Bogleheads

[Brewtownphilee]

Here's an NPR Planet Money story on some Ivy Leaguer who wrote an MBA oath:

http://www.npr.org/templates/s....=105077045

Of particular interest to me was one of the first lines, which says something to the effect of "I will make my financial decisions based on the common good...."

Do I want my financial advisor making decisions based on her idea of the "common good?" Will this "oath" make any positive change?
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"Fortunus Fortibus"

[Juan]

I would say it won't make a lick of difference.

The type of people who would abide by such an oath are the type of people that would have done so without it.

[saurabhec]

[nisiprius]

Subscribing to a code of ethics is what makes a professional a professional. Doctors have one. Accountants have one. Engineers (PE's) have one. There are at least 850 of them.

There can come a time in one's career when one must say to one's boss, "Yes, I am your employee and I have responsibilities to you, but I am also a doctor/accountant/PE and have responsibilities to my profession. So, I am very sorry, but, no, I will not do what you ask, because I am a doctor/accountant/PE and doctors/accountants/PEs do not do that."

Obviously of course anyone who does that is risking their job. Still, if it's a situation where the request clearly does violate a professional code of ethics, and the boss knows it, then the boss knows that it may not be easy to find any other doctor/accountant/PE to do it, either.

Equally obviously professionals violate their codes of ethics all the time. What the consequences, if any, are, varies by profession. And of course the code of ethics is as much about public relations for the professional group as about anything else.

Still, I think the MBA Oath is a good thing.

Does anyone really object to MBA promising to "understand and uphold, both in letter and in spirit, the laws and contracts governing [their] own conduct and that of [their] enterprise?" Or to "take responsibility for [their] actions, and I will represent the performance and risks of [their] enterprise accurately and honestly?"
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Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

[saurabhec]

[Ruprecht]

[Brewtownphilee]

My check is in the mail for a subscription as well.

I agree that a code of common values is a good thing in principle, I just have doubts that it can be effectively applied to (putting the many benefits of capitalism aside) a profession which is essentially based on profit and greed. And, just to clarify, I was originally speaking to the problems of advisors not acting in the best interests of their clients, rather than the housing bubble / credit crunch / current end of the world as we know it.
_________________
"Fortunus Fortibus"

[saurabhec]

[grumel]

Interesting. Professions as i understand it are typically about regulating narrow experts in fields where market solutions do not work very well.
Folowing from that, professionals usually have more power (to self regulate, among other things supply because no one elste understands what they do) and higher pay than regular often equally ore more qualified non professional jobs. Some professions do better than others at gaining that undisputed social position sometimes without obvious justification ( lawyer vs social worker for example).
From the MBAs persepctive, the idear to monopolice company managment in their hands makes a lot of sense. The oat is ok, but in the company managment case should not be limited to MBAs. People with other degrees can run companies as well and those should be subject to the same standards. A monopoly exclusion mechanism that often comes with such an oat is not necessary in this field. The possibility to do damage comes not mainly from information asymetries based on the professional education as it is the case with doctors or lawyers but rather with the position in a company.

[the weakonomist]

Were I to obtain an MBA I would gladly take an oath. There are many bad people out there who just happen to have MBAs however I don't think making them take an oath would have prevented anything.

Oaths are symbolic at best. Even if HBS, Wharton, Booth and all other b-schools increased ethical courses and introduced oaths it was the incentive systems in the actually economy that created these problems. Credit was cheap, and people were highly incented to put people into homes they couldn't afford.

I don't have the solution, but teaching more ethics in b-school and making someone take an oath will not create a measurable improvement in fraud prevention.
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Weakonomics.com 30% Personal, 60% Finance, 20% Stupid

[newbie001]

Your ideas are intriguing to me, and I wish to subscribe to your newsletter.[/quote]

I laughed out loud, even though I can't fully place the reference. Is that from the Simpsons? I know I've heard that before.

[mlebuf]

As someone who taught MBA courses for 2 decades, I think it's well intended but naive at best. A person's values are determined long before he/she enters grad school. Those who are ethical will behave ethically and those who are not will not unless they fear the consequences.

