Feature
Howard Taft (27th President) and author of the book,
Stewardship – a must read, by the way. John and I have
had a number of intellectual discussions about leadership
and stewardship, specifically how the terms impact our
understanding of a fiduciary standard of care.
It was during one of these discussions that John talked
about the “merely fiduciary” standard of care. The
first time I heard him make the reference I remember
chuckling – it was like someone saying that Peyton
Manning is merely a quarterback. However, after
consideration I began to see his point. The role of
regulators is to define the minimum standard of care a
trustee or plan sponsor must meet in order to manage a
qualified retirement plan. It is not the role of regulators
to define the gold-standard, merely what is acceptable.
To begin, let me offer my definition for each of the
five terms:
Stewardship is the passion and discipline to protect the
long-term interests of others – it is what you are willing
to go to the mat for. My favorite quote to illustrate this
point is from Ken Melrose:
What does the organization, my stakeholders, need
me to be today: a coach, a teacher, a decision-maker,
a supporter, a listener, a pilgrim, a servant, someone
who makes waves?
Loyalty is to be faithful and steadfast to principles
and commitments.
Leadership is the ability to inspire and the capacity to
serve, others. I credit my coach, Lance Secretan, with
introducing me to the concept that leadership is the ability
to inspire others. Lance talks about the importance of
understanding the differences between inspiration and
motivation. Inspiration is a positive source of energy;
motivation is almost always negative. This is certainly
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true when we talk about a fiduciary standard of care – it
is negative motivation which is laced with responsibility,
liability and risk.
Governance is communicating and exercising your
policies and procedures – what one must do be in
compliance. I define Governance as:
Doing the right thing, with the right people;
At the right time, at the right place;
With the right resources, with the right processes;
For the right intentions, and for the right reasons.
Trust is defined as the alignment of principles with
policies and procedures which, in turn, nurtures reliability
and builds confidence. Stephen M.R. Covey, the author
of The Speed of Trust and the son of Stephen R. Covey
who is credited with writing 7 Habits of Highly Effective
People, defines trust as a new currency:
The ability to establish, grow, extend, and restore trust
with all stakeholders - customers, business partners,
investors, and coworkers - is the key leadership
competency of the new global economy.
With each term now defined, how would you complete
the hierarchy? This is my answer: