Initiative for Fiduciary Responsibility
    A Project of The Global Academy

Initiative for Fiduciary Responsibility

Overview    IFR 2004   

Bottom Line Conference     Topics, Advisors and Speakers 

New Directions In Fiduciary Responsibility

Overview

The Global Academy developed the Initiative for Fiduciary Responsibility to facilitate the evolution and implementation of an expanded concept of fiduciary responsibility in the interest of both institutional investors and society as a whole. This initiative was inspired by a very successful conference we developed entitled “Bottom Line: the Future of Fiduciary Responsibility.”

The Global Academy recognizes that institutional investors, by virtue of the scale of their collective investments, have enormous influence over financial markets and the global economy as a whole. In 1999 United States public pension funds alone had assets representing 46 percent of the gross domestic product and 33 percent of the New York Stock Exchange’s capitalization. Additional holdings by religious, educational and public institutions, unions and foundations further increase these numbers. 

As a result, these institutions’ financial decisions have a huge impact on society. The collective power of these institutions could reorient companies and economies around the world to secure the short and long term interests of beneficiaries, and other shareholders and stakeholders alike.

The realities of the 21^st century require fiduciaries to be concerned with the impact of financial, social and environmental factors on the performance of investments to fulfill their legal obligations and maximize shareholder value.  In addition, as owners, fiduciaries have the duty and the opportunity to promote good corporate governance to protect the assets under their care.

The Global Academy asserts that the integration of prudent financial management practices with principles of environmental stewardship, concern for community, labor and human rights, and corporate accountability to shareholders and stakeholders – which until recently have not been considered relevant to the financial decision-making process – constitute in fact a single bottom line. In order to guarantee long term sustainability, to minimize long and short term financial risk, and to identify investment opportunities, and thereby increase shareholder value, the definition of fiduciary responsibility has to evolve.

IFR 2004

GA’s involvement in fiduciary responsibility is currently in a research phase. As we move forward, our work will continue with the research of socially responsible investing and its impact on the evolution of the planetary economy. We are also developing a curriculum with Sustainable Ventures, a not-for-profit advisory and education organization in Berkeley, California, which will serve as an education and empowerment tool for those interested in responsible investing.

In addition, Global Academy Chairman Walter Link continues his involvement with Investors' Circle, a leading social venture capital intermediary whose mission is to support early-stage, private companies that drive the transition to a sustainable economy. The group’s members include a dedicated circle of investors (individual and institutional) who invest in and support social mission entrepreneurs.

(top)

Bottom Line Conference

The inspiration to create the IFR arose from a groundbreaking conference convened by Progressive Asset Management and the Global Academy in April 2001 in San Francisco, entitled Bottom Line 2001:  The Future of Fiduciary Responsibility. The conference brought together nearly 200 trustees and advisers representing a broad spectrum of institutions with more than one trillion dollars in assets to discuss new concerns relevant to investment decisions. The gathering provoked intense interest among different institutional sectors, especially as a convergence emerged between prudent investment, fiduciary responsibility, corporate governance, and social/ environmental issues.

Conference speakers included The Honorable Philip Angelides, California’s State Treasurer; The Honorable Jim Hill, former Oregon State Treasurer; Dr. William Crist, president of CalPERS pension fund; Art Pulaski, Executive Secretary and Treasurer of the California Labor Federation; leading securities lawyer William Lerach, senior partner of Milberg Weiss Bershad Hynes & Lerach; key author and corporate governance activist Robert Monks, founder of Institutional Shareholder Services Inc. (ISS) and Ronald Reagan’s appointee as former head of the Federal Employees’ Retirement System; Hunter  Lovins, co-founder of the world-renowned Rocky Mountains Institute and co-author of Natural Capitalism; Professors James Hawley and Andrew Williams, authors of The Rise of Fiduciary Capitalism, and others. Many of them have been consulted in the process of developing the concept of the IFR, and have urged us to pursue this idea.

The conference’s programming and convening received important support from three Advisory Committees representing Public Pension & Labor Funds, Faith Based Organizations and Foundations & Endowments, which included recognized leaders from each sector.  Please see Appendix II for further details about the advisors, speakers, and some of the contents of the program.

