Stephen B. Young
Global Executive Director
Stewardship Capital refers to the habits and dispositions necessary for a sustainable, responsible capitalism to thrive. Stewardship capacity is required for individual decision-making, for management of the business entity, and for the proper use of government authority and civil society organizations.
Stewardship Capital properly speaking refers to durable and reliable habits and dispositions of an individual, capacities and durable orientations of the business entity and values and dispositions of the society and culture at large.
Capital refers to an asset, a stock of that which can be consumed for the enhancement of value. As an asset capital can also be produced and accumulated for future use. In a simple sense, capital is a form of savings, a disposition not to fully consume or exhaust some capacity or resource in the present moment, but to save some of it for future use.
In a simple way, capital is “seed corn” that which contains within it the potential for the next harvest. Capital earns a return because it supports value-creation and can claim a share of that new wealth as its due. The returns to Stewardship Capital are increases in levels of trust and integrity, higher levels of investment of other forms of capital, in particular financial investment and commitment of personal energies and loyalty, and more sustainable collaboration and cooperation, longer time-horizons, better interpersonal relationships, more wealth and happiness.
We refer in various contexts to financial capital, physical capital, reputational capital, intellectual capital, human capital, and social capital. The brand equity or goodwill associated with a business is considered a form of economic capital as well, at times to be assessed and recorded on the balance sheet of the business.
Stewardship Capital consists of those assets, reserves, capabilities, dispositions, habits and orientations which secure good stewardship in decision-making and management.
At the level of the individual, Stewardship Capital resembles a set of virtues that guide conduct. At the level of the enterprise, civil society organization, or government office, Stewardship Capital is the systematic deployment of similar virtues. And, at the level of culture and society, Stewardship Capital is the collective capacity to empower individuals with Stewardship virtues and to promote and reward organizations that form and use Stewardship habits and dispositions.
The root orientation of all forms of Stewardship Capital is towards others as a goal of human action. The steward is the good shepherd of Judeo-Christian Biblical metaphor and the Khalifa of Qur’anic guidance. It is also the virtue of the Confucian Jun Xi, or “lordly one”, and it is the capacity of the Buddhist Bodhisattva to act as a refuge for those in need. Jim Collin’s description of “Level 5” leadership comes to mind as a description of people with high levels of Stewardship Capital. “Servant Leadership” is Stewardship Capital in executives with the purpose of mobilizing similar dispositions in employees.
The steward is the fiduciary and must be capable of fiduciary standards of loyalty and due care of those who stand to benefit from responsible execution of powers held in trust.
Stewardship Capital and the Individual
Stewardship Capital combines both “heart” wisdom and “head” wisdom.
It requires both intellect used as common sense and prudential judgment and emotional instincts as well. Emotion instincts are needed to engage with others as well as to properly orient the self as a mature person able to avoid the pressures arising from afflicting sensibilities such as anger, envy, fear, greed, and misplaced ambition. Goldman’s concepts of emotional intelligence and social intelligence are apposite here, as well as Howard Gardner’s construct of “frames” of mind.
The Caux Round Table has developed a matrix of individual decision-making tendencies, the Ethical Leadership Profile, that is helpful in assessment of a person’s capacity for effective Stewardship.
Virtues pertaining to Stewardship Capital at the level of the individual are:
- inner, not other, directed
- discernment of self and others
- openness to emotion so that emotions do not lose their proper proportion in our motivations
- common sense
- sense of time
- restraint and forbearance; humble and modest
- capacity to subsume the needs of self to the duties of a position without losing a strong sense of self
- sense of vocation where service is an extension of the self
- no need for dysfunctional dependencies to enhance self-worth such as power, money, abusive relationships, stimulants, depressants
Above all, Stewardship Capacity positions the person as trustworthy and reliable.
A second aspect of Stewardship Capital at the level of the individual looks to skills with which to engage others. A summary of such skills are:
- allocation responsibilities
- decisive when necessary
- well informed
- setting priorities
- distinguishing the important from the trivial
- adjusting arrangements and presentations to build trust and confidence
- transparency and good disclosure
- the keeping of confidences when necessary
Thus, at the level of the individual, Stewardship Capital results from socialization. It is not an inborn instinct, even though all persons have the mental and emotional capacity to accumulate such personal capital.
