Harvard ethics pledge goes viral; ethics and investments examined in reports from New York and London; Australian polls shows perceptions of ethics in business plummeting; British CEO takes a novel, if controversial, approach to finding out what his employees really think

VARIOUS DATELINES
Last week’s business headlines included a range of stories involving ethics. Among them:

• Harvard Business School’s ethics pledge, detailed in last week’s edition of Newsline, assumed new dimensions during the week as the oath apparently resonated and went viral, according to BusinessWeek. Article author Anne VanderMey writes: “Something about the project struck a chord. Maybe it was the desire to distance themselves from B-school villains of the financial crisis, or an effort to get a head start on their future careers in the nonprofit world, or maybe it was genuine idealism. But whatever the cause, the oath has quickly taken on a life of its own. Within weeks, more than half of Harvard’s class of 2009 had signed. Perhaps more interestingly, it didn’t stop at Harvard Yard. MBAs around the world forwarded the oath to friends, gathering nearly 800 signatures to date. Max Anderson, the 2009 Harvard graduate who came up with the idea, said he received requests from people at more than 25 schools around the world about bringing it to their campuses.”
• The Wall Street Journal reports that two companies are suing Lehman Brothers Holdings Inc. for about $190 million, charging that the bankrupt investment bank used deceptive sales practices to market a risky security. The firms, Western Digital and Ceradyne, say they are stuck with worthless investments. Spokespeople for all three parties declined to comment when contacted by the Journal.
• Last week marked the 25th anniversary of the mainstream introduction of ethical investment houses in Britain. The U.K. Guardian reports that while proponents of ethical investing at the start said that investing in companies with a strong ethical and environmental foundation would produce better returns over the long run, investors now are wondering whether those ventures are living up to their initial promise. The Guardian cites various studies showing lower-than-average returns for many ethical funds. Proponents note that there is some evidence that these funds could be more stable in turbulent times because investors are less likely to flee them during a downturn.
• A survey in Australia finds that country’s nurses rated at the top of the list of professionals regarded as the most ethical and honest. The survey, titled the Roy Morgan Image of Professions, found that overall there was a large number of firms falling in the public’s estimation, the biggest dip recorded in the history of the survey. Business executives fell sharply in measures of perception of their ethics, according to a summary of the poll in the Sydney Morning Herald, as did directors of publicly held companies. Administrators of the poll say the economic downturn appears to be the major factor in plummeting confidence in the ethics of professions in Australian. Car salesmen were at the bottom of the list, followed closely by ad executives and newspaper reporters.
• Mangers try hard to find out what their employees are really thinking but are not always successful, reports the Financial Times in a profile of a northern England manufacturing firm’s CEO, who went straight to the source by masquerading as a low-level employee for two weeks. A camera crew followed the CEO, who told co-workers that a TV station was doing a report on what it was like for a clerical employee who had to take a physically demanding maintenance job in order to earn a living. CEO Stephen Martin avoided being recognized because he was new to the job, grew a beard, and often wore protective clothing that obscured his appearance. Martin concluded that management often does a poor job of communicating and expects too much of employees. While the effort was generally regarded as well intentioned, the Management Blog, a publication of Britain’s Chartered Management Institute, notes that there is some concern about the ethics of a boss going undercover, with some readers praising the effort but others noting that it is not entirely up front.

Sources: BusinessWeek, June 12 — Sydney Morning Herald, June 12 — Wall Street Journal, June 10 – Guardian, June 8 — Financial Times, June 8 — Management Blog, June 8.

For more information, see: Related Newsline story, June 8 — Related Newsline story, May 18 — Related Newsline Commentary, May 4 — Related Newsline story, Dec. 22, 2008 — Related Newsline story, Nov. 24, 2008 — Harvard MBA Oath website.