After carefully assessing the enthusiastic feedback from the conference and after much additional input and consultations with leaders in all relevant sectors, three of the conferences’ main organizers, Stephen Viederman, Eric Leenson and Walter Link decided to co-found IFR, the Initiative for Fiduciary Responsibility, in conjunction with the Global Academy, an action and networking oriented advisory and educational non-profit organization with headquarters in Florida.  A council is in formation that includes Robert A.G. Monks, Tessa Hebb, James Hawley, Don Trone, Vidette Bullock Mixon, Paul M. Neuhauser, and Andrew Williams. For biographies of these individuals see Biographies.
(top)

IFR Council Biographies

Vidette Bullock Mixon is the Director of Corporate Relations and Social Concerns for the General Board of Pension and Health Benefits of The United Methodist Church. The General Board is the 83rd largest pension fund in America. Over 70,000 active and retired pension plan participants entrust the General Board with their pension funds. She oversees the research and monitoring of corporate policies and practices to ensure adherence to the General Board’s socially responsible investment program, monitors proxy voting, files shareholder resolutions and communicates with corporate management on issues of corporate governance and social importance. Information about the General Board’s socially responsible investment program can be found on the organization’s web site www.gbophb.org. Under her twelve years of leadership, the General Board has consistently been in the vanguard of corporate engagement on global standards and has challenged multinational corporations like Nike, Disney, McDonalds and Wal-Mart to be more open and transparent about their employment practices. In response to these shareholder actions a number of companies now publicly disclose more information about corporate environmental and social compliance. The General Board is also among a few institutional pension funds that publicly disclose their record of proxy voting on its web site. Ms. Bullock Mixon has been quoted in a number of publications including Crain’s Chicago Business, Plan Sponsor Magazine, The Washington Post and The Wall Street Journal.

James Hawley is the Transamerica Professor of Business Policy and Strategy in the Graduate Business Programs, School of Economics and Business Administration, at Saint Mary’s College of California.  He received his B.A. from the University of California, Berkeley, and Ph.D. from McGill University in Montreal, Canada.  He is the author of two books, the first on international banks and the global monetary system, and the most recent on U.S. pension funds and the ownership of U.S. corporations, titled, Fiduciary Capitalism: How Institutional Investors can make Corporations more Democratic, published by the University of Pennsylvania Press.  He is the author of over 15 articles on a variety of topics, including corporate governance, the international monetary and financial system and environmental issues, in addition to numerous papers and reports.  Prior to teaching at Saint Mary’s, he worked at Wells Fargo Bank as a country risk analyst, and previously taught at the University of California, Davis. 

Tessa Hebb was Co-Chair of the Research Task Force for the Heartland Labor Capital Project.  She was a Visiting Scholar at Carleton University, Ottawa, Canada, where she developed a national Pension Fund Trustee Education Program.  She has an extensive background in public policy research.  As an independent economic consultant, Ms. Hebb works with trade unions in Canada and the United States with a particular focus on investment and pension funds.  She obtained her M.A. in Public Administration, specializing in International Finance, from Harvard University in Cambridge, Massachusetts.  Recent publications include Just Making Change, a collection of essays on Canada’s financial sector (The Golden Dog Press, 1999).  She co-edited Working Capital: The Power of Labor’s Pensions (Cornell University Press, 2001). 

Eric Leenson* is a co-founder, the President and CEO of Progressive Asset Management, Inc. (PAM), the nation’s first full service broker dealer to specialize in socially responsible investing (SRI). Since it’s founding in 1987 PAM has been an innovative leader in the field of SRI, launching new products and services in the areas of environmental sustainability, shareholder advocacy, and community investing. At present the PAM Network of registered representatives has offices in 14 states around the U.S. 

He co-founded The Forum on Business and Social Responsibility of the Americas, an umbrella organization that brings together business organizations with similar interests from throughout the hemisphere. Participating groups currently exist in Brazil, Chile, Colombia, El Salvador, Mexico, Panama, and Peru and in other nations. Eric recently addressed the annual conference of Instituto Ethos in Brazil on new developments in the field of fiduciary responsibility. More than 900 leading business people attended the gathering. 

Walter Link* chairs the Global Academy (www.theglobalacademy.org) of which IFR is a project. Walter was a longtime partner in the European-Asian Industrial Group B.Grimm, which had joint-ventures and partnerships with major European and American  companies such as Carrier, Siemens and Merck. He now chairs the Link Investment Group and devotes most of his time to non-profit work. 

