Wednesday, July 10, 2013

Organized for Stewardship

As a participant in the Network for Sustainable Financial Markets, I have come to know (digitally) Mark van Clief.  Mark has developed a theory of systems thinking and complexity through which he has identified 7 Levels of Capacity for systems thinking within the general population.  I have transformed these levels into Zones of Caring within Domains of Choice and Action, to construct the attached idea map on Organized for Stewardship.

If you think about a pension fund within this construct and consider one that is built on MPT (Modern Portfolio Theory) as its portfolio design paradigm, I think you will find an organization that will struggle with the challenges of Staff Empowerment in a world that is dominated by Exchange-trading of financial assets. It will be an ontologically passive and reactive organization, and a reluctant non-participant in ESG, Climate Choice, Financial System Reform, etc. It will also, in all likelihood, continue to struggle with the underfunding of its pension liabilities because of erratic and inadequate portfolio returns, weighed down by excessive fees to outside managers that it really cannot control.

Now imagine that same pension fund, organized in this way, but building its portfolio on EPE  (Evergreen Private Equity) instead of MPT. There, you will find Staff Empowerment becoming a rich field for engagement in developing a new story of place as "the planet is our place", a new sense of purpose as ownership of both the intended and incidental impacts of our choices on the planet as our place, and a new experience of connectivity with the planet as our place, through digital media. This is Regenerative Capitalism. This is empowered and proactive stewardship. This is the path to real, meaningful reform of the financial system and the economy to support a truly sustainable prosperity of living well within planetary limits.

You will also see a pension fund that effectively and efficiently generates earnings through investment that properly match fiduciary returns to its fiduciary responsibilities in a perpetual present, while simultaneously sustaining its corpus of entrusted funds for successive generations of current and future retirees, in perpetuity.

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