Our Wiring Isn’t Getting Any Better?!?!
June 22, 2016 ~ Written by: W.B. “Bud” Kirchner
With reference to my original blog on business people wiring where I delve into reports that many “continue to believe that engaging in illegal or unethical activity is part and parcel of succeeding” in certain business, let me share some (depressing) comments from a recent book “Makers and Takers: The Rise of Finance and the Fall of American Business” (http://www.ranaforoohar.com/) by Rana Foroohar.
While I will deal with the core topic of “financialization” in an upcoming series here are some points that will make you puke:
- 2011: A paper published in the Journal of Economics on conflict-of-interest issues in academia post financial crisis “concluded that most of the time the economist did not reveal possible conflicts of interest or private industry affiliations.”
- 2014: More than 50 percent of the private equity firms examined by the U.S. Security and Exchange Commission “had serious legal or compliance violations and were not showing fee income that rightfully belong to fund investors.”
- “One of the most corrosive effects of Chicago School thinking and teaching on American business education is that it detached the latter from its roots in morality and social responsibility, the very Calvinist foundations on which it was built in the late nineteenth century.”
And just when you think you’ve heard it all:
- 2015: A survey of hundreds of high-level financial professionals found
- “more than a third had witnessed instances of malfeasance at their own firms”
- “38 percent disagreed that the industry puts a client’s best interests first”
Is it safe to assume this is being addressed in academia??
Foroohar interviewed Nitin Nohria, Ph.D., the Dean of Harvard Business College, and found:
- “Classes that deal with morality and structure of finance or question our current system of capitalism are growing in popularity but are still few and far between.”
She also looked at a survey, taken after the financial crisis, of the world’s one hundred top business schools – most of them located in the United States. What she found is disturbing:
- “Only half of all MBA programs make ethics a required course”
- “Only 6 percent deal with issues of sustainability in their core curriculum”
All this “despite the fact that a large body of research shows that firms that focus on these issues actually have higher longer-term performance.”
I don’t think I need to draw the (obvious) conclusion from this. Nor do I need to express my opinion based on my original text. Do I?
About the Author: W.B. “Bud” Kirchner is a serial entrepreneur and philanthropist with more than 50 years of business success. He is not a scientist or an academic but he does have a diversified exposure to neuroscience, psychology and related areas. Generally speaking, the ideas he expresses here are business-angled expansions of other people’s ideas, so when possible, he will link to the original reference.