Mr. Link is a pioneer in the international Corporate Social and Environmental Responsibility (CSR) movement. Together with Eric Leenson, he is a co-founder of The Forum on Business and Social Responsibility of the Americas (www.empresa.org). He was a co-founder and board chair of the European branch of the Social Venture Network (SVN), which birthed Business for Social Responsibility and the Investors’ Circle, of which Walter is a member.  He is also a co-founder of the Institute for Social and Ethical Accountability that develops CSR accounting methods. Together with Hunter Lovins, Walter is the co-founder of the Natural Capitalism Group and co-author of the upcoming book, Human Dimensions of Natural Capitalism, which will further explore how economies and companies in our present capitalist systems can be made more sustainable while increasing profits and market share. Together these networks and organizations continue to have an important impact on bringing CSR from the fringe of public attention into the mainstream economy.

Robert Monks is the publisher of http://www.ragm.com, which is focused on the assembly and dissemination of information and opinion about global issues of corporate energies with the long-term interests of Global society.  Mr. Monks was the founder of Institutional Shareholder Services, Inc., and served as its president from 1985 to 1990.  He founded the investment fund known as LENS, which since 1992 has developed the “institutional activist” mode of investment. 

He is a graduate of Harvard College, Cambridge University and Harvard Law School.  He was a partner in a Boston law firm and served as vice president of Gardner Associates, an investment management company.  He was president and chief executive officer of C.H. Sprague & Son Company, a coal and oil concern and served as a board member and chairman of the Board of The Boston Safe Deposit & Trust Company.  He served as director of the United States Synthetic Fuels Corporation through appointment by President Reagan who also appointed him one of the founding Trustees of the Federal Employees’ Retirement System.  He served in the Department of Labor as Administrator of the Office of Pension and Welfare Benefit Programs having jurisdiction over the entire U.S. pension system. 

Mr. Monks wrote The Emperor’s Nightingale: Restoring the Integrity of the Corporation in the Age of Shareholder Activism (Capstone Publishing, 1998) and The New Global Investors: How Shareowners can Unlock Sustainable Prosperity Worldwide (Capstone Publishing, 2001). 

Don Trone is the president of the Foundation for Fiduciary Studies, the mission of which is to develop and advance fiduciary standards of care for trustees, investment committees and advisors. In addition, Don is the founder and Director of the Center for Fiduciary Studies, which operates in association with the University of Pittsburgh’s Katz Graduate School of Business. The Center is the first full-time training facility devoted to the subject of portfolio management and investment fiduciary standards of care. Don is also the CEO of investmgt which is an Internet company that develops web-based tools to support the decision making process of investment fiduciaries. Don is co-author of two industry bestsellers, Procedural Prudence and The Management of Investment Decisions (McGraw-Hill Publishing). He serves on GE’s Advisory Council for the Center for Financial Learning; on the Board of Directors for SRIWorld.com; and is the past Vice-Chairman of the U.S. Coast Guard Academy Alumni Association. Don graduated as president of his class from the United States Coast Guard Academy, and with honors from the US Naval Flight Training Program in Pensacola, Fl. He served on active duty for ten years as a long-range search and rescue helicopter pilot. Don received his Master’s degree in Financial Services from the American College, and is a Diaconate candidate at the Pittsburgh Theological Seminary.

Stephen Viederman* is the former president of the Jessie Smith Noyes Foundation, from which he retired in April 2000. During his tenure the Foundation became a leader in mission-related investing, an effort to reduce the dissonance between the foundation’s investments and its grant-making values through portfolio screening, shareholder activity, and mission-related venture capital investing. This effort was widely recognized by the national press, including the New York Times, a variety of finance and business journals, as well as the philanthropic press. In 1996 he co-founded the Foundation Partnership on Corporate Responsibility.  He has also lectured extensively on these issues in North America, Europe and Asia. 

Mr. Viederman continues his involvement as a member of the board and finance committee of the Needmor Fund, the Council for Responsible Public Investment, the advisory committees of Innovest Strategic Value Advisers, SustainAbility (UK), the Aurora Institute (Canada), and the Hawaii Capital Stewardship Initiative, and through consulting. 

