An opinion piece in today’s Daily Mirror raises an interesting point: George W. Bush (who is partly blamed for the banking crisis); Andy Hornby, former CEO of HBOS, the failed U.K. bank; Rick Wagoner, CEO of nearly bankrupt General Motors; and Jeff Skilling, disgraced CEO of Enron, all hold MBAs from the Harvard Business School. Allan Mullay, the Ford CEO who is being severely criticized for his $21 million compensation package, holds an MBA from MIT. In fact, many of the world’s top banking executives hold MBAs from major business schools.
The question raised by the piece is this: Do these schools devote enough time to the study of ethics and values? Supposedly, business schools are receiving strong criticism for creating a mindset of self-interest and self-preservation that ignored the need to balance the interests of all stakeholders a business touches.
Business schools move their students through quickly; a typical course of study lasts 12 to 24 months, and it can be difficult to sandwich in courses on ethics, good values, and corporate citizenship. Even so, the best business schools will make this happen. Tomorrow’s leaders need to understand that they must, in fact, lead in the area of corporate citizenship.
One proposal is to require students to take a kind of Hippocratic oath upon graduation. The oath might touch upon such issues as selfishness (“considerations of personal benefit will never become more important than the interests of the enterprise I manage”) and transparency (“I swear to represent my enterprise’s performance accurately and transparently to all parties”).
Carried to its extreme, this would seem to require a licensing board and the possibility that someone could lose his license to practice business. That seems to be a little much. I’ve always opposed licensing journalists and PR people, and I feel much the same about business people. In this country, anyone should have the right to go into business and succeed or fail as skill and enterprise dictate. The market should be able to shake out incompetence. The law should be able to give a comeuppance to ne’er-do-wells.
That said, top business schools need to move beyond teaching the ins-and-outs of net present value and hurdle rates. In my MBA program, a common theme was that executives existed to maximize shareholder value, and that’s fair enough. We’ve seen the damage that can be done, however, when that notion is emphasized to the exclusion of others, such as fair play and an understanding that shareholders – and society – pay a price for unethical behavior.
Business schools can make a great contribution by helping their students understanding their responsibilities to a variety of audiences beyond shareholders.
