Corporate scandals spotlight need for ethics
training
By PATRICK ONEILL
In times like these, when corporate scandals are rocking the
nation, Jesuit Fr. Martin Calkins admits its sometimes frustrating to
teach business ethics.
Weve been at this for 30 years as a scholarly group,
and we just seem to be getting nowhere, Calkins, who teaches at Santa
Clara University, said he told a colleague recently. There seems to be
just one scandal after another.
The recent revelations of malfeasance at corporations such as
Enron and WorldCom have shined a spotlight on the role ethics is -- and is not
-- playing in the business classrooms that are training corporate
professionals.
Business schools, both undergraduate and graduate, usually have a
required ethics course for students, but not all schools make such training a
priority. At Santa Clara, a Catholic institution, ethics is not an aside. Since
1985, Santa Clara has been home to the Markkula Center for Applied Ethics,
which offers integrated ethics training throughout the campus. The
centers 11-member staff also does consulting for private corporations and
leads research efforts in ethics.
Headed by Kirk Hanson, a Catholic who was a consultant on the U.S.
bishops pastoral on the economy in the 1980s, the Markkula Center is
recognized as a national leader in the field of ethics.
Todays problems point to a need to increase the available
resources in the field of ethics. Hanson is encouraging the establishment of
regional centers, similar to Markkula, that could be used to help both schools
and corporations place greater emphasis on ethics training.
Like winning the lottery
Hanson said he disagrees with President Bush, who has placed blame
for the recent scandals on a few bad apples in the business world.
The problem is cultural and systemic in scope, he said. Obscene
salaries for CEOs, which usually include stock option compensation packages,
have in some ways changed the rules. Many executives now see business as
a vehicle through which to achieve personal wealth, Hanson said.
Being named a CEO today is like winning the lottery, and fabulous wealth
comes with getting to be a CEO.
The culture is saying, This is your chance to get
rich, and [CEOs] ought to be thinking, This is my chance to
serve. Being a CEO is a noble calling. This is not simply a self-centered
opportunity.
Its not only CEOs who see business as a path to
self-enrichment.
Victoria Lee Maxwell is a 26-year-old Santa Clara student earning
dual degrees in business and law. Maxwell enjoyed the ethics course she took
under Calkins, but she thinks ethics training is lacking and undervalued in
business education.
I dont think [ethics is] taught well at the business
schools, she said. I dont think that its taught well at
the law school. Its always a sidelined issue. Its a class that you
take because youre required to take it, but its never emphasized.
It would be beneficial to have ethics emphasized in every single class that you
take.
Maxwell, a Presbyterian, said shed like to earn about
$70,000 a year as a business lawyer and places a high premium on being
ethical.
Most MBA students have goals such as career advancement and
earning a better salary, she said. I would say the average student
doesnt care that much about ethics, and I think that definitely is one of
the main reasons why we have such shady business practices today, Maxwell
said.
Ethicists have limited influence, Calkins said. Decision-making is
done in the workplace. Businesspeople are the ones that have to actually
make the decision about right and wrong, not the ethicist, he said.
So I think our impact is limited. I wont say its for nothing.
... I think we do have some influence, but that its limited.
The business world is badly in need of ethical
leadership, Hanson said. You cant look to the church to
fill that ethics void. Not only does the church not know much about
economics, but its own leadership is absolutely bereft of credibility, he
said.
With Boston Cardinal Bernard Law, the darling of the
right, and Milwaukee Archbishop Rembert Weakland, the darling of
the left, both sullied by the sexual abuse scandals, youre
not left with anybody of credibility, Hanson said.
John Boatright, who holds an endowed chair in business ethics in
the graduate business school of Loyola University Chicago, said the current
scandals have to do with problems stemming from the pace of change in the
corporate world, not an ethics void.
Im a little bit uncomfortable with trying to cast this
as a matter of ethics because this is not something that ethics can easily
prevent, said Boatright, who also serves as executive director of the
Society for Business Ethics. We have to have a good system in place first
of all. I think the main role of ethics is first of all to help us build the
system.
Business, says Boatright, is a rapidly moving
field and regulation, so to speak, can only fight the last war.
There will always be clever lawyers, accountants and financial
people who will always put together innovative mechanisms where
regulation really hasnt caught up, Boatright said. I think
there will always be a kind of window of opportunity where one can be
technically in conformity with the law, but do something that probably is going
to be illegal within a few years.
Patricia Werhane, professor of business ethics in the Darden
Graduate School of Business at the University of Virginia, said the recent
corporate scandals will ultimately have a more severe impact than the Sept. 11
terrorist attacks.
I think its worse than the explosion of the twin
towers, she said. If we dont clean this up were losing
the very core sense of who we are; its a moral explosion, a moral
collapse.
Missing the balance of unions
Werhane said literally hundreds of lower-level executives knew
about and chose to ignore the problems with the books at Enron and WorldCom.
Accounting giant Arthur Anderson represented the gold standard when
it came to ethics, she said. Anderson even poured $5 million into an ethics
program that taught business schools how to integrate ethics into the
curriculum.
We had one whistleblower at Enron, she said.
There had to be hundreds of people who knew what was going on there. We
have no whistleblowers at WorldCom. Nobody blew the whistle there. Thats
ridiculous.
As an ethicist, Werhane said, We cant exempt ourselves
from blame here. [Ethics] has to be thought of as an integral part of
management thinking, and if it isnt thought of that way, then I think
were going to see more problems.
Maybe were not encouraging
our students to be independent enough; to step out and say, Wait a
minute, this is the wrong thing.
Werhane said the demise of unions has contributed to the problem.
Theres no balance to corporate governance, she said.
Theres no union balance here to raise the questions. Were not
going to go back to unions. We dont like unions much in this
country.
For some Catholic business schools, the responsibility for
teaching ethics is to outsource it to the philosophy department or
theology department and have someone come in to the business school and teach
it as an outsider, said Catholic ethicist Kenneth Goodpaster, who holds
an endowed chair in business ethics at St. Thomas University in St. Paul.
While Catholic educators have strict guidelines -- in the form of
a mandatum -- when it comes to teaching theology, the same kind of
mandate is not in place to guide Catholic educators in other disciplines.
Goodpaster said the spirit of Ex Corde Ecclesiae, the 1990
papal document that called for a strengthening of Catholic identity in Catholic
higher education, suggests that Catholic universities that have business
programs would want to give special emphasis to ethics. I think that almost
goes without saying.
St. Thomas is also home to the Center for Ethical Business
Cultures, an independent, nonprofit organization that was originally founded in
the mid-1970s as the Minnesota Center for Corporate Responsibility. The center
is made up of about 130 corporations from the Twin Cities and Upper
Midwest.
Elizabeth Kiss is director of Duke Universitys Kenan
Institute for Ethics, an interdisciplinary center with a staff of seven that
provides campus-wide ethics training. Kiss says in recent years she has
observed more of a bottom-line mentality, among students,
especially business students.
Recent studies of academic integrity have shown an increase in
cheating among college students, Kiss said, and business majors are among
the ones who cheat at the highest rates, she said. There is a
bottom-line mentality that is fostered in a lot of business
education.
Still, Kiss said, There is a hunger for serious discussion
of ethics among students. For Kiss, there is different bottom-line:
You ignore ethics at your own peril, she said.
Patrick ONeill is a freelance writer living in Raleigh,
N.C.
National Catholic Reporter, August 2,
2002
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