Our Need, Your Interest: Responsible Decision Making in Private Equity

Abstract

The Karmijn Kapitaal case presented in this chapter is primarily focused on socially responsible decision-making when raising investment capital. It encourages debate around the responsibility that investment professionals have when accept- ing investment commitments from individuals. Readers are invited to consider the extent to which caveat emptor should apply when a conflict exists between capital needs of the fund being managed and the true interests of a prospective inves- tor, particularly when all legal requirements are comfortably met.

A number of broader issues relevant to the UN Global Compact (UNGC) principles are surfaced throughout the case to encourage readers to look beyond the bottom line when making decisions that are responsible and just. The context of the firm and its philosophy also encourages a dialogue around diversity and inclusion as sources of economic and social advantage for organizations.

From a Principles for Responsible Management Education (PRME) perspective, Karmijn Kapitaal is an excellent example of how the six PRME principles (pur- pose, values, method, research, partnership, and dialogue) can be integrated into the development of a single pedagogical instrument. The case was developed with the active support of the company’s founding partners to graphically illustrate the conflicts faced by executives when weighing narrower corporate interests against broader societal responsibilities. It has been written in a manner that justifies its use across a variety of courses – business ethics, entrepreneurship, investments, business strategy, and leadership – to encourage students to think about their wider responsibilities as future business leaders.