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Stewardship: Lessons Learned from the Lost Culture of Wall Street

ISBN: 978-1-118-19019-7
240 pages
March 2012
Stewardship: Lessons Learned from the Lost Culture of Wall Street (111819019X) cover image
A compelling argument for why stewardship of wealth and service to others should be our highest financial priority

Stewardship is the journey of financial insider John Taft towards understanding and affirming the importance of stewardship—which he has come to define as "serving others"—as a core principle for the financial services industry, the global financial system, and society at large.

By defining the attributes of authentic stewardship, this book presents a path forward by analyzing the success of Canadian banks in weathering the financial crisis; evaluates the effectiveness of global financial reform efforts in making the financial system safer, sounder, and more secure; offers wealth management prescriptions for individual investors; evaluates the potential of ESG (environmental, social, and governance) investment processes as a way to instill stewardship behaviors among corporate CEOs (particularly at financial services firms); and, ultimately, calls for a return to stewardship's core principles as the key to not only minimizing the scope and consequences of future failures, but also to addressing other societal challenges.

  • Argues for a return towards stewardship, with financial services companies doing right by their customers
  • Analyzes the response of Canadian banks to the financial crisis to provide meaningful advice for investors and businesses alike
  • Inspired by Taft's experience running one of the largest wealth management firms in the country during the financial crisis and his direct participation in subsequent legislative and regulatory efforts to rewrite the rules under which the U.S. securities industry operates

From the man who made the decision to reimburse clients affected by the collapse of a money market mutual fund comes a compelling look at why financial service companies should start doing what's right for their customers.

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Foreword xi

Introduction xvii

Chapter 1 Core Principles: The Ground Beneath Our Feet 1

Interlude—Learning from Failure: Acquainted with Grief 7

Chapter 2 Finance Run Amok: Selfishness Trumps Stewardship 9

Interlude—Occupying Wall Street: Too Rich and Too Poor 19

Chapter 3 Stewardship Defined: Feeding Your Flock First 23

Interlude—Greed, Glorious Greed 32

Chapter 4 World’s Safest Banking System: Canada, the New Switzerland 35

Interlude—Americans Are from Mars, Canadians Are from Venus 47

Chapter 5 Making the System Stronger: In Defense of Dodd-Frank and Basel III 51

Interlude—Too Small to Save? 74

Chapter 6 Making the Investor Safer: In Defense of New Fiduciary Rules 77

Interlude—An Obligation of Honor 84

Chapter 7 To Investors Standing on the Wings: Prepare for the Next Crisis 87

Interlude—Predatory Volatility 109

Chapter 8 Environmental, Social, and Governance Investing: Could It Be the Answer? 113

Interlude—It’s a Long Life: The Trouble with Short-Termism 129

Chapter 9 Communities, Caring, and Commitment: Reconnecting with Our Stewardship Responsibilities 131

Afterword 145

Appendix A Balanced Financial Regulation 147

Appendix B Basel III Regulatory Accord 151

Appendix C Creating a Clear Path Forward 161

Notes 165

Glossary of Selected Financial and Regulatory Reform Terminology 179

Author’s Guide to Supplemental Readings 191

Additional Sources 197

Acknowledgments 203

About the Author 205

Index 207

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John G. Taft is CEO of RBC Wealth Management–U.S. He is a leading figure in the U.S. securities industry and served as Chairman of the Securities Industry and Financial Markets Association (SIFMA) in 2011. He is a direct descendant of U.S. President William Howard Taft and Senator Robert A. Taft.

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February 22, 2012
John G. Taft Outlines Core Principles For a More Stable and Compassionate Financial System

As the CEO of RBC Wealth Management, one of the most prestigious financial services firms in the U.S., and former chairman of the Securities Industry and Financial Markets Association, John G. Taft is uniquely qualified to offer an “insider's view" of the finanical crisis, including a detailed analysis of the stewardship failure of some Wall Street institutions and leaders that caused one of the most difficult periods in the financial industry.

Driven by a conviction that purposefulness, accountability, humility, integrity, and foresight are our duty, and that making the world a better place is our calling, Taft outlines his belief in the core principles of stewardship in his book, Stewardship: Lessons Learned from the Lost Culture of Wall Street (Wiley, Hardcover and ebook, March 2012, $27.95, 978-1-1181-9019-7). The book presents an intelligent, thoughtful argument for the importance of establishing service to others as the key to saving ourselves from the ongoing financial crisis, and creating a more stable and compassionate financial system by restoring confidence and renewing hope. 

Born out of Taft's participation in legislative and regulatory efforts to rewrite the rules under which the U.S. securities industry will operate for decades to come, the book offers a unique response to the challenges of the financial crisis. Inspired by Taft's experience running one of the largest wealth management firms in the country during the financial crisis, the book:

  • Provides an in-depth analysis of the ways in which Canadian banks responded to the crisis with integrity and established themselves as models of fiscal responsibility
  • Evaluates the effectiveness of global financial reform efforts in making the financial system safer, sounder, and more secure
  • Offers wealth management prescriptions for individual investors
  • Evaluates the potential of ESG (environmental, social, and governance) investment processes as a way to instill stewardship behaviors among corporate CEOs, particularly at financial services firms
  • Considers how a renewed commitment to helping others has implications for the future of the financial services industry, the prevention of future crises, the protection of the environment, and much more

Taft, the great grandson of U.S. President William Howard Taft and grandson of Senator Robert Taft, builds on his family legacy that is well known for its commitment to integrity throughout the book. “It’s particularly in times like a financial crisis that core principles matter. These principles are the only solid ground under our feet when everything is, or seems to be, unstable,” says Taft. “Because of my family’s values I have always believed in the importance of these principals and that if you don't get them right, nothing else matters.”

To illustrate his arguments, Taft employs engaging end-of-chapter vignettes that demonstrate his ideas in action. Extensive appendices on EU financial reform, the Basel III Accord, and thoughts on creating a more compassionate future augment the text to create a fascinating guide to a better future.

“Our stewardship legacy is defined not just by how we serve others during our lifetimes, but the impact of our actions on generations into the future. It will also determine whether we prevent sustainability threats to society in areas like resource scarcity, climate change, population growth, fiscal policy, and income inequality,” adds Taft. “Our collective willingness to live up to our stewardship responsibilities will determine whether or not we repeat or abet future recurrences of the financial crisis of 2008-2009. Our future literally depends on it.”

Keeping in line with his stewardship values, Taft will be donating all proceeds of the book to charity.

For more information, please visit www.johngtaft.com.  

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