Ancient Greek and Judeo-Christian texts use the same word, wisdom, to denote both righteous or ethical, and smart or clever behavior. These choices have great outcomes while also treating people with kindness and fairness, and stewarding gifts and resources well. Modern languages have separated these two concepts, and we often think of doing what’s right as being in opposition to doing what’s smart, or getting ahead in life. At Eventide, we believe that wise investing is the best path to success: investing in companies that succeed by creating value for others.
Read the Transcript:
What would a wise approach to investing look like?
It would have to be as concerned with people as it is with profit. It’s difficult for us to think about these two concepts being brought together. But I think when we take a closer look at how a business operates, we can see that profit and people are not opposing concepts. I think this opposition melts away.
So I want to talk to you about shareholders and stakeholders. Shareholders, we know of course — that’s the beneficial owners of the company. That’s your investors. That’s you as a fiduciary seeking maximum return for a minimum amount of risk.
Now, stakeholders are all of the other relationships in a business. That would be your customers, employees, suppliers, host communities — the places where the business is physically being operated — the natural environment, and society broadly. Those six. These are what we would call the stakeholders in a business.
Now, when people think about stakeholders, they tend to see stakeholders as those that are affected by a business. These are the groups that are left holding the bag when business gets greedy and those to whom business should have a sense of responsibility. All that’s true, but what we at Eventide would say, what is underappreciated is the effect that stakeholders have back on to the business, the effect that stakeholders have on business success. As we take this journey of seeking to apply a wise framework, what’s smart and what’s right in investing, we will show how creating value for stakeholders in our view can lead to long-term investing success for shareholders.