Business students to tackle ethics issues

By D. Lyn Hunter, Public Affairs

19 September 2002 | In the coming months, graduate students at the Haas School of Business will be going to prison. Not for breaking the law, but to learn from white-collar criminals who, because of their shady business practices, are now behind bars.

“From an educational point of view, theoretical classroom discussions about corporate responsibility and ethics are not enough,” says Kellie McElhaney of the Haas School. “Students need to get out and see what can happen in the real world.” She believes that hearing inmates detail their downward slide from respected executives to ethically challenged criminals will have a lasting impact on students’ careers.

These field trips are just one of several new elements incorporated into the business school’s recently enhanced “Socially Responsible Business Leadership Initiative.” As its executive director, McElhaney will implement a number of planned activities and coordinate the school’s already established program in this area — one of high-profile interest to many as corporate scandals command increasing public attention.

“The country and world are demanding to know if recent lapses in business ethics are symptomatic of a system-wide failure,” says Tom Campbell, the Haas School’s new dean. “Our great universities and business schools must, first, play a major role in answering this question and, equally important, lead the effort to find ways to correct the problems.”

As part of the initiative, McElhaney will teach two new courses on social responsibility: an introductory class for undergraduates, and one on corporate strategies for MBA students.

She will also form a project-oriented class in which MBA students will work with companies to develop corporate responsibility programs. It will resemble one she organized at the University of Michigan, where she taught for nine years before coming to Berkeley.

“There, we worked with Hewlett-Packard, Ford, Ben & Jerry’s, and several other corporations,” she says. “Because it was so successful, I think a number of these companies will follow the program to Berkeley.”

The initiative also places great emphasis on companies’ commitment to environmental responsibility. One planned course will be developed in partnership with the Rocky Mountain Institute, a Colorado think tank whose work has contributed to the nascent school of thought known as “natural capitalism.” Less a doctrine than a set of principles, it encourages companies to consider environmental as well as financial interests when making business decisions.

“This may sound far-fetched, but it can be done,” says McElhaney. “Responsibility can be woven into core corporate strategies. Com-panies can develop ways to sell more goods and promote positive social change at the same time.”

To make natural capitalism work, though, a company’s performance (which determines its stock value) must be measured not just by quarterly financial returns, she says, but also on its long-term social and environmental successes.

The initiative’s other planned and ongoing activities include an expanded lecture series on ethics, featuring speakers such as Enron whistleblower Sherron Watkins; the establishment of a required MBA course on “Global Business Citizenship”; the National Social Venture Competition, which rewards real-world business plans that generate both financial and social investment returns; and the development of an advisory board for the initiative.

Though she started her career in the banking industry, McElhaney — wanting to have a more positive impact on the business world — switched to academia. From 1993 to 2002, she taught at the University of Michigan Business School and was managing director of its Corporate Environmental Management Program.

“I felt I could do more good through teaching, there is such power in education,” McElhaney explains. “I’m with these students for only a short time, but, using what they’ve learned here, they can go out and revolutionize the way corporations conduct themselves.”

The Socially Responsible Business Leadership Initiative is supported by gifts from actor and corporate philanthropist Paul Newman and Haas School alumnus Michael Homer, chairman of Kontiki, a software management company.


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