We teach ethics in two specific ways. First, every instructor at our business school is requested to include in his or her course, at least one instance from her or his own life of being confronted with an invitation to do something questionable. The goal of this first approach is familiarity, and the self-confidence it will produce to be able to say “No.”
Last year, we invited to our campus to speak one of the executives at Worldcom who is currently finishing his prison term in a half-way house. He was asked how could a company like Worldcom carry 100 million dollars of uncollectible accounts on its books without a write down. His answer was, “Because no one wanted to write down 99 million dollars of uncollectible receivables.” He had been asked by his superiors not to write down more than a small sum every year. Next year would be a better financial year, he was told—that was when the bigger write-down could happen. Besides, he thought, when is a debt really uncollectible? His willingness to go along with that was the first step in a much greater wrong—but I believe he might never have started had he said to his superior that first time, “Absolutely not. I’ll write down the larger number, I’ll write down what I think is right—I can’t believe you’d make such a request.” By having heard of this example, our students will recognize it when it occurs—long before it becomes impossible to extricate themselves, long before the time when a second error is required to cover up the first.
The second way we develop respect for principle through business education might seem a bit indirect—but I am convinced it is quite targeted to real results. It is the celebration of the non-financial rate of return from all we do. Many of our MBA students volunteer for community service during their years at Berkeley. There are many different options. No one compels our students to do this. But, on the students’ own, and under their own supervision, those who give more than 50 hours of community service of this or similar kind during their time in business school receive a special designation at graduation. Students can graduate without performing community service. But if they chose that course, they will have fallen short of what their colleagues expect of them, of what it means to be an MBA student at the finest public business school in America.
Our students will be taught to be the equal of any in technical skills. With those skills, they will create opportunity. And with their values, they will share what they create. They are the living answer to today’s question about what can be done to prevent future corporate scandals. The vast, overwhelming majority of businesses is honest, and produces value for our society. The counterexamples are few, though they are notorious. A company that gives one of our graduates a job gives him or her the chance to participate in our society and in our world. A job is the best welfare system ever invented. We have nothing to apologize for in studying how businesses succeed, because from that success comes a decline in every social pathology associated with unemployment and recession: child abuse, drug abuse, spousal abuse, decline of self-worth. Yet, our corporations can become better, by our becoming better. Business schools are not powerless to help; they need only reinforce what every one of us was raised to know: that you do not steal, that you do not deceive, and that humans should not be judged by the things they own but by what they give away.