We all know the old joke about the city slicker who asks the farmer how much milk does that cow of yours give? And is told, “she don’t give any. You’ve got to go take it away from her.”
That has been my experience over three decades as a university president. Neither milk nor money wander in on their own. If you raise money, it is because you are out there soliciting it. But once, a gentleman visited me proffering a check for $1-million. He said that he wanted to give it to the university in honor of two of its graduates. He had been a business partner of theirs and they’d gone bust. He had the deeper pocket and had ended up having to pay off all of their collective debt. Ten years had passed. Things had turned around for his two associates and one afternoon they showed up saying that they wanted to hold him harmless for their share of what they had lost, with interest.
He took the money, but on reflection he realized that he had long ago written off the loss, and so much time had passed that it was largely a memory. He had prospered and wanted to acknowledge the ethical behavior of his two associates by turning the money over to GW to celebrate their integrity. They had acted without prompting or any reminder from him. He attributed their virtue to the fact that they were both GW graduates. He said they must have learned such in their classes in Foggy Bottom. I was privately dubious; I myself attributed the behavior to their parents, but it didn’t seem sound to contradict him. So I accepted his offer, with gratitude, enhanced it from funds I had raised to be used at the president’s discretion and created a chair in honor of Serge Gambel and Tad Lindner at GW’s Business School, a Chair in Ethics, to which we attracted a distinguished scholar. I believe the appointment added value to the already strong faculty at the university. And I’m in favor of teaching ethics across the curriculum. We all need to be ethical and instruction and role modeling should come whenever an appropriate opportunity presents itself, from pre-K up, from churches, mosques, and synagogues, in almost all circumstances. Surely that is what parents, other adults, and institutions are supposed to provide for their children. It takes a village, as a friend of mine used to say.
I don’t want to seem too tedious about this. So I recall the story about the shopkeeper who gave a customer change from what they thought was a $10 bill on a $2 purchase. After the transaction was completed and the client was departing, the clerk realized that he had been given a $20 bill. Now comes the two-part ethical question. Does he return the $10 difference to the customer or does he put it in his pocket — and later on, the truly hard decision — does he tell his partner? That this tale is so yesterday that many of you will read it and groan makes me wonder if a discussion about ethics and business education can be made fresh. Is there more to say? And yet an effort seems to be underway.
How did the study of business earn the reputation for not caring about ethics?
I ask this because lately I’ve seen press releases about the teaching of ethics presented as a new component for business-school degrees. They emphasize the profound change this brings to the curriculum. When I took the Bar Review course in New York, the instructor said, “There will be an ethics question on the Bar Exam. Whatever the lawyer did, he was wrong. Answer in that way and you can’t be wrong!” He moved on to torts.
An article in the Washington Post reports about my own GW: “The school … is transforming its curriculum with its current first-year graduate students, emphasizing ethical business practices and globalization. Such trends have been growing throughout U.S. business education. But GW administrators say they are taking it further than any other school, not adding a course or a workshop but infusing the entire curriculum with these principles. ‘We really took a huge risk,’ said Murat Tarimcilar, associate dean for graduate programs. “When we say we really would like people who are committed to be ethical leaders, we may be making the applicant pool very small. For many MBA students, the driving factor is the money. But we thought we had a responsibility, as a university, to really work on their character, as well.”
But now its ethics vs. money: Somehow I fail to see how one conflicts with the other. But perhaps that shows naiveté and parochialism. I always had a healthy respect for money. It is neither good nor bad. Value neutral. I think one sanctifies it with its use. Show me a man’s check register and I will tell you his values.
Let’s go back a step. Personal character is developed way before a student gets to graduate school. I believe most students come to college as ethical human beings, honest and respectful members of a community. Yes, it true that schools have their own list of rules — dos and don’ts — for students to follow: Thou must not cheat; thou shall not plagiarize; thou shall respect one’s roommates and classmates; etc. But these are similar to the body of laws all societies have had since Hammurabi or Moses. We understand that occasionally someone — even a Ph.D. — strays from the code of behavior and there are consequences and due process. Likewise, most faculty come to campus as ethical human beings, honest and upstanding colleagues. And similarly, there are rules for them, too, set out in the faculty manual. So start with an ethical student body and an ethical faculty. How does a transformation to the dark side take place? How do these ethical faculty members convert these ethical students into people who do unethical things once they enter the workplace? That there are transgressions in society is no surprise: Read the Bible, Shakespeare, and writers before, after, and in-between.
