New York When Larry Estrada graduates from Harvard Business School next week, he’ll begin work at Goldman Sachs. He’ll do so only after taking an oath.
Estrada, 30, has joined about 150 fellow business school students and faculty worldwide to crusade for the acceptance of an MBA ethics pledge modeled on the Hippocratic Oath for doctors. The aim is to get as many as 6,000 graduates at 50 MBA programs to swear they won’t put personal ambitions before the interests of their employers or society.
Created last year by Harvard Business students to counter a public mistrust of business, the oath is being championed by Nitin Nohria, the newly appointed dean of the school. After the global financial crisis, Bernard Madoff’s $65 billion Ponzi scheme and scandals at Goldman Sachs, there has never been a better time for managers to rethink their role in society, said Rich Leimsider, director of the Aspen Institute’s Center for Business Education, in New York, helping to coordinate the movement.
Last year, 484 new MBAs at Harvard Business School took the pledge, inspired partly by an article by Nohria and Harvard professor Rakesh Khurana, in the October 2008 issue of the Harvard Business Review, calling for a code of ethics for managers. About another 1,500 took it at the Wharton School of the University of Pennsylvania and the Kellogg School of Management of Northwestern University and at other business schools, Leimsider said.
Not all Harvard Business students support the oath. About 45 percent of the graduating class of 886 last year didn’t take it, and a similar share won’t this year, either, Estrada said.
The oath is “the knee-jerk reaction by business apologists to the current financial crisis,” Justin McLeod, 26, a Harvard Business student, wrote in the Harbus, a school publication.
The problem with the oath “is that it is essentially cosmetic,” Krishna Mahesh, a 2005 Harvard Business School graduate, wrote in a February e-mail. “The danger of cosmetic change is that it masks the need for real, structural change.”
If Goldman Sachs’s leadership had followed the oath’s tenets, the company may not have entered into agreements to sell mortgage-backed securities that another client, New York investment company Paulson & Co., was betting against, said Khurana, the Harvard professor who worked with students in drafting the oath.
“If you have a law against murders, would all murders stop? No,” Khurana said. “But I think the risk of it would be mitigated and there would be more checks at a variety of points.”