$35,000 commode!

John Thain, former Chief Executive of Merrill Lynch, has agreed to repay the $1.2 million for his office renovations, including his $35,000 commode and $87,000 area rug!

A more serious breach of shareholder fiduciary responsibility revolves around the payment of discretionary bonuses to key executives as Merrill posted a larger than expected fourth quarter 2008 loss…. and of course, just before asking for US taxpayer bailout money!

Click here for the New York Times story

I read this stuff and I get just plain angry. How is an investor suppose to gain confidence in the financial markets, when this kind of abuse and disregard for the responsibility of a CEO to uphold the shareholders interest are so common in today’s society?

As an independent advisor, I have a fiduciary duty to my clients which means, their interests come before my own. I take this duty very seriously. In addition, I know my clients, and for me that means, “it is just business” does not compute. It is always personal.

When corporate scandals present the possibility of jeopardizing my clients’ financial futures, I have to question, am I doing enough? Am I doing the right thing?

How did society develop to this place? Where are we going from here? How soon can we get there?

There is a long standing movement to values based decision making in business. In the investment world it is called Socially Responsible Investing (SRI). (learn more at www.SocialInvest.org)

Simply put, SRI means, that in addition rigorous financial analysis, consideration is given to corporate policies and governance issues. In other words, how a company impacts the environment, how it treats its employees, excessive CEO compensation, and the like are considered in addition to the financials before making a decision to own a stock or bond of a particular company.
When I first learned of this idea, I thought it was a bit out there. After all, isn’t business just business?

Not at all. If you want to know what is happening, follow the money. If you want to make an impact, change your behavior with your money. It is a really simple and powerful idea.

Now that I have been a part of the SRI community for years, and continue to see the damage done to individual investors in cases like Merrill Lynch, Enron and World Com, I have come full circle. How can we NOT consider the corporate policies and governance issues before investing? Why would we turn a blind eye to values in the name of greater profit? Why have we let money run our lives for so long, without proper conscious?

In this time the world is calling out for change. Paying attention to how you receive, spend and invest your money is one of the most important areas in your life that needs changing. Step up. Step in time with your values. Give money its due place, equal in line with your values.

May prosperity be yours,

Mackey McNeill, CPA/PFS IAR
President and CEO
Mackey Advisors
www.CultivatingProsperity.com
859-331-7755
Mackey@CultivatingProsperity.com