I just started reading a book entitled, "Satisfied Customers Tell Three Friends, Angry Customers Tell 3000." The main point of the book is that with the advent of the Internet, blogs, and networking sites, angry customers can do enormous harm to a business that doesn't take care of its customers. The Internet has given the customer a huge potential weapon that will likely bring about more ethical treatment than all the oaths in the world. As a case in point, think about all the people who began reading this forum and/or the M* Diehards forum and then fired their brokers.
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Best wishes,
Michael

Invest your time actively and your money passively.

[Ruprecht]

[qwe345]

The concept of an "MBA Oath" is a waste of time.

A strong value system in not built through the speaking of a symbolic oath. An oath can make it crystal clear what values a group of people would like to agree to or prioritize. However, it doesn't create values where there are none.

If people get through their MBA program and haven't figured out they should not lie, cheat, and steal, the problems began LONG LONG ago.

Values are important. It is values that make us the people we want to be. Here is a much better idea for future MBAs: Fire anyone who displays questionable ethics and a poor value system. Don't do business with people that have poor values.

[grumel]

[Brewtownphilee]

See, that's the problem I mentioned earlier. What if you don't agree with whatever the MBA's idea of the "common good" is? If he has values that address the common good, that's all wonderful, but how does that help my family and I maximize the pathetic salary I get for my job? Everybody talks about the common good, but not everyone can agree on a definition. And there's the rub: We end up with all these little MBAs running around thinking they're doing something good. The only other solution is to IMPOSE somebody's idea of the common good on the profession. I don't think you'll like the results of that either.
_________________
"Fortunus Fortibus"

[3CT_Paddler]

[grumel]

What exactly is your point Brewtonphile? Because not everyone agrees all the time which action is best for society, MBAs should rather intentionally use their power position to do things they think are bad for society as long as they maximice profits?

[Brewtownphilee]

I believe the results of MBAs acting under many different versions of the common good will be far worse than the current setup. If you think its hard to find a good financial advisor now, just wait and see what happens if you impose and enforce this code on the business world. So, I hope this code is just fluff. And, without devolving into a political discussion, the last thing I want in this world is another instance of somebody telling another person how to act. One of the great strengths of capitalism and the free market is that it harnesses people's natural tendencies to act in their own best interests. Is it perfectly efficient-no. But its a lot better than the other alternatives I have seen and/or studied.
_________________
"Fortunus Fortibus"

[nisiprius]

[johnjtaylorus]

Seems harmless.

The point of an oath wouldn't be to indemnify the public or guarantee perfect behavior.

It would be to impress upon the taker the gravity of the moment and instill a little professional responsibility.

[newbie001]

[Brewtownphilee]

[3CT_Paddler]

[Adrian Nenu]

Sounds more like marketing to me.

A crook is a crook and no amount of oaths will change behavior. I know this from personal experience.

Adrian
anenu@tampabay.rr.com

[Brewtownphilee]

Could you please elaborate on that experience? Thanks.
_________________
"Fortunus Fortibus"

[nisiprius]

[btenny]

Almost all big companies and most certainly Fortune 500 companies have a written complete Code of Conduct manual that applies to all employees and officers of the company. I know all my former employers had one and we all had to sign this document at least once every few years to say we read it and understood it's contents. We even had review classes on some of the sections in this manual. So in reality this "MBA oath" is redundant.

These Code of Conduct manuals say things like no stealing from the company, no insider trades, no stock trades from associated companies, no taking bribes from suppliers, no kickbacks, no outside business adventures, no leaking of insider information, etc. The also cover things like discrimination and how to handle harrasment issue and so forth. These are very significant programs at all big companies. These manuals take time to create and time to read. This is what good Human Resourse people do for some of their time. This manual also causes a lot of heartburn for some people because they regulate some things people would like to do in their spare time. But everyone signs it or walks. And don't think that people are not fired regularly becasue of violations of these rules, it happens.

But if a person has bad ethics no amount of signing and reading Oaths or Code of Conduct documents will stop them from doing bad stuff. The issues is how campanies watch for problems and manage the violations....

Bill

PS. Many of the "rules" in these manuals are really restatements of actual laws that people are not aware of but need repeating so people know them. This is what cost the previous HP CEO and associated people their jobs plus serious legal problems for unauthorized wire tapping.

[AimeeColleen]

Just got the (unofficial) German translation of the MBA oath up at the CareerMee blog and they're having a pretty good discussion there as well.