Come into college ethical, go out a scoundrel: it just doesn’t wash. No, something else is going on. What is it?
Some believe that success in business is achieved with hard work assisted by dubious behavior. Increasingly, people wonder when a company posts strong returns, has it somehow cut corners, turned a blind eye and/or is teetering on the edge of legal propriety. “Behind every great fortune” it is said, “lays a great crime.” Even before the era of the “robber barons,” when business earned a deserved black eye, there have been those pesky skeptics of commercial enterprise.
And all too often, a contemporary example of corporate greed reminds the public of this unhappy history.
For many years, links were developed between principles of ethics and the principles of accounting. If you “pushed” the accounting and/or tax laws to the margin, you were thought to have entered a gray area — the extreme of which would be “cooking the books” and lack of honesty. Others would say that the tax laws (like all laws) are open to interpretation, and innovatively interpreting the laws is exactly what one asks an accountant to do — pay taxes that are due, not a single penny more. And from the accounting, we move to a broader range of business practices — how one conducts oneself with clients, suppliers, agents, partners, colleagues, workers, etc. Like life itself, the “conduct” of business is rich in its complexity. It is not for nothing that law schools offer classes on contracts. A handshake is not generally sufficient. And when it comes to real estate, well that’s a whole other matter.
Today, we have added dimensions beyond accounting and fiduciary practices. The fashionable on campus link ethics with the environment: the greener the company, the more “ethical” it appears. Being concerned about the world’s welfare in general, and one’s neighbors in particular, demonstrates good, and good equates to ethical. Darth Vader is the polluter, dumping harmful matter into water, soil or air.
But the ethics picture has expanded even further as people have become aware of the connections between us all: the treatment of the earth; handling of scarce resources; the interdependence of what we grow / mine / manufacture; how we plant / irrigate / dig / market / sell / use / discard / remake / discard again — all blends into a portrait of ethical behavior that was inconceivable as recently as 25 years ago.
Unless, perhaps, you were in the American labor movement, when issues such as the exploitation of child and women laborers in the U.S. was being addressed.
Ethics aren’t seasonal; they are always in fashion. But emphases do change as society addresses new concerns. We sometimes make trade-offs that we later regret. For example, chemicals such as DDT protect us from insects carrying deadly diseases and reduce death by significant numbers, but at a cost. Some products were introduced to the market prematurely without understanding potential harmful effects. Think asbestos. In an overzealous manner, the fire retardant industry neglected to acknowledge the ramifications of its product, or did it? Are the behaviors negligence, greed, and the lack of ethics, or part of all of the above? Some needs were satisfied while other problems were created. Does this mean that business is a constant cost-benefit analysis: dollars and cents and dollars and sense? Do we see the law of unintended consequences at work?
And what about those companies that don’t make a product, such as the financial-services industry, comprised of entities that grow capital, lend resources to some, hold funds for others and that persuade people that investing today promises a better future tomorrow? The assumption of risk has a price. But how much risk and how big a price? And, for whom? When a Certificate of Deposit earns 13 percent interest the holder is thrilled. When a credit card charges 19 percent interest, the holder is aghast.
Returning now to the business-school curriculum. “Ethical leadership” is a phrase used in the GW press release to describe changes in the M.B.A. degree, another of those compound descriptions that both elaborates and obscures the understanding. We are seeking ways to enrich the curriculum with values, as if they have been missing; now, at last, we hope to send forth a class of business people charged to recognize corruption, abuse of power and insensitivity to human concerns when they see them. And do something!
As a society we have indulged behaviors that have given us extraordinary rewards. America, even in these days of highly troubled financial markets, is an economic engine of profound depth and resiliency, propelled by a business world composed of a diversity of companies that create, produce, market, service, transport, study, fuel and communicate. There are as many differences among industries as similarities. But in the end, for the entire system to work, there needs to be an acknowledgment that if you continually step on your neighbor’s toes, she’s likely to get aggravated: if you push around others, you’re a bully; if you “liberate” what is not yours, you’re a thief; if you ignore a regulation you’re dishonest; if you create a Ponzi scheme, you’re a manipulating fraud; if you strip the earth bare, you’ve robbed the future.
Maybe we need business-school ethics classes. Perhaps we need an entire revamp of human behavior. It cannot be that only the young, Al Gore, and Pete Seeger believe in tomorrow. Do we want to wait for graduate school to raise these issues? At P.S. 254 in Brooklyn, they started in the first grade. They did their best. Nevertheless, some of my classmates ended up in the slammer.
