What’s an Oath Worth?

Posted by Kelvin on Jun 7th, 2010 | no comments home title

Learn about the author. Kelvin is the Founder of MontaRosa. He has spent the last 20 years in executive search, most recently managing the global private equity practice at another leading executive search firm. Read more from this author

Graduation season is upon us and this year there is something new in the air: ethics pledges are becoming all the fashion in U.S. business schools. The pledge at Harvard Business School has gotten the most press though apparently only about 20% of students have signed some version of the “MBA oath.”

I’ve reflected on these oaths – variations have popped up at Columbia, Wharton, and other top schools – as my business is sourcing and developing talent. Is a candidate more viable and more valuable because she has signed one of these pledges?

The good news is that these oaths seem to be bubbling up from the students rather than being a top-down imposition from school administrations embarrassed by the number of their graduates who’ve exited their businesses in disgrace (and, in some cases, orange jump suits). While I don’t think that schools can make an unethical person ethical, they can help people understand how they can exercise their ethics in the complex world that executives must navigate. More important, they can stop teaching them – implicitly or explicitly –that pursuit of shareholder value justifies any behavior. It is interesting that it is at business schools that these oaths are popping up yet business leaders will come from engineering and other graduate schools as well. Is there something that has been in the curriculum that has encouraged unethical behavior? Or perhaps it is something in the water.

I am also in favor of students learning and acknowledging that their firms have an impact on the larger world and must be managed accordingly. Those externalities as economists call them are increasingly integral to business decision making. A cost for carbon seems like an eventual inevitability at this point, to pick one example. And the executives at BP, to pick a company at random, would have been well served to think a bit harder about the potential impact of their activities on the environment. The consciousness of the firm as part of a larger system in which both economic and non-economic values must be balanced will be absolutely critical for those who want to be our future leaders.

My fear is that the pledges will become meaningless: something that gets signed so that one can tick off another box in hopes of landing a great job. Business Insider has called the pledges “silly and infantilizing.” More meaningful, and what we at MontaRosa would probe for, are the actions that demonstrate a commitment to ethical behavior. It is great say you are ethical, but how have you demonstrated it? Ethics are not something to pull out when it is easy or convenient and any candidate should be able to come up with several examples.

And one must ask: what is the percentage of graduates who behaved ethically before these pledges existed? If the current signatories would have gone on to be upright, honest business people anyway, is the pledge worth much at all. Is there a baseline against which this can be measured.

So, what is the value of signing the pledge? For now, I’d say that the jury is out. Those who are in the vanguard – that 20% that has organized and supported the creation of the pledge – have demonstrated behavior that an employer should find appealing: starting and working for something shows initiative, drive, and determination. If the percentage of students signing rises to 50 or 60%, the value will be diluted. Results over time will matter: will those who walk this ethical path be as or more successful than their peers to feel no need to make a public declaration? Of course if the signers wind up doing the perp walk in a few years…

But for now, it’s one thumb up and the other hoping for the best.

Kelvin

Check out a recent Financial Times article on this subject.

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