What effective stewardship means to consultant Charles Wookey, co-founder of Blueprint for A Better Business, and chief executive of Charles Wookey Associates, is “to responsibly manage assets and resources not only for the short-term good but also for a sustainable future”.
Wookey believes that “effective stewardship involves understanding companies’ purposes, thinking of the bigger picture of why they exist and their broader impact.”
This raises questions among clients and advisers alike of “do companies exist simply to make a profit?", Wookey says.
Or, in order to serve and better society, are companies "contributing something new and beneficial to environment, to people, to communities, so that they might flourish?"
For him and others, therefore, stewardship involves considering environmental, social and governance factors alongside financial return.
Many people from various generations desire to do something positive for society beyond their own personal lives and family, but do not know how.
Advisers have the opportunity to help clients and companies, together, to change the face of communities, society, our climate and the wider world.
This can be done in a number of ways, and includes investing in ethical solutions to existing problems, thereby alleviating poverty, preventing climate change, improving education, and social justice.
By doing this, by helping clients and companies work together in such a way, advisers are participating in a movement of stewardship that can have great results, for those near and far, shaping and changing the way the world works.
Definitions and interpretations
The United Nation’s Principles of Responsible Investment relates stewardship as “investors using their influence over current or potential investees / issuers, policy makers, service providers and other stakeholders – often collaboratively – to maximise overall long term value.
"This includes the value of the common economic social and environmental assets, on which returns and clients’ and beneficiaries’ interests depend.”
Finyin Inuayo is investment manager at Stewardship, which supports people in their philanthropic desires.
He explains: “While the PRI definition refers only to institutional investors, in many ways we are all stewards of financial resources with every individual having the opportunity to steward these resources in accordance with their values and ambitions (social, environmental, and financial).
"This includes considering how we invest, where we spend our money, who we bank with and so on.”
Wookey goes further in describing the true nature, and power of effective stewardship.
He believes, that as well as the fiduciary aspect of good investment and financial management - managing risk and return - there is a lot of scope to shape, influence and effect positive change that goes way beyond financial return.
According to Wookey, by pursuing a wider purpose beyond profit, and by being well run, businesses will not only ensure good financial returns for their investors and stakeholders, but will have greater sustainability.
This is not only for themselves, but collectively with other organisations and individuals.
