Black and white portrait of Ray Dalio: Narrator and Creator of Life Principles

Principles are ways of successfully dealing with reality to get what you want out of life.

Ray Dalio, one of the world’s most successful investors and entrepreneurs, cites principles as his key to success.

Work Principle

And for Heaven's Sake, Don't Overlook Governance!

All that I've said thus far will be useless if you don't have good governance. Governance is the oversight system that removes the people and the processes if they aren't working well. It is the process that checks and balances power to assure that the principles and interests of the community as a whole are always placed above the interests and power of any individual or faction. Because power will rule, power must be put in the hands of capable people in key roles who have the right values, do their jobs well, and will check and balance the power of others.

I didn't realize the importance of this sort of governance until after I transitioned out of the CEO role, because I was an entrepreneur and company builder (as well as an investment manager) who largely did what I thought was best. While I needed and developed double-checks on myself--I created a Management Committee that I put above me so that I had to report to it--I always had the power of my equity to change things, though I never used it. Some might say that I was a benevolent despot because while I had all the power (the complete voting rights), I exercised my power in an idea-meritocratic way, recognizing that the good of the whole was best for us all, and that I needed to be double-checked. I certainly did not create the sort of governance system appropriate for Bridgewater, given its scale.

For example, Bridgewater didn't have a board of directors overseeing the CEOs, there were no internal regulations, no judicial system for people to appeal to, and no enforcement system, because we didn't need them. I, with the help of others, simply created the rules and enforced them, though everyone had the right to appeal and overturn my and others' judgments. Our principles were the equivalent of what the Articles of Confederation had been to the United States in its first years, and our policies were like our laws, but I never created a formal way of operating such as a "Constitution" or a justice system to enforce them and resolve disputes. As a result, when I stepped out and passed the power to others, confusions about decision rights arose. After conferring with some of the world's greatest experts on governance, we put a new system in place based on these principles. Still, I want to make clear that I don't consider myself an expert on governance and can't vouch for the following principles as much as I can vouch for the previous ones, because they are still new as of this writing.

Work Principle

Find a Meaningful Principle for You

Learn to get more of what you want out of life.

Life Principles

Work Principles

Please review our
Privacy Policy and Terms of Service
, which will go into effect on
. By continuing to use this site or our products or services, you agree to our
Terms of Service and acknowledge that you have read our Privacy Policy.