Can Ethics Be Taught?

By Rick Nason, PhD, CFA
Partner, RSD Solutions Inc.
 

As a Business School Professor I am constantly being asked to incorporate ethics training into my classes.  I refuse on the simple premise that to do so would be to teach the stupid people how to cheat!  I suppose I should explain.

The cry for the teaching of ethics in business school originates in the assumed lack of ethics in business – and more specifically a lack of ethics in finance.  As I will explain in several later blogs, I do not believe that finance people are any more or less unethical than the general population (more competitive yes, but being competitive is not necessarily unethical).

Ethics in business school has become the strict teaching of right from wrong rather than the more traditional academic examination of moral dilemmas.  Teaching people right from wrong is a fool’s errand in business school.  First off, by the time that someone has reached business school they already know right from wrong.  Furthermore, a person’s desire to act ethically has probably already been set by the time they begin elementary school, much less when they are twenty-something year’s old.

The next time you see a major ethical breach, ask yourself these questions:  (1) Did that person know what they were doing was wrong?  The answer is always going to be yes.  Ethical breaches in finance are only extremely rarely a case of moral ambiguity.  (2)  Would the perpetrator of the ethical breach have undertaken their actions if they knew that they were going to be caught?  The answer is always going to be no. 

Thus the teaching of ethics is not going to stop any of the breaches that we observe in the market.  Ethical people will always strive to behave ethically, and unethical people will always be finding ways to shortcut and cheat the system.

Now, the cry for the teaching of ethics in business schools generally comes down to developing case studies on what people did wrong in the past.  In my opinion this is just stupid.  If all we focus on is how to cheat the system, then all we are doing is teaching the stupid people (who are more likely to behave unethically) how to cheat the system.  In other words, ethical courses in b-school might very well be counterproductive.

Let’s focus on creating cultures of Ethical Leadership (see May 21, 2010 blog); recruiting for characteristics of Ethical Leadership and the rest will take care of itself.  Oh – and by the way – by doing so you will be prevented from hiring stupid people!