MyCIMA

Is it enough for MBAs to promise to be ethical?

Posted: Wednesday 27 January 2010 by Ana Barco
Replies : 3
Category: Business ethics, Law and regulation, Professional development
Keywords: business ethics, code of ethics, ethics, MBA, MBAs, qualifications
Ana Barco's picture

I wrote in my last blog about the current furore over accusations that MBA programmes lack of ethical content and code may have contributed to the current economic crisis.

It's interesting to see that some MBA students have responded to public opinion and decided to do something about it.  Students at Harvard Business School in the USA have started a web site (http://www.mbaoath.com/) where MBA students can sign an oath where they promise to behave ethically throughout their careers.  Originally expecting around 100 of their classmates to sign, they were stunned at the success and reach their initiative now has, with over 1800 signatories from around the world.

There is some controversy over how valuable an oath can be however.  A recent debate on the US based businessweek.com website, clarifies the opinion of those both for and against this code of ethics and their opinions are rather interesting and bring home the argument on both sides.

Many of the comments appear to back the need for finance professionals and those running corporations to behave ethically, however they say that unless someone is already an ethical person, the oath will not be upheld and will be meaningless.  

One of the main reasons for this is there is still a lack of accountability and no 'teeth' to ensure it is upheld.  This idea of accountability and independence could be one of the reasons that finance functions prefer to hire someone with a professional qualification over someone with a post graduate degree. This preference for professional qualifications was recently confirmed by research carried out by the CIMA Centre of Excellence at the University of the Bath School of Management.

One obvious reason why this may be is that someone belonging to a professional organisation, such as CIMA, must adhere to a code of ethics and behaviour or risk being thrown out.  This could make their position stronger in the job market because employers can be sure that the active members and students have an ongoing relationship with this side of the institute.  

Additionally (and slightly off topic) the requirement that our members complete ongoing professional development to ensure they are aware of best practice and changes in their fields surely also plays a part.  There doesn't appear to be the same onus on MBA or other masters holders to maintain a level of professional development and this may make some lose touch over the years. I wonder whether this also adds to the case?

I'm not sure what the answer is although it’s a noble effort for MBA students to try and address the situation.  It may be likely that once they reach the employment market that MBAs find conversely the code of conduct and CPD requirements of a professional qualification are increasingly attractive.  

CIMA has recently started an initiative to address this need, offering MBA graduates a fast-track method of embarking on our qualification.  We hope it will be of interest and helpful to those in the job market now finding that they would like to have that extra guarantee for employers that membership in a professional institute provides.  

I think one of the commentators summed it up perfectly when he says, "All things being equal, I prefer going to the surgeon who took the Hippocratic Oath vs. the one who didn't."  Although he was talking about the difference between those who signed the MBA oath and those who didn't, I think his comments apply perfectly when comparing the difference between an MBA and a professional qualification.

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More information on CIMA's new fast-track programme for MBAs is available at http://www.cimaglobal.com/cmga

Well, it's a start ...

Posted by Adrian Rutter on Friday 29 January 2010 11:06

Anyone can promise anything at any time, and sometimes even mean it. But post-promise behaviour will be influenced and driven by a whole host of things: peer pressure, personal values, rewards and penalties and a whole host more. What else are we doing to demonstrate the need for (and long-term benefits of) ethical behaviour?

At least getting ethics brought to the attention of people who by their actions show they intend to be future leaders and influencers is a start. But, for me, this demonstrates why talking of the CIMA qualification as "equivalent to a Master's" is understandable but deeply misguided. A Master's is a deeply respectable measure of learning; a professional qualification is a sign-up to a standard of behaviour as well as a measure of technical competence.

(Personally, I'd prefer going to a surgeon who showed they lived by the Hippocratic Oath even more than one who swore by it.) 

Is your standard of behaviour being compromised?

Posted by Ana Barco on Wednesday 03 February 2010 12:17

I wonder then whether many of us would consider the shift to closer collaboration that is taking place as we move to true business partnering as a potential conflict or risk to this standard of behaviour?

The feedback from the CIMA Centre of Excellence research pointed to a segment of finance professionals reluctant to move to closer collaboration with the business, fearful their independence would be compromised and more comfortable in the confines of finance and technical role. 

Finance people with a professional qualification seem to keenly value these standards and the place it has traditionally given them as independent and guardians of information in the organisation. Are these ethical standards really being challenged to a significant degree? Are you feeling these pressures in your day to day?
More available from the research report Finance Transformation: The Evolution to value creation. www.cimaglobal.com/financetransformation

I'd be keen to get views on this as I am preparing a roundtable together with the CIMA Head of Ethics in the autumn to discuss these issues in the face of finance function change and transformation.   

Facing up to real-world risks

Posted by Adrian Rutter on Friday 05 February 2010 14:12

Short answer: yes of course. It's easy to be ethical in isolation, it's far harder to stand your ground when circumstance or other people's wonky moral compasses are pressuring us to move away from what we know is right.

There's no money for this month's payroll and the MD wants you to sign-off on a cashflow forecast to get a short-term overdraft from the bank: are his sales projections bullish, optimistic, or downright fraudulent? The Housing Department wants you to sign-off the financial implications of a Cabinet report asking for grant funding to build desperately-needed homes; they give you the report at 2pm and want it cleared by 5pm to catch the grant deadline. Is your insistence on time to fully review the details beancounter-blocking a vital initiative or a proper exercise of your duty of care?

That's why this all links back to both CIMA's developing view of the "soft skills" management accountants need and our own professional support networks.

Writing codes and making promises in isolation are easy(ish). Making it all happen in the real world takes a professional peer-group, personal strength of character and adherence to a code of ethics because that's how we behave rather than because if we don't we'll be penalised (assuming someone actually gets caught).