Corporate scandals spotlight need for ethics training; business schools foster bottom-line mentality that sidelines issues of right and wrong, some say - Nation

National Catholic Reporter, August 2, 2002 by Patrick O'Neill

In times like these, when corporate scandals are rocking the nation, Jesuit Fr. Martin Calkins admits it's sometimes frustrating to teach business ethics.

"We've 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 center's 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.

Today's 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."

It's 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 don't think [ethics is] taught well at the business schools," she said. "I don't think that it's taught well at the law school. It's always a sidelined issue. It's a class that you take because you're required to take it, but it's never emphasized. It would be beneficial to have ethics emphasized in every single class that you take."

Maxwell, a Presbyterian, said she'd 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 doesn't 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 won't say it's for nothing.... I think we do have some influence, but that it's limited."

The business world is "badly in need of ethical leadership," Hanson said. "You can't 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, "you're 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.

"I'm 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 hasn't 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."