When do you do your best work? When someone tells you what to do, and how to do it? Or, when you're allowed to use your own initiative and ingenuity to get a task accomplished?
The vast majority of people would say that too many rules are a disincentive. The job gets done, but rarely is it a reflection of our ability to provide a margin of excellence.
Consider the United Airlines incident this week when a passenger was dragged off of an overbooked flight. The website www.askthepilot.com has provided the most plausible explanation as to why the United staff failed to act in the best interests of its customers:
Everything is scripted and rote and procedural, and employees are often so afraid of being reprimanded for making a bad decision (not to mention being pressed for time) that they don't make a decision at all, or will gladly hand the matter to somebody else [in this case to police] who can take responsibility. By and large, workers are deterred from thinking creatively exactly when they need to.
Herein is the fiduciary paradox: So that we can act in the best interests of others, we need to decrease the number and complexity of rules that require that we do just that.
When first published more than 40 years ago, the Employee Retirement Income Security Act struck the proper balance between Moral Aspiration (you want to) and Moral Obligation (you have to). "Fiduciary" was defined in terms of a principles-based procedural prudence standard. No investment would be considered imprudent on its face. It would be the way in which the investment is used, and how a decision as to its use was made, that would be examined to determine whether the fiduciary standard was met.
Think of a seesaw where the board represents governance (a fiduciary standard). At one end is Moral Aspiration, and at the other is Moral Obligation. When the two are in balance, we have the greatest capacity to provide a margin of excellence and to act in the best interests of others.
