Risk and Broad Wealth

Risk - a fundamental definition

Risk mandates that do not account for risk outcomes often viewed as apparently social or political costs account neither for the multi-dimensional engagement of risk experienced by stakeholders nor the individual weighting amongst stakeholders of the importance ascribed to each outcome. Fifth Capital thus employs a fundamental definition of Risk:

Risk is that which comprises known situations of Opportunity and Danger arising from future events in which something of human value is put at stake and the outcome is not definite (after Rosa)

Broad Wealth

Within an increasingly globalised political economy the intermediation of political agencies, NGO’s, MNE’s or multinational enterprises and the financial markets has grown ever more complex and it has been made increasingly apparent that i. modeling the dynamic, non-linear ‘real world’ is wrought with substantial difficulties and ii. the sustainability of the effort to create wealth rests not only on the availability of economic or financial capital but also on maintaining a broader equilibrium between stakeholders (including shareholders),
i.e., the need to maintain social and political capital.

Fifth Capital has developed the concept of Broad Wealth as a descriptor aggregating Economic, Social & Political Capital; it is derived as a series of functional and set relationships within a qualitative dynamics schema (that allows for the transitioning of complex, non-linear systems between equilibrium, oscillating and chaotic organisational states).

CSR & RI

Fifth Capital bases its CSR & RI work upon its founding propositions and a view of the CSR & RI landscape as summarised in its presentation (available upon request) entitled ‘Uncertainty, Stakeholder Democracy & Broad Wealth’ first delivered to the OECD-ILO High Level Conference on Corporate Social Responsibility held in Paris, France in June 2008 wherein we address the market rationale of CSR & RI practices and the resulting interfacing roles between MNE’s, Government and Savings Mobilisers.

Fifth Capital’s approach refers to and emphasises consistency with global agencies such as the OECD and its projects i. Guidelines for Multinational Enterprises including, for example, Corporate Governance and Corporate Social Responsibility (including Responsible Investment practise for Financial Institutions) and ii. Measuring the Progress of Societies.

Whilst integrative of its general services, Fifth Capital also offers its CSR & RI services on via a modular portal entry programme including Stakeholder Mandate, Programme Design & Oversight, Fund Advisory, Brand & Reputation Management and Government Relations.

research demonstrates that whereas experts define risk in a narrow, technical way the public has a richer, more complex view that incorporates value-laden considerations such as equity, catastrophic potential and controllability. The issue is not whether these are legitimate, rational considerations but how to integrate them into risk analyses and policy decisions

Slovic

Fifth Capital