Photo by: Damian Navas
Fiduciary…What?
Most of you have probably heard the word, Fiduciary…Maybe on multiple occasions. What does it mean? Google the word and here’s one of the first definitions to appear:
A fiduciary is a person who holds a legal or ethical relationship of trust with one or more other parties. Typically, a fiduciary prudently takes care of money or other assets for another person. Close to that definition is a sentence using the word: The company has a fiduciary duty to shareholders.
I think those sentences set forth what I used to think and probably what most people think when it comes to the word Fiduciary.
But, I’d like to dig a little deeper.
If a fiduciary is a person in a position of trust, what are “we” trusting to the fiduciary’s care?
Is it just money? I don’t think so…
One take is what is referred to as The Triple Bottom Line (TBL)…Profit, people, planet. OK. That is one way to broaden the definition of fiduciary. Are we addressing all three?
Another way, I believe, to address the definition, is to ask the following question:
If you are a business owner,
what is entrusted to you?
And “the what” includes “the who.”
Let’s start the list…Employees, vendors, customers, the business plan, your community, the greater good, your vision for the future. That’s just a start. If you’re a family business, aren’t you entrusted with the history of the family and the business?
Do you have a responsibility to
steward the story?
Do you have a fiduciary role
vis-à-vis future generations?
So, when someone says, If the number is big enough we have to take the offer (to buy the company) to the shareholders, are they considering the parts of their fiduciary duty that extend beyond “the money?”
What might be lost if you only consider
the financial aspects of such an offer?
I recently read a book I’d highly recommend by Simon Sinek, entitled, “The Infinite Game.” As we consider this word fiduciary, I thought some of the statements were timely. I’ll leave it to you to read the book, but here are a few:
A bit of food for thought as 2020 unfolds…Might a new definition of fiduciary move “your vision” closer to 20/20?