To change the banks, we must first change the business schools

Get'em when they're young.

The Libor scandal which has dominated the headlines for the past few weeks is just the latest in a long line of bad press for the banks since the financial crash. While policy makers and commentators have focused on the need for reform of the sector, little attention has been paid to the role of education.  But if we want to avoid repeating the mistakes of the past, business leaders of the future need to develop skills in responsible management and a real awareness of the world around them.

Depending on who you listen to, the answer to the problems caused by the financial system is more regulation, less regulation, renationalisation of the banks or sweeping EU powers, to name just a few. These ideas may be different, but at their heart they have one thing in common – the focus on reforming the structure of the banking system.

Although measures like splitting high street banks from their investment counterparts would go some way to protecting the public from reckless banking behaviour, it does nothing to address that behaviour itself. How can we expect to change the greedy, self-interested culture of banking and prevent further scandals if we do not change the bankers who run the system? More importantly, how can we expect to tackle bigger problems that this culture leads to, such as business activities which have a damaging environmental, social and human rights impact?

Building a more stable, ethical and responsible capitalism requires addressing the rotten foundations on which the upper echelons of the business world are run – management and business education. This requires a massive fundamental mind-shift in the lecture halls of our universities and business schools.

For too long these institutions have remained an undiagnosed part of the problem. Consider business school rankings, used by the business leaders of tomorrow to choose where to study for an MBA - the main factor in the most prominent rankings is how much a graduate from that school earns. Not the quality of teaching. Or the grades students achieve. Greed and the pursuit of profit, regardless of the negative impact a business’s activities might have, are built into the system from the very start.

Since 2008 the UN Principles of Responsible Management Education initiative has aimed to inspire and champion responsible management education, research and thought leadership. Aston University, one of the earliest signatories to these principles, has been embedding ethics, responsibility and sustainability issues into the curriculum and aims to ensure that all students will be social responsibility and sustainability literate by the time they graduate. This includes setting up a range of courses in this area and requiring all students going on placements in business to question how companies are addressing these issues. Since then more and more business schools in the UK and worldwide have been adopting the principles.  Almost half of the UK’s business schools have now signed-up.  Further progress was made at the recent Rio+20 conference. Importantly, the major accreditation bodies made commitments to change their requirements in ethics, social responsibility & sustainability and there is a new initiative setting out additional benchmarks for management education.

But there is still a long way to go. We must ensure all of our business leaders are educated to consider the economic, social and environmental impact of what they do and integrate these issues into their business’ core activities. Business should aim to be not the best in the world, but the best for the world. Only then can we avert future business scandals like those of the last few weeks, and more importantly, future financial crises like the one we have been suffering over the last few years.

Carole Parkes is co-director of Social Responsibility & Sustainability at Aston University.

Photograph: Getty Images

Carole Parkes is co-director of Social Responsibility & Sustainability at Aston University.

Photo: Getty
Show Hide image

Jeremy Corbyn's opponents are going down a blind alley on tuition fees

The electoral pool they are fishing in is shallow – perhaps even non-existent. 

The press and Labour’s political opponents are hammering Jeremy Corbyn over his party's pledge/ambition/cruel lie to win an election (delete depending on your preference) to not only abolish tuition fees for new students, but to write off the existing debts of those who have already graduated.

Labour has conceded (or restated, again, depending on your preference) that this is merely an “ambition” – that the party had not pledged to wipe out existing tuition fee debt but merely to scrap fees.

The party’s manifesto and the accompanying costings document only included a commitment to scrap the fees of students already in the system. What the Conservatives and Liberal Democrats are claiming as a pledge is the following remark, made by Jeremy Corbyn in his Q&A with NME readers:

“First of all, we want to get rid of student fees altogether. We’ll do it as soon as we get in, and we’ll then introduce legislation to ensure that any student going from the 2017-18 academic year will not pay fees. They will pay them, but we’ll rebate them when we’ve got the legislation through – that’s fundamentally the principle behind it. Yes, there is a block of those that currently have a massive debt, and I’m looking at ways that we could reduce that, ameliorate that, lengthen the period of paying it off, or some other means of reducing that debt burden. I don’t have the simple answer for it at this stage – I don’t think anybody would expect me to, because this election was called unexpectedly; we had two weeks to prepare all of this – but I’m very well aware of that problem. And I don’t see why those that had the historical misfortune to be at university during the £9,000 period should be burdened excessively compared to those that went before or those that come after. I will deal with it.”

Is this a promise, an aspiration or a target? The answer probably depends on how you feel about Jeremy Corbyn or fees policy in general. (My reading, for what it’s worth, is that the full quote looks much more like an objective than a promise to my eyes but that the alternative explanation is fair enough, too.)

The more interesting question is whether or not there is an electoral prize to be had, whether from the Conservatives or the Liberal Democrats, for hammering Labour on this topic. On that one the answer is open and shut: there really isn’t one.

Why not? Because the evidence is clear: that pledging to abolish tuition fees largely moves two groups of voters: students who have yet to graduate and actually start paying back the fees, and their parents and grandparents, who are worried about the debt burden.

There is not a large caucus of fee-paying graduates – that is, people who have graduated and are earning enough to start paying back their tuition fees – who are opposed to the system. (We don’t have enough evidence but my expectation is that the parents of people who have already graduated are also less fussed. They can see that their children are not crippled by tuition fee debt, which forms a negligible part of a graduate’s tax and living expenses, as opposed to parents who are expecting a worrying future for their children who have yet to graduate.)

Put simply, there isn’t a large group of people aged 21 or above voting for Corbyn who are that concerned about a debt write-off. Of those that are, they tend to have an ideological stance on the value of a higher education system paid for out of general taxation – a stance that makes it much harder for the Conservatives or the Liberal Democrats to peel those votes off.

The whole thing is a bit of a blind alley for the parties of the centre and right. The Tory difficulty at this election wasn’t that they did badly among 18-21s, though they did do exceptionally badly. With the exception of the wave year of 1983, they have always tended to do badly with this group. Their problem is that they are doing badly with 30-45s, usually the time in life that some younger Labour voters begin to vote Conservative, largely but not exclusively because they have tended to get on the property ladder.

Nowadays of course, that cohort, particularly in the south of England, is not getting on the property ladder and as a result is not turning blue as it ages. And that’s both a bigger worry and a more lucrative electoral target for Labour’s opponents than litigating an NME interview.

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to domestic and global politics.