Andrew Williams is a faculty member in the School of Economics and Business Administration at St. Mary’s College of California where he teaches economics to M.B.A. candidates.  He holds a Ph.D. from Stanford University and has published extensively in the area of corporate governance with an emphasis on institutional investor activism.  Along with Professor James Hawley he was consulted on corporate governance topics for the Organization for Economic Cooperation and Development, co-authored a number of papers and written a book titled The Rise of Fiduciary Capitalism (University of Pennsylvania Press, 2000). 

Global Academy IFR is a project of the Global Academy (www.theglobalacademy.org). The Global Academy and its partners seek to develop and facilitate the mainstream implementation of pragmatic models for sustainable societal change in the fields of business, investment and economics, globalization and leadership, genetic technology, medicine, and education. Tom Valente, president of the Global Academy, has an extensive track record in creating innovative educational and advisory programs. As a co-founder and principal for over 25 years he helped build the Omega Institute from a start-up non-profit organization into a $ 15 million educational institution that became a leader in its field.

* Eric Leenson, Walter Link, and Stephen Viederman are co-founders of the Initiative for Fiduciary Responsibility.

 (top)

BOTTOM LINE 2001 Conference

Partial List of Topics:

      Corporate Governance Initiatives and Relevant Legal Issues
Investment Strategies to Bridge Performance and Sustainability
Screening Techniques to Enhance Returns
US and European Pension Fund Legislation
Economically Targeted and Alternative Investments
Proxies as Assets
Community Investing

Advisory Committees:

Public Pension & Labor Funds:

     Mr. Carlos Gonzalez, Trustee, San Diego County Employees’ Retirement System
     Mr. Marvin Hrubes, International Vice President, United Food & Commercial Workers International Union
     Mr. James Lee, Trustee, Contra Costa County Employees’ Retirement Association
     Mr. Michael Musuraca, Assistant Director-Dept. Res. & Neg., New York City Employees’ Retirement System
     Ms. Shelley Ilene Smith, Vice-Chair, Los Angeles City Retirement Association
     Mr. Sean Webb, Trustee, Marin County Employees’ Retirement Association
     Honorable Donald White, County Treasurer, Alameda Employees’ Retirement Association

Religious Organizations:

     Mrs. Vidette Bullock Mixon, Director Corp. Concerns, United Methodist Church Board of Pension & Health Benefits
     Mr. Frank Coleman, Vice President – SRI, Christian Brothers Investment Services
     Rabbi Stacey Offner, Board Member - Chair for the Committee on SRI, Reform Pension Board
     Ms. Lindsey Parsons, Board Member and Consultant to Economic Justice Loan Committee, National Episcopal Church
     Mr. Timothy H. Smith, Past Executive Director, Interfaith Center of Corporate Research
     Sister Susan Vickers, Director-Corporate Social Responsibility, Catholic Healthcare West

Foundations & Endowments:

     Mr. Steve Fahrer, Chair, Grassroots International Foundation
     Ms. Linda Kimball, Director – Investment Responsibility, Stanford Management Company
     Mr. James Pitts, Vice President of Finance, The Boston Foundation
     Mr. Luther Ragin, Vice President Social Investments, F. B. Heron Foundation
     Mr. Steve Viederman, Past President, Jessie Smith Noyes Foundation

 BOTTOM LINE 2001
 Partial List of Speakers:

      The Honorable Philip Angelides, California State Treasurer   
Dr. William Dale Crist, President, California Public Employees’ Retirement System
The Honorable Jim Hill, Former Oregon State Treasurer
Mr. William Lerach, Managing Partner, Milberg Weiss Bershad Hynes & Lerach
Ms. Hunter Lovins, Co-Author, Natural Capitalism
Mr. Robert Monks, Founder, LENS Investment Management
Mr. Art Pulaski, Executive Secretary, California Labor Federation
Ms. Shelley Ilene Smith, Vice Chair, LACERA, Chair, LA City Defined Contrib. Plan
Professors James Hawley & Andrew Williams, Co-Authors  The Rise of Fiduciary Capitalism

These names refer to the historic record of the Bottom Line 2001 Conference.  Their listing here does not imply a connection with the Initiative for Fiduciary Responsibility.

 (top)