Edmond J. Safra Center for Ethics

Harvard Business School

"This has been a wonderful year. The Program in Ethics and the Professions lived up to my idealistic expectations - a time of intellectual growth and excitement, and a year that has surpassed any I could have imagined when entering graduate school. Quite simply, it has changed the way I think about business, organizational behavior, and practical ethics."

Joshua D. Margolis, from Report on the Ethics Fellowship Year 1994-95

A longtime partner in the University's ethics initiative, Harvard Business School (HBS) participated in the development of the Ethics Center and provided significant early funding. Dean John McArthur, who led the Business School during the 1980s and early 1990s, embraced the importance of cultivating faculty leaders at each school who possess both substantial credentials in a professional discipline and a solid grounding in the study of ethics. With senior faculty member Thomas Piper, who coordinated HBS ethics activities during the critical early years, McArthur helped to establish a foundation for targeted initiatives in faculty development, research, and teaching that have received the continued support of his successors, Deans Kim Clark and Jay Light, as well as the students, faculty, and graduates of the School.

In the late 1980s, a gift from HBS graduate John Shad facilitated the development of "Leadership, Values, and Decision-Making," a module taught at the beginning of the first-year MBA curriculum. The module offered students an ethical framework to use as a guide for managerial decision-making, and examined the reasoning processes that are needed for sound judgment. Soon afterwards, the faculty began writing hundreds of cases about managers faced with difficult ethical choices. Two tenured faculty members who work primarily on ethics issues, Joseph Badaracco and Lynn Sharp Paine (both of whom spent a year in the Ethics Center), joined Piper to lead a core group of HBS faculty interested in ethics-related teaching, research, and case writing. A dramatic development in ethics study at the School was the establishment, in 2004, of "Leadership and Corporate Accountability," the first required, full-length ethics course in the School's history. Building on the lessons and experiences of the ethics module, the course focuses on the complex responsibilities facing business leaders today. Through cases about complex managerial decisions, the course examines the ethical, legal, and economic responsibilities of corporate leaders. It also teaches students about management and governance systems leaders can use to promote responsible conduct and looks at the role of personal values in leadership. Course leader Paine, with colleagues Badaracco, Piper, and Nitin Nohria, have modified the popular offering since its premiere, in response to students' requests for additional material on corporate governance and fundamental legal topics.

In addition to teaching the School's required course, members of the ethics faculty are involved in activities that range from elective courses to seminars to research and publishing. Badaracco, the John Shad Professor of Business Ethics at HBS, has taught ethics, strategy, and management, and is the senior associate dean and chair of the MBA Program. His research focuses particularly on leadership and individual decision-making. Questions of Character, his fourth book, examines lessons for leaders in works of serious literature. Paine, who has taught ethics electives in the MBA and executive education program, has served on the Conference Board's Blue-Ribbon Commission on Public Trust and Private Enterprise, which was formed in the wake of the 2002 corporate scandals. Her work focuses on the leadership and governance of companies that meld high ethical standards with outstanding financial results. Her book Value Shift: Why Companies Must Merge Social and Financial Imperatives to Achieve Superior Performance was named one of the best business books of 2003 by Library Journal and a top-ten business book by Soundview Executive Book Summaries. Paine also led the teaching group's effort to develop an instructor's guide and complete set of teaching plans for the required ethics course, which enables teachers at other schools to introduce versions of the offering.

Joshua Margolis is a former Graduate Fellow in the Ethics Center who has brought expertise in ethics to the School. Since joining the faculty in 2000, he has taught courses on leadership and pursued research on how managers can navigate ethical challenges within organizations. Margolis heads the Ethics, Law, and Leadership seminar, which sponsors lectures throughout the year. Topics have included: "Moral Deliberation in the Boardroom," "Does Law Shape Corporate Ethics?" and "Business Ethics in a Culture of Cheating." Ashish Nanda, a former Ethics Center Faculty Fellow, taught courses on ethics in professional service industries before moving over to the Law School's Program on the Legal Profession. Greg Dees, also a former Ethics Center Faculty Fellow, launched the School's course "Entrepreneurship in the Social Sector" in the mid-1990s and taught "Profits, Markets, and Values" in the second-year curriculum. Dees is now on the faculty at Duke University's Fuqua School of Business.

To cast light on the circumstances, policies, and structural problems that contribute to corporate scandals, the School began sponsoring workshops on corporate governance, leadership, and values. Each convene experts from business, academia, and government, who examine fundamental issues such as executive compensation, board effectiveness, capital market intermediaries, and management education and values. The sessions focuse on solutions-insights that help executives, corporate board members, legislators, regulators, and other decision-makers act more effectively as they tackle inherently difficult problems. The first such event culminated in a university-wide plenary session, organized in conjunction with the Ethics Center, that featured a keynote address by then Harvard President Lawrence Summers and a panel comprising the Deans of the Law School, Business School, and Kennedy School of Government, which was moderated by Dennis Thompson.

As the ethics faculty looks to the future, the "Leadership and Corporate Accountability" course presents a considerable challenge in the ongoing evolution of the ethics initiative. The offering's successful development required intense work by seasoned faculty drawn from throughout the School. Innovative organization and planning are needed to sustain the high-level of teaching the course requires and to support ongoing case development and research. The School is committed to finding a long-term strategy that will ensure the continued success of this exciting offering, support ongoing programs, and inspire continued progress in ethics scholarship at the School.