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

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 it's worse than the explosion of the twin towers," she said. "If we don't clean this up we're losing the very core sense of who we are; it's 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. That's ridiculous."

As an ethicist, Werhane said, "We can't exempt ourselves from blame here. [Ethics] has to be thought of as an integral part of management thinking, and if it isn't thought of that way, then I think we're going to see more problems.... Maybe we're 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. "There's no balance to corporate governance," she said. "There's no union balance here to raise the questions. We're not going to go back to unions. We don't 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 University's 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.