A recent survey of MBA students indicates that there is little or no attention devoted to business ethics in their current curriculum. To see the results of this astonishing lack of ethics in business education, one has to do little more than look to the ranks of rampaging corporate CEOs, whose excess-laden party appears to have finally gone too far.
All over the business world, shareholders are quivering with rage at the massive perks CEOs give themselves. These include so-called "golden hellos", getting paid large sums just for showing up, as well as "golden parachutes", obscenely generous severance packages.
What appears to most outrage investors is that corporate culture has made these compensation packages almost mandatory for CEOs, regardless of company performance. Among the most vivid examples of this are airline companies, many of which have cut jobs and salaries across the board for rank-and-file members while select executives live high on the hog.
This conflict between shareholders and CEOs has finally come to a head at GlaxoSmithKline, whose CEO, Jean-Pierre Garnier, is based in Philadelphia. According to the Economist, shareholders recently rejected an item that would have paid Mr. Garnier 35 million dollars over two years in the event of his departure, and would have made him and his wife three years older for the purpose of raising his pension.
While the rage of shareholders is utterly justified, whether or not it makes a difference remains to be seen. Generally, shareholders' votes on compensation committee reports are non-binding and therefore technically toothless. However, it appears unlikely that the cries of outraged investors can be ignored for long.
To truly alleviate this disturbing development in corporate culture, business schools must go directly to the source. Over 100,000 students graduate from business school every year in this country, and only one in five students participating in the recent survey felt that their school did "a lot" to address ethicial issues in business. This clearly needs to be remedied.
Competitive business schools naturally foster a me-first mentality. More focus on ethical business operations will go far in shifting the focus of tomorrow's corporate leaders from generous personal compensation to customer satisfaction and maximizing shareholder value.
