedures and competence for discharging the fiduciary role. It does so in a manner that serves beneficiaries by balancing long-term financial prosperity with institutional mission and the public interest, rightly understood. Improving the governance and operation of institutional investors through better integration of their ideals and principles into their investment policies, along with greater levels of participation, representation, and accountability — exemplified by The Boston Foundation and recently proposed legislation affecting the $28 billion Massachusetts state pension funds — will put wasted assets to work, deter future abuse, and restore integrity and trust in equity culture. The author calls this “civic stewardship.”

Share

COinS
 
 

To view the content in your browser, please download Adobe Reader or, alternately,
you may Download the file to your hard drive.

NOTE: The latest versions of Adobe Reader do not support viewing PDF files within Firefox on Mac OS and if you are using a modern (Intel) Mac, there is no official plugin for viewing PDF files within the browser window.