The 'Eth' Word: Ethics Expert Speaks Up for Moral Capitalism

What do Gordon Gekko, Jack Welch and an ex-con who embezzled nearly $9m have in common? And no, it’s not a sneaking suspicion that greed is good. All three men have been or will be appearing at the Leadership and Ethics Forum (LEF).

The long-established club kicked off this year with a fresh aim – to challenge students to think seriously about business ethics, taking the issue with them out of the classroom and into their careers. The LEF wants to encourage not only thought and discussion but also impassioned debate. Post-Enron, that means hearing from people who have had time to consider the issues from behind bars as well as around the boardroom table, such as past speaker, Mr Welch.

Events lined up for this semester include ex accounting professor and reformed felon Fred Shapiro, an ethics film series, opening with Wall Street, and, of course, the grudge match debate against Yale.

Opening this season’s program was Stephen Young, of influential business ethics think-tank the Caux Round Table. Over fifty students came on Monday to hear him talk about Moral Capitalism — how business can promote progress and equality rather than enriching the few at the expense of the many. Mr Young argued that governments will step in with draconian measures unless we, the next generation of business leaders, take up the challenge of self regulation.

Amid his warnings, the former Assistant Dean of Harvard Law School also sounded a note of optimism. Quoting Adam Smith, Marx and Kant, he disputed the belief that moral behavior and capitalism are incompatible. He posited a system of ethics which might lead to capitalism making everyone better off (see side panel). Using this system, managers can develop a more sustainable model for capitalism by factoring long-term social and environmental as well as economical considerations into their decision-making.

Former law professor Mr Young used the case method to explore the themes during his 45 minute talk, which was followed by a lively 45 minute question and answer session.

Although this first speaker started the season on an erudite note, the cut and thrust of debating remains at the core of what the LEF is about. The club will be holding trials ahead of the showcase debates against the likes of Yale and KSG. For anyone terrified by the thought of delivering a witty, off-the-cuff speech in front of a baying audience – or who just fancies themselves as the next Tony Blair – it will also organize debating workshops.

At a time when only 19% of people believe that business is a prestigious profession, we at HBS have a duty to prove that we have a social as well as an economic bottom line. At the moment, we are no more trusted than lawyers, and if we do not act soon, we will be less credible than realtors!

Stephen Young’s Principles of Moral Capitalism

Companies wanting to practice the seven principles of moral capitalism will ask themselves the following questions:

* How does the company ensure honesty and fairness in its relationships with competitors?

* How does the company promote free and fair competition in its home market and in other countries in which it operates?

* How does the company achieve trust with competitors?

* How does the company manage compliance with the letter and spirit of national and international competitor-related rules?

* How does the company take action to generally promote the opening of new markets to free and fair trade?

* How does the company participate in the development of industry-wide standards for environmental management, promoting performance measurement and compliance?

* How does the company take action to prevent illicit competitive activities?

Ignoring these principles will lead to groups that have been harmed petitioning government to restrict business activity. Mr Young suggests that business can be better served through policing its own behavior.

September 19, 2005
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