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What it means to be a fiduciary; A formula for meeting the expectations of the role: be deeply informed, perpetually skeptical, and collegially independent.

Article Excerpt
"FIDUCIARY" IS NOT a word one hears much in common usage these days. It has a certain Victorian ring to it--an aura of vigorous rectitude out of touch with our contemporary world of moral relativism.

But "fiduciary" is at the heart of governance. Sitting on any governing board--corporate, mutual fund, or nonprofit--means first and foremost serving as a fiduciary. And that concept is as relevant today as it was 75 or 100 years ago when our grand-parents learned the basics, if not more so.

At its root, "fiduciary" derives from the Latin fidere, to trust. A fiduciary is someone who holds something in trust for another. Its Anglo-Saxon synonym is "trust," derived from the Middle English traust, meaning trust, protection, or firmness. These two linguistic first cousins share a common concept of confidence in the integrity, veracity, and reliability of someone to act on another's behalf.

At the heart of being a fiduciary

The heart of being a fiduciary is acting as you would wish another to act on your own behalf. Representing the interests of the shareholder as a director of a company means putting yourself in the position of continually asking how you would wish to be treated if you were yourself a shareholder. Would you feel--at all times and in all circumstances--fully comfortable with the judgments, actions, and decisions you made as a director? Would you be prepared to entrust additional resources--financial, intellectual, personal--to such a person? Would you have confidence that such trust would be warranted, tomorrow morning as well as 10 years from now?

This view of being a...