B-School News April 4, 2007, 10:29PM EST

Mission: Social Responsibility

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Dr. Angel Cabrera
Senior Adviser for Academic Affairs
UN Global Compact Office
President, Thunderbird, The Garvin School of Global Management

Dr. Manuel Escudero
Head, Global Compact Networks & Academic Initiatives
UN Global Compact Office

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We act as facilitators of this initiative, the same way that the Principles for Responsible Investment have been facilitated by the U.N. Here, we are not only working with academic partners, but also these big institutions. The AACSB, the European Foundation for Management Development, and the Academy of Management have shown interest in exploring these principles. This is who business schools respond to. They look at requirements on the list and if they don't do it, they lose their accreditation.

Do media rankings have any role?

Cabrera: The influence of BusinessWeek, Financial Times, The Wall Street Journal rankings have a huge impact on these guys. Suppose that in a couple of years these publications require progress in ethics. It's already happening with the Aspen Institute and Beyond Grey Pinstripes, which measures and ranks social responsibility practices of business schools.

What bureaucratic challenges, if any, are there in working with an international organization like the U.N.? Would companies or business schools see a big barrier to entry?

Escudero: What we are putting forward is not a model of excellence. We are talking about an engagement model—the conviction to start a transformation. The process of becoming a responsible business school takes time. So it's a model with no entry barriers. It only takes the conviction and the commitment of the dean and the board to participate.

Cabrera: You do not have to pass an expensive test. You have to make a public commitment. Many business schools will not take that step until they're ready to. But that's the role that the U.N. will take. Schools might react against it initially, but when more schools, organizations, and businesses sign up, we hope this basically becomes mainstream.

A lot of people say you can't teach ethics. How would you respond?

Cabrera: Until now, we have avoided the whole topic of business ethics. People say, you cannot teach ethics, they are adults…. Well, the Aspen Institute ran a study measuring the values and beliefs of business students before they started their MBA and after they finished. Their beliefs changed dramatically.

Give me an example of how a company needs ethically trained business students.

Cabrera: I had a lunch yesterday in Chicago with a CEO of a major corporation that produces agricultural products throughout Latin America. They had an issue of child labor in Latin America. They knew that their farmers were using children in the production and they did not want to deal with this liability. Their solution was to quit.

They turned to the business schools and said, "We've given them the tools as managers to do complex international finance deals, marketing strategy. But we have not given them the skills to figure out how to deal with a child labor problem."

Escudero: Even in finance, responsible behavior is not valued. They do not take into consideration the conditions under which their business is generating. That's why this is not about an ethics course or corporate social responsibility. It's a whole curriculum change in operations, strategy, and marketing and so on. And that is only going to happen gradually.

Will it require many resources for these schools to invest in ethics?

Cabrera: It's not a question of putting more money into a school. It's a question of allocating your current resources. Imagine that new cases can lean toward a more responsible way of conducting business. It will take time. Also, even today a faculty member says to the dean, "I want support to run a project in international marketing in China," and the dean says, "Fabulous, we want to be in China." Everybody wants to be in China. But now say: "I'm going to do research about violation of human rights by manufacturing companies in Southeast Asia." Now, we're not sure about the value of that….

With these principles, if a professor applies for tenure, they would have to show how much research they've done. Are you going to value this type of research as much as you value traditional research? Are you going to require that they incorporate these things in their courses? So it's a change in attitude and mind-set.

Are you looking to instill this at the undergraduate level as well? Far more college students take business courses at that level.

Escudero: We are talking any academic institution involved in the education of future mangers or current business leaders. We're talking undergraduate, postgraduate, executive education, schools involved with public management, public administration, national relations, law schools that are training corporate lawyers. Of course the core is the business schools.

What is the consensus on opening business programs to international scrutiny?

Cabrera: It's a pretty significant change for a school. In fact, some institutions won't even sign it.

Escudero: That's why we're discussing the levels of participation. You don't need to have the whole school or university participate. Even a department could be a participant. And we'll work from there.