Restoring Hope in Wall Street

Delivering the keynote address at the 13th Annual Minnesota Business Ethics Awards Luncheon, John Taft, chief executive officer of RBC Wealth Management – U.S., addressed the pressing need for restoring hope in Wall Street. Taft candidly stated that “the Wall Street culture is broken and needs to be fixed.”

In his address, Taft traced the events of the 2008-2009 financial services crisis in the U.S. wherein investors watched almost 50 percent of their savings decline. Investors were dazed—like the passengers of US Airways Flight 1549 piloted by Capt. Chesley Sullenberger in the “Miracle on the Hudson.” Just as those passengers stood on the wings of the plane in the icy waters of the Hudson River facing potential death, investors witnessed the terrifying spectacle of a near-collapse of our financial services system.

Congress moved swiftly with the passage of the Dodd-Frank legislation in 2010. The key aim of this legislation was to curb excessive risk-taking and to establish safeguards to prevent future breakdowns. While it is a good start, Taft believes it is not enough. The financial services industry needs to return to its roots: stewardship.

Citing passages from his just-released book, Stewardship: Lessons Learned from the Lost Culture of Wall Street, Taft defined the role of the financial services industry as an intermediary, bringing together those who have money to invest with those who have a need to deploy money. The financial services industry, he said, is a means to an end and not an end unto itself. Both the investor and those who deploy money benefit when the money is profitably put to use.

Taft defined stewardship as “a choice to serve others” with purposefulness, humility, accountability, foresight and integrity. He challenged the audience to embrace stewardship as a way of doing business, because stewardship is not limited to the financial services industry. Serving others should be our way of life.

This post is by Ron James, President and CEO of the Center for Ethical Business Cultures from the May 2012 Business Ethics Exchange