If ever there was any concern that business schools were producing corporate leaders with little regard for the consequences of their actions, that notion is surely now a distant memory.
Commentators point to the financial crisis of 2008 as the height of disregard for ethics and sustainability in business. And, perhaps, some of those responsible came from MBA programs (after all, nearly a third of CEOs at the world’s leading companies are MBA degree holders).
Stories of insider trading involving millions of dollars still hit the headlines, which do little to assuage the damage done to the state of ethics in business.
As Samantha Mullen, an MBA student at Endicott College in the US put it: “If you want to have the American Dream then you do whatever it takes to come out on top,” she writes in a Forbes blog post. “Unfortunately, this also means that there are many instances where ethical, or unethical, decisions will have to be made.”
But she also, quite rightly, points out that most MBAs are interested in finding ethical solutions to improve corporations, rather than turn to shady activities to get ahead in fast-paced and demanding functions.
Business schools have taken note; social responsibility is back on the menu. And a quick look at leading MBA programs today – and the activities of MBA students – reveals that ethics and sustainability are becoming more and more important.
Your average financier might have heard enough of the exciting spectacle that is sustainability at this stage, and lost interest with the subject altogether. But there are MBAs that use it as a starting point for financial and entrepreneurial success, too – which is an altogether more exciting topic.
Perhaps the most prominent example is the Hult Prize – a global business school competition designed to act as a catalyst for social ventures that aim to solve the planet’s most pressing challenges.
For team TIBA, this years’ entry from Aston Business School, the $1 million grand prize in start-up funding is an incentive, but little else. “We all have a shared path and vision, and we really want to positively give back to our community,” said Esmer Chifiero, an MBA team member from the school.
Another group of five MBAs from ESADE Business School used last years’ Hult Prize competition to launch a full-time social impact start-up. Their business, Origin, helps improve nutrition and financial inclusion in some of the poorest parts of India.
The opportunity to get involved in social responsibility was why the team chose to start their MBAs at ESADE instead of other schools, says Origin co-founder Monica Noda.
“We hadn’t pin-pointed social start-ups, but we all had the idea of getting into the social enterprise sector somehow. We were gravitating towards that purpose,” said Cesar Del Valle, another MBA co-founder.
Aston was one of the first business schools to sign up to the UN’s Principles for Responsible Management Education, a set of principles that binds universities’ commitment to social responsibility. In 2011, Aston even launched an MSc in Social Responsibility and Sustainability.
Other European schools have a similar commitment to social impact. ESADE has an Institute for Social Innovation – which is dedicated to social enterprises, leadership and NGO management, and corporate social responsibility. In December last year, ESADE launched its first Social Impact Investment Forum, allowing social entrepreneurs and investors to connect.
IE Business School has a similar Social Responsibility Forum, which has enabled more than 300 IE students to connect with peers and professionals related to sustainability and social entrepreneurship. Gwendoline de Ganay, an MBA student at the school who helped set-up the event, said it helped her kick-start a socially responsible career in entrepreneurship.
“I knew it was what I wanted to do after my MBA and it helped me identify key players in Latin America, where I wanted to work after graduation,” she said.
The change is evident on both sides of the Atlantic, too. At the Tuck School of Business at Dartmouth College, for example, MBA candidates help out organisations in the local community with volunteer work before term starts.
MBAs at the Wharton School of the University of Pennsylvania take part in the Wharton International Volunteer Program, with summer consulting projects to promote economic development and improved quality of life in developing countries.
Business schools are increasingly encouraging their students to work in such countries. Eduardo Costa, an MBA student at ESADE, utilized the schools' network to develop a start-up that helps tackle social and economic issues in small communities in Brazil.
He teamed up with three of his classmates to launch The Meaningful Institute. Their first project is in the small Brazilian village of Jua. "It's a poor village with a lot of issues. So the people on our program will use these business tools to try and come up with solutions to solve some of the problems in the community,” says Eduardo.
At Tuck, MBAs also get to be non-voting, non-executive directors at local non-profit organisations. A few students recently took part in the TuckBuilds initiative, involving a weeks’ work at Cover, a local NGO that assists low-income homeowners with urgent home repairs.
Yet, surprisingly, the majority of the world’s leading business schools aren’t featured at the top of MBA rankings on ethics – at least when compared to their place in traditional, full-time MBA rankings.
Notre Dame (Mendoza) is considered the most ethically responsible by Bloomberg BusinessWeek, with IESE Business School and Dartmouth Tuck also featured in the top ten.
Whatever the opinions these rankings form, one thing is for sure: ethics are firmly back on the agenda.
Industries should get ready. The next crop of business leaders is set to be the most socially responsible ever.