"If you had a lifetime exemption from speeding tickets, would you speed?..."
As was the question posed at the Sloan Innovation Period (http://mitsloan.mit.edu/mba/program/sip.php) week panel on ethics in the Financial sector by Professor Simon Johnson concerning the "too big to fail" banks. Although not everyone shares this fatalist view on the state of business, the analogy is a powerful one that provokes thought and question.
Many of my fellow classmates gathered this morning in Wong Auditorium to participate in open discussion with Professor Simon Johnson, The Ronald A. Kurtz Professor of Entrepreneurship; Ronald Logue, Chairman of the Board of State Street Corp; and James M. Stone, Founder & Chairman of Plymouth Rock Assurance and former professor at Harvard. The panel discussion was facilitated by Professor Richard Locke in hopes of encouraging open dialogue on the role of public policy, individual ethics and corporate culture in shaping the business world.
Some interesting points raised were as follows:
Mr. Stone used the framework of a pyramid to describe the contributing factors to the financial meltdown of 2008-2009. At the top of this pyramid are the crimes committed, of which are few but most conspicuous. Below that are individual ethical issues raised set in an environment of corporate culture that encouraged certain questionable behaviors. Underlying all this at the bottom of the triangle are public policies that set the foundation for what governs behavior. Although one may not be able to legislate ethics, the changing landscape of public policy can help to shape business conduct for the future.
Many of my classmates brought up the challenges of recognizing what is unethical at the moment, that although it is clear in hindsight, the gray areas are much harder to navigate at the present time. Mr. Logue offered the use of a litmus test, particularly to look at decisions in terms of fairness to the end customer as the a way of deciding how to act in a given situation.
What perhaps are the most thought provoking points brought up are the issues that ethics as a moving target, shifting principles that although are a part of most individual's way of conduct, aren't always aligned with corporate incentives. When the push to make money, when the pressures of the quarterly earnings become so intense, can there be a balance between prudent conduct and satisfying shareholders? Although everyone agreed that something should be done to change the current state, many of the panelists were pessimistic on if change will actually happen, particularly in the near future, given the complexities and international scope of the problem.
This, and many more intellectually engaging activities at the Sloan school is what has made life so exciting and fun for me. My name is Helen Ma, a 1st year student coming from Los Angeles, and I hope to share more of these anecdotes in coming months...
