NoScams Oath for CEOs & Directors…. Hippocrates Comes to Management I was quite impressed and excited to read a news item that a group of students at Harvard University have come together to take an oath after completing MBA to uphold certain cherished values in course of their careers after MBA. A quick visit to their website www.mbaoath.org gives details of their efforts, the contents of their oath, and similar experiments in different institutes elsewhere. It is worth studying the oath as it tells the recognition and realization of the challenges that lie ahead of the managers under oath. I quote the oath from their website: Quote As a manager, my purpose is to serve the greater good by bringing people and resources together to create value that no single individual can build alone. Therefore I will seek a course that enhances the value my enterprise can create for society over the long term. I recognize my decisions can have farreaching consequences that affect the wellbeing of individuals inside and outside my enterprise, today and in the future. As I reconcile the interests of different constituencies, I will face difficult choices. Therefore, I promise: • • •
• • • • •
I will act with utmost integrity and pursue my work in an ethical manner. I will safeguard the interests of my shareholders, coworkers, customers, and the society in which we operate. I will manage my enterprise in good faith, guarding against decisions and behavior that advance my own narrow ambitions but harm the enterprise and the societies it serves. I will understand and uphold, both in letter and in spirit, the laws and contracts governing my own conduct and that of my enterprise. I will take responsibility for my actions, and I will represent the performance and risks of my enterprise accurately and honestly. I will develop both myself and other managers under my supervision so that the profession continues to grow and contribute to the wellbeing of society. I will strive to create sustainable economic, social, and environmental prosperity worldwide. I will be accountable to my peers and they will be accountable to me for living by this oath.
This oath I make freely, and upon my honor. Unquote
This is short version of the oath and full version is available on their website. This is a commendable initiative taken by the students to draw a parallel from Hippocrates Oath in vogue in the medical world. The cynics would like to question the use of oath in management in the cruel & ruthless world of business. An important point brought out by above website is that it is only after World War II that the medical schools adopted the oath which has worked as a conscience keeper during the course of medical practice. There are, of course, umpteen numbers of instances of negligence, greed and dumping of the oath. We regularly come across the “kidney racket” which highlights the dark side of the reality of medical profession like every other profession. However, by and large it has pricked the conscience of the doctors always even though there have been thick skinned ones who continue to over ride the same. My blog titled “Value Management Deficiency Syndrome”, dated March 5, 2009 had addressed the deficiency in management of value systems and need to sustain & uphold shareholders’ values. A large number of organizations suffer from ailment I call "Value Management Deficiency Syndrome". They fail to identify, monitor and prevent slippages of certain core values of the organization. While success becomes a habit, so does addition of some "virus" to kill the organization. It is a slow process. But once the critical mass is reached it is difficult to prevent damages to the business and stakeholders. Satyam Computers was the case in point.
Each organization can create an early warning alert system to monitor the health of the key parameters to that there is no deficiency in managing the values. The global meltdown has been due to total dumping of values and short term approaches to beat the system and achieve the corporate as well as personal goals. I am glad that Harvard students have taken initiative to create GenNext managers who would think twice on their commitment to the oath before any breach occurs. How appropriate that only Hippocrates can come to rescue the sick from the ailment of value management deficient syndrome which has plagued our global society in every walk of life. The above oath is aimed at “Responsible Value Creation” by these Harvard managers. Some of my concerns expressed in my blog on “VMD Syndrome” get addressed in this approach as far as morality issue is concerned. I had also referred to Madoff case which in fact triggered the students at Harvard to think of oath. No doubt it is a slow process to change the society. However, a beginning has been made and it would be a few generations later that we may see the significant contribution from these pioneers provided this movement can be sustained to reach critical mass for effectiveness. Our leading management institutions may like to join such a movement and initiate the change process. Our politicians and members of the judiciary are required to take oath (which is perhaps followed more in breach than in compliance). Nevertheless, can industry CEOs and members of the board of directors of listed companies at least, take an oath and live up to that commitment and make difference to the society? What about the chartered accountants and auditors who are charged with responsibility of ensuring
compliance with the norms laid down by the law? Can SEBI/ Company Law Board evolve a model code of conduct which becomes the oath? What about the top bureaucrats, ambassadors, secretaries in the government? If they get committed to oath, may be they can stand up to political bosses. Society depends on them for upholding the values. Can they commit themselves to some shared values? Today, we face situations of whistleblowers getting killed because they exposed the wrongdoings. There is no protection for those who want to follow the path of accountability to society. Why condemn politicians if industry managers can not practice what they believe. Of course simple answer is that the industry managers have to manage the political environment and hence what they do is in the best interest of the shareholders. If they get committed collectively to an oath they may be able to find alternatives. Let us not worry about a few exceptions which will always be there anywhere. Would medical professionals the world over agree to do away with Hippocrates Oath just because some of them violate the same? Corporate Social Responsibility (CSR) can not end with running a charity trust for taxation benefits or a school for children of employees. Enron, Satyam and Madoff cases, along with perhaps whole lot of companies who may have gone bust in last one year, are eye openers for the world of business which has no boundaries due to globalization. Morality also does not have geographical boundaries. Can IIMs, CII, FICCI, Administrative Staff College of India and SEBI come together to take initiatives & galvanize this movement in India and give muscle to the corporate governance? Political governance will follow only if corporate world shows the way. The lack of governance has been sustained only because the business community has directly or indirectly supported the system for their own survival. Some one has to break the mould. The students from Harvard may be the crusaders and may have shown the way. Vijay M. Deshpande Corporate Advisor, Strategic Management Initiative Pune July 17, 2009 Scroll down for my other blogs Or Visit www.strami.com