The MBA Oath: Toward a More Perfect World

Creators of Harvard's MBA Oath argue it's an important first step toward a better, more ethical, business world

By Humberto Moreira and Whitney Petersmeyer

Last month we watched as news broke of one of the largest insider-trading scandals in history. While the urgency of the financial crisis may be dissipating, the need for a higher ethical standard in business is as relevant as ever.

The MBA Oath is a voluntary pledge to create value responsibly and ethically. With over 1,700 signers and growing, the Oath has helped MBAs from around the world examine their own ethical standards and belief systems.

Started at Harvard Business School (Harvard Full-Time MBA Profile) in May 2009, the MBA Oath has received both criticism and praise. At HBS, in this new academic year, there have already been several op-ed articles in the campus newspaper on both sides of the issue. We think this discourse is good. Members of the class of 2010 at HBS are now designingTown Hall meetings for students and faculty to engage in a constructive conversation. Importantly, student leaders from other campuses are getting involved, contributing diverse perspectives.

The Oath has succeeded in fueling a meaningful dialogue about integrity in business management. In the interest of advancing the conversation, we address four salient questions regarding the Oath's purpose and relevance.

Is the MBA Oath anti-business?

No. At the heart of the Oath is the deepest respect for capitalism and free enterprise as a means of creating value. The Oath asks leaders to "manage my enterprise in good faith, guarding against decisions and behavior that advance my own narrow ambitions but harm the enterprise and the societies it serves." This commitment is in the long-term interest of the enterprise and its shareholders.

Business leaders are stewards of enormous amounts of resources—financial, human, and environmental. As rising business leaders, we sign and support the MBA Oath because we fundamentally believe business managers should be standard-bearers of ethics and professionalism. To sign the Oath is to acknowledge that our actions have far-reaching consequences in shaping society.

I'm an ethical person. Do I really need an oath?

A Harvard Business School professor, in his closing remarks following a case discussion on the financial crisis, told students: "Leadership is about protecting yourself and others in your organization from becoming morally disengaged." Even the most ethical among us make decisions in a world of relative standards: We evaluate, make, and rationalize choices using the people and institutions around us as benchmarks. In a world where all business leaders operate with the utmost integrity, relative standards would be enough. Unfortunately, business history has shown that relative standards gradually lead good people to make bad decisions, from the halls of Enron to the mortgage-backed securities desk.

To put this into context, Harvard Business School recently hosted two white collar criminals to share with students how a slippery slope landed them in federal prison for fraud. The lesson was that we "practice" making bad decisions through daily, seemingly inconsequential, unethical choices (adding $5 to an expense reimbursement, for example). The felon reflected: "Through small acts, I built up a capability for making and rationalizing unethical decisions."

The MBA Oath offers a compelling alternative to relative standards—a higher absolute standard that holds steadfast in a world of shifting relative ones. As one student explained after signing: "The Oath is a reminder of my own potential.

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