Making the Institute Work

• This is a genuine partnership between the business community and some of the best minds in the business school community. We are bringing together not only some of the best minds in the academic community, but linking theory with practice in a new, innovative way that will benefit teachers, students and business leaders alike.
• The underlying problem is really in the joke: Tell someone that you teach “business ethics” and they’ll say “must be a short course” or “I didn’t know business had any” or “isn’t that an oxymoron like jumbo shrimp”. In all aspects of our society we don’t see “business” and “ethics” as going together. We expect there to be problems, scandals, ethical lapses, and disasters like we’ve seen recently. From the Teapot Dome scandal in the 1920s to the recent Italian debacle regarding Parmalat, both business as an institution and business ethics as an academic field have been partly defined by scandal. We need a change.
• We must come to see business and ethics as going together. To do that we have to, as Mr. Donaldson has said, “embed ethics in the DNA of business decision making”. When we think about business we need to think about all of the good things that business does as well as the scandals.
• This will be a challenging task. For the most part we see “ethics” as an “add-on” to business, not something that is inherent in the very process of business decision making. So, we need to discover the best practices of companies that weave ethics into the very fabric of their enterprises. And, we need to have a much more refined understanding of the subtleties of corporate decision making. For instance why don’t more employees and senior managers push back, question authority on ethical issues, and fix problems before they become scandals? When do compensation issues and ethical issues bump against each other and give conflicting signals about the best thing to do for a company? How should executives approach really difficult decisions for which there is no clear “right” and “wrong”? How can ethics be embedded in the culture of decision making? And, how do all of these questions fare when we think beyond our own borders?
• This new Institute is exciting, because we are going to bring together the best thinking of academics in the relevant fields, business leaders and future leaders, and business students, all of whom have a great deal to contribute.
• We’re going to start by Mapping the Terrain of interesting issues that have practical significance to business and business education, then we are going to document some of the best practices on these issues.
• This Institute will be successful if we can engage the academics, the CEOs and the students in a conversation about how to improve the connection between business and ethics. I don’t think there are any easy answers for these questions, but the goal is pretty straightforward. We desperately need a new conversation and a new narrative about business. We need to set a very high bar here: We need to make business institutions places in which our children want to live. That will require a substantial effort, and I am grateful to the Business Roundtable, the CEOs like Frank Raines and Hank McKinnel, the academics like Pat, Laura, and Linda and others, and the students all of whom will help us to make a difference.
• And now I would like the other Academic Advisors who are here today to join me and to say a few words – Laura Nash from Harvard Business School – Linda Trevino from Smeal College of Business at Penn State –Norman Bowie from the University of Minnesota, and Pat Werhane from The Darden School