This year’s graduating MBA Class will re-enter the workforce ten years after the onset of the greatest economic recession in a generation. While the stock market has since recovered, business leaders today face an increasingly complex web of ethical and legal challenges amidst rising public scrutiny of their actions. As members of the MBA Class of 2018 preparing to enter this world of uncertainty, we are reviving an effort launched by alumni who graduated into the depths of the financial crisis: to recruit our classmates to take an MBA Oath pledging to lead socially responsible and ethical careers.
In the spring of 2009, awash with recriminations that HBS graduates — and their unscrupulous approach of maximizing short-term financial returns — had played a special role in pushing the economy toward disaster, a group of graduating MBAs adopted the work of HBS Professor (and current Dean of the Business School) Nitin Nohria into a formal commitment to create value responsibly and ethically. If legal and medical professionals commit to a shared code of behavior, they argued, shouldn’t professional managers hold themselves to an equivalent standard? More than half of the graduating Class of 2009 took the Oath, and after receiving national press coverage, the movement spread to business schools around the world.
The MBA Oath posits the following core premise for HBS graduates: “as a business leader I recognize my role in society [and] will remain accountable to my peers and to society for my actions.” It makes no clear assumptions about the political ideology of its participants, nor does it prescribe particular management practices. It does, however, make explicit an undeniable reality that business decisions profoundly impact a wide range of stakeholders, and that responsible and effective managers should factor that reality into managerial decisions.
More than half of the graduating MBA Class of 2009 took the MBA Oath. In the intervening years, annual participation has fallen. Indeed, as markets recovered, the need to re-examine the role of business leaders in society may have felt less urgent.
While our MBA Class will enter a healthier economy than our predecessors from the Class of 2009, we believe the challenges our generation will face make it more important than ever to closely examine our roles as business leaders. Today’s business leaders face unprecedented levels of scrutiny for their actions. Research by the PR firm Edelman has shown that public trust in business has fallen dramatically alongside trust in other institutions. A growing majority of people believe businesses have a responsibility to be accountable not only for a firm’s profitability, but also for the human and environmental impact and externalities of their business decisions. Even recently, HBS found itself under the microscope again, with the publication last year of an exposé challenging the school’s role in educating business leaders to be morally complicit in the financial crash.
We believe all of this equates to an opportunity for our Class to re-examine what role business leaders should play in society. As the founders of the MBA Oath argued, U.S. schools award more than twice as many MBA degrees as the number of law and medical degrees combined. MBA graduates, and HBS graduates in particular, command a tremendous share of the country’s (indeed the world’s) economic and political resources. Given that tremendous influence, what type of responsibilities will we establish for how we treat our employees, customers, and other constituents? What commitment do we owe these groups as we accept positions of leadership?
At the moment, the Oath is a voluntary, opt-in grassroots initiative. Its simple tenets are applicable across any sector, from financial services to social enterprise. Perhaps one day an independent oversight body will hold MBA graduates accountable to a shared ethical standard, like in the legal and medical professions. However, as a start, we hope that the Oath will simply spark a conversation among our classmates about what their role as business leaders in society should be. We hope that, after having this conversation during their last month on campus, they continue to hold one another accountable as they begin to navigate their careers.
Our two years at HBS have equipped us with tools to become more effective as leaders and as managers. We call upon our classmates to use this time to also reflect upon what kind of managers we want to be – and what type of change we can achieve in the world with the tools we have acquired at HBS.
Evan Kornbluh (HBS ’18, HKS ’18) grew up in Michigan and, following a passion for tackling big challenges around economic development and global inequality, moved to Beijing in 2009 to work in China’s vibrant emerging nonprofit sector. Most recently prior to HBS, he managed fundraising for the education nonprofit Teach For China. In his free time he maintains an enthusiastic but mediocre Ultimate Frisbee career and continues his quest to find spicy Asian food in Boston.