Stewardship Capital in the organization is largely a function of leadership. Chester Bernard’s description of how an executive must be the catalyst of the forces that make for cooperation and results presents a compelling case for Stewardship Capital. Ultimately, it rests on values being institutionalized in the organization.
First, there must be a set of stewardship values chosen and articulated.
Then, such values must be associated with decisions – the famous “waking of the talk”.
Third, such values must live in individuals at all levels of the organization. They must rise from the pages of written statements to become part of a living culture. An important function of leadership, then, is to speak to the values, apply them openly to circumstances, give shape and meaning to them through words that have emotional meaning.
Fourth, such values need to be enforced and reinforced through rewards and promotions, recognition of those who live the values and those who defy them. At times of difficult decisions, the application of the values becomes essential. If they are only good in fair weather, they will not be taken seriously and therefore will not be institutionalized.
Fifth, such values must guide hiring and promotion decisions.
Culture and Society
Stewardship Capital at the level of culture and society refers to the capacity of a culture and its expression in social structures to build and enhance the requisite habits and dispositions in individuals and subsidiary organizations of collective energies and purpose.
The opposite of Stewardship Capital at the level of culture and social institutions is selfish divisiveness, exploitation of others, and low levels of trust. With low levels of Stewardship Capital available, individual efforts find difficulty in scaling up to larger undertakings that demand more interpersonal reliance and reciprocal confidence. With low levels of Stewardship Capital, risks take on more significance and individuals and organizations tend to be more risk averse and more oriented towards present accomplishment and secure short-term achievements.
The norms and practices of Social Darwinism, therefore, are unlikely to produce Stewardship Capital. Neither are cultures that stress indulgence and consumerism. Following Aristotle, it can be said that the getting of money as an end itself will not engender high levels of Stewardship Capital.
One can argue that Japanese beliefs in Kyosei, the interdependence of living organisms on their various eco-systems, and habits of finding giri-ninjo relationships of mutual dependency both promote Stewardship Capital, though a form of Stewardship Capital inwardly looking towards group loyalty first and foremost.
Stewardship Capital is the link sought by Max Weber in this thesis on the Protestant Ethic and the Spirit of Capitalism. The Protestant Ethic was a cultural power expressed in social arrangements that together produced unusually high levels of Stewardship Capital. So too was the advice given by Benjamin Franklin in his Poor Richard’s Almanac and his little story The Way to Wealth a road map towards the accumulation of Stewardship Capital.
To properly promote Stewardship Capital, the culture must have a universalizing ethic that provides ultimate meaning to a life of service and commitment. The cultural must not be overly fatalistic so that individual effort is believed to bring success and improvement in one’s condition. Nor can the culture promote over-dependence on the spirits and gods as the determinate powers in the cosmos, turning humanity into passive supplicants.
At more subordinate levels of meaning and belief, the culture must advocate norms and forms of behavior that engage the individual ego in collective efforts that rely upon individual effort linked to the cooperative engagements of others.
The culture must also provide individuals with sufficient psycho-cognitive resources to support a healthy self-esteem and confidence in self as a doer of good deeds with autonomy and integrity. This is to say that a culture promoting Stewardship Capital will value social intelligence and forms of mutuality.
At the level of institutional expression of cultural values instigating and supporting Stewardship Capital, we find first of all the family and all psychosocial dynamics arising from family interactions and expectations. Second, are systems of education – formal and informal. Third are religious institutions and practices. Fourth is peer engagement and reassurance – the quality and orientation of social networks. Fifth is role allocation of duties, responsibilities, power and prestige. Sixth are economic rewards, including returns to all forms of capital.
Developing Stewardship Capital
To develop higher levels of Stewardship Capital, cultural norms and expectations must be addressed and social arrangements made to instantiate such norms and expectations in the routine of daily life. Individual potential for possessing higher levels of Stewardship Capital is then facilitated and enhanced.