Posted by: Louis Lavelle on June 1, 2009
Will wonders never cease?
Just the other day, Babson (Babson Full-Time MBA Profile) announced that it was adopting the Principals for Responsible Management Education, a framework for advancing the cause of corporate social responsibility. It says, among other things, that adherents to the principals will strive to produce grads who generate “sustainable value for business and society” and create curricula that include “effective learning experiences for responsible leadership.”
Now along comes the New York Times, with the news that about 160 graduating MBAs at Harvard Business School (Harvard Full-Time MBA Profile) have signed a pledge to act ethically as managers and “serve the greater good.” The MBA Oath requires signers to “act with utmost integrity and pursue my work in an ethical manner,” and avoid “decisions that advance my own narrow ambitions but harm the enterprise and the societies it serves.”
There's been a lot of finger-pointing at MBAs in recent weeks, much of it justified, some of it not. The gist of it goes something like this: if business schools weren't so gosh darn intent on filling impressionable young MBAs with a lot of claptrap about maximizing shareholder value, a lot of the big stupid bets that led to the current financial crisis never would have been made.
Would it have helped if, 35 years ago, Richard Fuld was asked to sign a voluntary pledge to do no harm as he was graduating from NYU? I don't think so. By the time Fuld and others of his ilk got powerful enough to destroy the economy, the pledge would have been long forgotten--the fine sentiments long ago overruled by the day-to-day reality of angry shareholders, complacent boards, and pay packages that encourage the kind of damn-the-torpedo risks that ultimately sank his ship.
That fact is the 20% of Harvard's graduating class who signed the pledge will graduate into a world dominated by the 80% who didn't. I applaud the effort, but it's going to take a lot more than an oath to fix this problem.