Kenya RPCV Dan Steininger of Catholic Knights expresses ethical concerns to SEC
Read and comment on this story from the Milwaukee Business Journal on Kenya RPCV Dan Steininger, head of the Catholic Knights, a fraternal insurance company, who recently sent a letter expressing ethical concerns to the Security Exchange Commission (SEC). Steininger says that corporate boards have to become more vigilant in monitoring management for self-serving initiatives.
Steininger's push for more accountability from mutual fund managers dovetails with the Catholic Funds' advocacy for corporate ethics. "We believe in capitalism because capitalism creates jobs. But we also believe you can run a successful enterprise and still recognize the dignity of each individual," said Steininger.
Steininger spent two years in Kenya as a Peace Corps volunteer from 1968 to 1970. The experience colored Steininger's views on how the Catholic Funds are managed and how Catholic Knights operates as an organization. Read the story at:
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Steininger takes ethical advocacy to next level
Catholic Funds chief sends letter to SEC
Michael Muckian
When it comes to stock options for corporate management, Dan Steininger believes that what executives want too frequently is what they get.
Steininger, chairman of The Catholic Funds Inc. and president and chief executive officer of Catholic Knights, a fraternal insurance company, sent a letter Nov. 7 to express his concerns with Securities & Exchange Commission officials.
At issue is what Steininger describes as strident resistance by some mutual fund managers to the SEC's Sept. 24 call for full disclosure of corporate proxy votes and voting policies on behalf of investors. Disclosure would expose fund managers' conflicts of interest and discourage wrongdoing, said recently departed SEC chairman Harvey Pitt.
The SEC's initiative threatens to curb corporate management profiteering through excessive stock option accumulation, said Steininger. He agrees with the SEC's proposed steps to expose what he calls "this travesty of justice."
"Can you imagine if our elected representatives to Congress and the Senate refused to disclose their votes? It would be an outrage," Steininger wrote in his Nov. 7 letter to the SEC.
Steininger's strong beliefs on behalf of ethical investing and business management are no surprise to those who know him.
"His approach is a real positive for the market," said Bill Nasgovitz, president of the Heartland Funds, Milwaukee.
Nasgovitz said Steininger's crusade is also timely because corporate boards have to become more vigilant in monitoring management for self-serving initiatives.
"I think in today's environment, directors are going to pay a lot closer attention than they have in the past," Nasgovitz said.
Ethical dovetail
Steininger's push for more accountability from mutual fund managers dovetails with The Catholic Funds' advocacy for corporate ethics.
Three years ago, The Catholic Funds established funds that invested in stocks that agree with Catholic values, such as opposing abortion. During the first quarter of this year, The Catholic Funds racheted up their activism to invest in companies where fund managers want to agitate for change in corporate philosophy.
The Catholic Funds index includes all the companies in the S&P 500, except six that deal in abortion. Those companies are HCA Inc., Health Management Associates Inc., HealthSouth Corp., Pharmacia Corp., Tenet Healthcare Corp. and Wyeth.
The advantage of investing in the $25.5 million Catholic Fund, which includes both equity and money market funds, is its ethical advocacy on behalf of investors, said Steininger. Funds representatives have already voiced opposition to various issues at 50 of the 496 companies' annual meetings. They've voted against stock option plans, supported performance-based executive compensation, and opposed auditor appointments they felt weren't independent enough from other company operations.
The advocacy role sets The Catholic Funds apart from other social responsibility funds, said Rochelle Lamm, chairman and chief executive officer for Precision Marketing Partners and the Academy of Financial Services Studies, Waukesha, both of which have worked with Steininger to position and market the funds. The funds' goals could not be more appropriate to investors' current concerns, Lamm said.
"What's on Dan's mind is now on investor's minds," she said.
Such concerns are as much reflections of Steininger's personal ethics as they are based on the Catholic values he says the fund espouses. The grandson of Daniel Hoan cites the socialist leanings of the former Milwaukee mayor in setting the stage for his own more humanistic beliefs.
"My ethical training began before I was born," he said.
A framed copy of a 1939 Time magazine covering lauding Hoan as mayor of "the best run city in America" decorates the executive's office suite in Knights Tower, 1100 W. Wells St.
Avid reader
Much of Steininger's management training was self-taught. His wall-length office bookshelf contains hundreds of books. All are well-thumbed, their pages underlined and tagged with thousands of Post-it notes. Most are management texts; many take an ethical or faith-based approach to business.
An autographed photo and personal letter from quality management expert W. Edwards Deming hang in the entry corridor to his office. The sign out front simply says "The Prez."
By his own assessment, Steininger had some catching up to do when he was named president of Catholic Knights in 1981. At the time an attorney with the Milwaukee law firm Ebert & Associates, Steininger was serving as vice president of the Catholic Knights board when he was tapped for the position. His father, Walter Steininger, served as a Catholic Knights board member from 1955 to his death in May 1972.
The young attorney spent two of the intervening years in Kenya as a Peace Corps volunteer from 1968 to 1970. The experience colored Steininger's views on how the Catholic Funds are managed and how Catholic Knights operates as an organization.
"We believe in capitalism because capitalism creates jobs. But we also believe you can run a successful enterprise and still recognize the dignity of each individual," said Steininger.
That philosophy carries over to The Catholic Funds, which support the peculiar notion that stock options at the companies in which the fund invests should not stop at the executive floor.
"Employees are the company to the general public, and we favor a wider dispersal of funds administered through a more ethical approach," said Steininger.
Steininger's approach to ethical capitalism has resulted in significant growth for the insurance company. Assets increased from $100 million to $600 million in the 21 years Steininger has been at the helm.
At $25.5 million, the 3-year-old Catholic Funds are among the state's smallest mutual funds. The Catholic Funds experienced losses of 19.5 percent for the 12-month period ended Sept. 30, according to statistics from independent rating service Morningstar Inc. Steininger attributes fund size to its relative youth and performance to the current bear market.
Catholic values and Steininger's personal ethics combine to produce a platform from which the executive can wage his crusade for more ethical business management.
"Our No. 1 benchmark is the return to shareholders, but a conscience will contribute to even greater success for any corporation that chooses to use it," said Steininger.
Catholic Knights is a dynamic, not-for-profit, member-owned organization devoted to enriching lives. In terms of assets, Catholic Knights is the largest Catholic membership organization in the United States that admits men, women and children members.
Catholic Knights seeks to be the most caring and trustworthy society for Catholics, and for more than 100 years has offered a wide range of valuable membership benefits, social and charitable activities, and strong financial products and services. Each year, Catholic Knights members raise more than $1 million in support of parishes, schools and communities.
Catholic Knights is one of more than 90 fraternal benefit societies across the nation, through which more than 10 million men, women and children unite to make a difference.
Catholic Knights focuses on four pillars of value and strength. These include:
Savings and Discounts We provide you with an array of grants, discounts and savings programs that can save you and your family thousands of dollars and help you meet your financial goals.
Security of Lifestyle We assist you in securing your lifestyle by providing financial services and products, custom tailored to your personal needs.
Sharing of Gifts and Talents Our member volunteers continually organize local fundraising efforts - which are matched by Catholic Knights donations - to benefit members, their neighbors, parishes, schools and communities.
Social Outlets Members have the opportunity to enjoy wholesome family activities — such as baseball games and ethnic festivals — at subsidized discounts.
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