Corporate oaths? Now even business students are expected to be ethical

Business people in fields tarnished by the financial crisis have a trust problem. So they’re doing what the ancients did when strangers cocked a wary eyebrow before sealing a deal. They’re taking oaths.

On both sides of the Atlantic, white- collar workers are weighing whether to pledge publicly that personal gain won’t come at the expense of moral principles. But whether oaths can succeed in fostering ethical cultures where laws and regulations have come up short is a matter of debate.

In American business, more than 1,400 individuals with a Master of Business Administration (MBA) degree have signed the newly created MBA Oath. Signatories promise, for instance, to look out for co-workers’ interests and to guard “against decisions and behavior that advance my own narrow ambitions but harm the enterprise and the societies it serves.”

In academe, Columbia Business School in New York and Thunderbird School of Global Management in Glendale, Ariz., have in recent years begun requiring all students to pledge honor codes that bind them to ethical standards throughout their careers. In Europe, a Netherlands Bankers’ Association panel recommended in April that all bank executives take an oath assuring, among other things, “I know my responsibility toward society.” [Editor's note: The first sentence of this paragraph was changed to reflect that Columbia introduced the requirement in 2006.]

Observers sense irony in this trend. Ancient cultures used the threat of a curse against oath breakers in part because they had no credentialing bodies to vouch for someone’s skills or character, according to Kevin Uhalde, a historian and expert on ancient oaths at Ohio University in Athens, Ohio. In early Christendom, an oath marked a covenant among parties, including God, who was thought to punish anyone who’d dare betray his pledge. To ensure conscientiousness, an oath was all people had.

Against this historical backdrop, expanding oath-taking in an age of advanced training and regulation is arguably akin to putting wooden wheels on a race car with hopes of improving performance. But Professor Uhalde wonders whether oaths might be undergoing a reinvention to serve a new, timely purpose.
“When modern people are turning to oaths, it seems to be because they want something higher” than present-day safeguards are providing, Uhalde said. “Apparently, professional degrees and things like that don’t count enough, so they want something more spooky or intimidating.”

But oath-takers believe they’re doing more than implying an appeal to the supernatural, or going on record as aspiring good guys. They hope they’re setting standards by which all in their fields – even nonoath-takers – will be judged.

The MBA Oath “is a positive statement by professionals who are concerned with reputation and who would like to see the MBA credential associated with responsible behavior,” said Christopher O’Connell, president of Leede Capital, a venture consulting firm in New York. “I see [the movement] as a group of people taking a stand and attracting other people to sign it – or just to behave, whether they sign it or not.”

Oaths aren’t entirely new in modern society. Physicians, lawyers, judges, engineers, elected officials, soldiers, police officers, and others take oaths as a means of engendering public trust. However, oaths are new for management, which came to be seen as a profession relatively recently in the 20th century. Likewise, bankers in certain specialties sign on to codes of ethics but take no oath as a precondition for lending.

For some professionals, oaths can inspire gutsy behavior. William Shadish, for example, kept his Hippocratic Oath in 1950 as a prisoner of war on the Korean Peninsula. When a Chinese commander overseeing his captivity was diagnosed with severe pneumonia, Dr. Shadish treated him and the man lived. The move wasn’t entirely altruistic: It was part of a deal to get medication for his sick comrades. US government officials called his decision treasonous, he said, but later they backed off and didn’t charge him after he explained the circumstances and what his oath meant to him.

“The oath is the oath,” said Shadish, author of “When Hell Froze Over: The Memoir of a Korean War Combat Physician Who Spent 1010 Days in a Communist Prison Camp.” “On the battleground, if we came across wounded men, we treated them. We didn’t shoot them [even if they were the enemy]. In my practice, I treated anybody who came to me. I didn’t care whether they had any money or not. I may not have liked some of them. Some might have been criminals. But I would treat them. I think that’s binding to a physician.”

Pledges not enough

Applying oaths to business, however, might require more than high-minded pledges. Otherwise, oath-takers could look a lot like former Enron executives, pledged to a well-crafted ethics code that was rendered meaningless because it was ignored, according to Patricia Werhane, a business ethicist at DePaul University in Chicago.

The MBA Oath “doesn’t have much [bite] unless the MBA students pressure each other after they get out [of school], by saying: ‘I remember you took the oath, and now look what you’re doing,’ ” Professor Werhane said. “There would have to be peer pressure.”

Holding people to their oaths can present challenges. Example: lawyers. Upon admission to state bar associations, lawyers take oaths in which they pledge to exceed what the law requires of them. But censure only occurs when a lawyer breaks a law, not when he or she violates a nonlegal tenet of an oath, according to Melvin Wright, chairman of the American Bar Association’s Standing Committee on Professionalism.

“We want [new lawyers] to aspire to a higher goal, a higher road,” Mr. Wright said. “So when we put these tenets in an oath ... we hope that they will take the wording of those oaths seriously as they become a member of a profession. But is it enforceable if they violate it? Probably not.”

Some in American business see no need for new oaths. At the American Bankers Association, codes of ethics required for those certified in certain specialties already constitute a type of oath, said Mark DeBaugh, a senior director at the ABA Institute of Certified Bankers. “Being a heavily regulated industry, we’ve got consequences for bad actions,” added ABA spokesman Jonathan Snowling.

But bankers elsewhere see new oaths as a potential means to reconnect their industry with traditional values, such as taking prudent risks and maintaining long-term client relationships. A bankers’ oath would help lenders acknowledge responsibilities in a world where one bank’s decisions can have far-reaching consequences, according to Peter Blom, CEO of British-based Triodos Bank.

“Bankers should have an obligation to take an oath or an ethical declaration,” Mr. Blom said in Boston at the June Summit on the Future of the Corporation. Banking “is a much more societal function ... than we maybe thought in the past. [An oath] can help get a different sort of culture in the banking community.”

Focus on the problem?

Even skeptics agree that oath-taking, in the spirit of Hippocrates, might in fact do no harm. But some worry the effort may not be especially helpful if it ends up delivering a false solution to a real problem.

“Oaths are definitely not going to solve the main problem that we have,” said Hope May, director of the Center for Professional and Personal Ethics at Central Michigan University in Mount Pleasant. “The problem is not at the intellectual level of understanding what one’s duties are. Actually carrying one’s actions out so that they conform to the rule or the oath is the problem.... Oaths may serve as some sort of reminder of what’s important, but to think that’s going to change behavior is naive.”