MY word is my bond”, is the motto of the London Stock Exchange. There is a reason that this notion is fundamental to the City. Without trust, there can be no business – on the most basic level, you have to be able to believe that the goods you have paid for will be delivered, and that you will be paid. That business needs to be ethical was also understood by Joseph Wharton, who founded Wharton business school in 1881. His aim was to create “pillars of the state, whether in private or in public life”. Business was seen as a good thing, something with social utility.<br /><br />Such sentiments might be met with a hollow laugh these days, when the global downturn is blamed by some on the greed and dodgy dealings of those in finance. But those who are currently taking MBAs are very aware of the ethical dimension of their subject. “We’ve known from the outset that public trust in finance generally, and scepticism of the City in particular are serious problems,” says Alex Ritson, who is currently studying for an MBA at the Cass business school in London. He and his colleagues, he says, often discuss the importance of ethics. “What keeps coming back is the importance of rebuilding the public’s trust in the City,” he says.<br /><br />It’s not just in London that MBA students are taking ethics seriously. Those at Harvard Business School (20 per cent, anyway) have taken a pledge to “serve the greater good”, and some British MBA students have signed up too, though without official endorsement from their schools. Course providers are also keen to point out that they take ethics seriously these days, pointing to the Corporate and Social Responsibility (CSR) elective which most provide. Others go a little further – at Nottingham, for example, 44 per cent of students take that course. In 2006 Oxford’s Said Business School launched a working group on CSR. Even the United Nations has got in on the act, setting up an initiative earlier this summer to promote the Principles for Responsible Management Education (PRME), whose aim is to “to inspire and champion responsible management education, research and thought leadership globally”. Most of the leading business schools have signed up.<br /><br />But ethics is nothing new for business schools, as Paul Palmer, professor of voluntary sector management at Cass, points out. He says that until the late 1960s sociologists or philosophers would teach ethics in business schools as a matter of course – but in the late 60s that disappeared, as the focus became more narrowly financial. There has been, says Palmer, “a focus on short-termism at the expense of longevity”. But the truth is that “if you don’t have trust, you don’t have a product”.<br /><br />Back in the days before business schools, Palmer says, people were apprenticed in a trade through the livery companies or worshipful companies, and behaving in the right way was built into the framework of their education, in the same way that medical ethics are part of medical students’ training and inform everything they do. Ethics classes are of limited use – doing things the right way is more important. <br /><br /><strong>VALUE JUDGEMENT</strong><br />That is the way that business schools should, and mostly do, teach ethics. It is not unknown for tutors to take a student to one side and have a quiet word if they question his or her values. The picture of business schools as palaces of free-wheeling, Gordon Gekko-esque capitalism is wrongheaded. Sean Rickard, director of the MBA programme at the Cranfield school of management, says: “I can’t really imagine that anyone really went into a room full of MBA students and said: ‘The secret of success is to behave unethically’”.<br /><br />The problem, he says, is not that businesspeople are unethical, but that the temptations became too great. “If somebody offers you a £5m bonus, then it is hard to stay ethical.” Part of the problem too, he believes, is the youth of some of those in the City. Younger people are more likely to be tempted by a chance to get rich quickly, he thinks. Cranfield students tend to be a bit older than those in some schools, and less gung-ho.<br /><br />Perhaps those promises of City riches are part of the problem. For some people, business has become synonymous with short-term wealth-creation – indeed, the major rankings of MBA courses look at the boost they will give to your salary over three years. With all that cash sloshing about, it is no surprise that the City, and by extension business schools, will attract greedy people. All the CSR courses in the world won’t eradicate unscrupulous behaviour or change human nature. The schools can only do what they always have done: tell their students that there’s more to business than money.