Ethics pledges, business schools, and the financial crisis

With all the talk recently of greedy bankers and guilty fraudsters, some people have been looking to business schools as a potential source of some of the problems. The New York Times recently published a stinging criticism highlighting the failure of schools to focus their students' skills and attention on anything more than short term shareholder value. Not surprisingly, it generated a lot of attention, not only in the business school community, but also among the broader readership of the paper.

Obviously schools can not be wholly to blame for sowing the seeds of the financial crisis, but the points made about the inattention to ethics and social responsibility in many MBA programs are well made. Things are changing, but there are still only a few schools (among which we'd count our own) where such critical issues have become deeply and meaningfully embedded in the curriculum. Students meanwhile have demonstrated that they are increasingly attentive to social and environmental issues. Survey evidence, growing course enrollments, and escalating membership of student clubs and competitions around CSR issues are all testament to that. Another way that this has started to surface though is in the emergence of "ethics pledges" - a growing phenomenon, particularly in the USA.


Emanating originally from Bentley University in the USA, the ‘Graduation Pledge of Social and Environmental Responsibility’ is perhaps the best known of these pledges. It is based around a pledge to ‘to explore and take into account the social and environmental consequences of any job’ that signers might consider, and commits signers ‘to try to improve these aspects of any organizations for which [they] work.’ The initiative’s website enables potential organizers to learn about how to organize on-campus campaigns, and to download posters, wallet cards, and other resources. So basically, the pledge is about sticking to your values, regardless of the various pressures or seductions of the workplace. Of course, making career choices can be hard when you want to make a difference in society. What if a potential employer seems to be offering you a great position but you’re not convinced that it shares your values? The ethics pledge aims to help students navigate these tough choices while keeping their commitments to ethics and social responsibility intact.

More than a hundred schools and colleges are using the pledge, but other initiatives have also emerged including the ‘Shanghai Consensus’ pledge organized by the China-Europe International Business School (CEIBS) in Shanghai, and for business leaders, the ‘Business Ethics Pledge’, which begins ‘I pledge allegiance, in my heart and soul, to the concepts of honesty, integrity, and quality in business.’ Unlike the other alternatives, the Business Ethics Pledge even allows you to sign electronically and start advertising your business on-line as a signatory.

As might be expected, such pledges have been particularly popular in North America and, to a lesser extent China and Taiwan, reflecting perhaps the focus in such cultures on individual level agency in business ethics. Those who subscribe to such initiatives clearly believe in the importance of personal integrity and of the power of individuals to make a difference. As the Business Ethics Pledge founder, Shel Horowitz says, ‘This is about changing the world! About creating a climate where businesses are expected to behave ethically, and where executives who try to drag their companies into the unethical swamplands find that nobody's willing to carry out their orders.’

We're not wholly convinced by this - especially since so many of the problems we're seeing today are not so much the result of individual miscreants (well, OK, maybe Bernie Madoff could have done with keeping to a decent pledge), but because of deeper level structural issues in financial markets, governance and remuneration systems, and regulatory problems. But still, when the focus of attention is so much on changing the culture of business, a good old fashioned pledge of allegiance may not be such a bad idea. After all, you've got to start somewhere. And it will certainly show those business schools that've been slow to get their ethics education together that their students mean business. Just not business at any cost.

Toronto’s 6th Timeraiser – The unlikely marriage of glamour and charity

So, what scene do we imagine when we hear the word ‘art auction’? Well, lots of money for sure, champagne, posh people, sophisticated conversations, a fair share of vanity – you get the picture. Now think of ‘charity work’: mmhh, not quite the same I guess. More like hard selfless toiling away facing tasks normally shun by many people, such as feeding the homeless, attending the sick, helping the unemployed etc.

Yesterday in Toronto one could see the unlikely union of both worlds. It was Toronto’s 6th Timeraiser Event which displayed once again what a creative, vibrant space can be created by imaginative civil society activists. The core idea is as brilliant as it is simple: The auction features some 30 works of local artists and the interested art collectors make their bid in form of committing time to volunteer for selected charities – rather than bidding money. For most pieces of art people were happy to bid up to 125 hours of their time! This is a heck of a lot of time if – like most folks at the event – you are in a full-on career in business.

So here we are: a great art gallery space in Toronto’s distillery district, nice drinks, great hors d’oeuvres, beautiful people, and of course, pretty cool artwork. While checking out which piece takes your fancy you also have a chance to talk to 40ish agencies which offered various volunteering opportunities to the potential bidders. In the end, it was not only a lot of fun to see who bids where and who gets outbid for which item but it was also an incredibly successful raising of time for charity: last year’s event raised more than 11,500 hours of volunteer time from the guests of the event.

What is great about the event is that it does not confine the ability to be charitable to the Trumps, Buffets or Gates’s of this world who can do so by virtue of their checkbooks. This is based on the one resource where all people are more or less equal: the 24 hours we have per day.

The other aspect from our perspective is of course this one: the entire event was made possible financially through the support of 10 Toronto based companies. As such, this represents a clever form of CSR. Having just published some research on how volunteering creates social capital, this event was a great ‘laboratory’ to observe from the point of view of a researcher.

‘Social Capital’ consists of three things: networks, trust and norms. Such an event creates new networks between the business-, arts- and charity-community which are beneficial for all parties involved. By showing that people working in business are willing to commit substantial chunks of their time to community work it also helps to address the trust issue. The latter being particularly valuable in a time where business has gambled away quite a bit of that trust recently… But it also helps to instill new norms and values into all actors involved. From our perspective this is particular crucial for business folks: having real time exposure to many of the pressing social needs and problems in our view has the potential to challenge a mindset which is all too often confined to just financial results and career advancement.

But most of all, it's a lot of fun! Or as one journalist put it: 'Good is getting really sexy!'