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.

Getty Images.
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Is anyone prepared to solve the NHS funding crisis?

As long as the political taboo on raising taxes endures, the service will be in financial peril. 

It has long been clear that the NHS is in financial ill-health. But today's figures, conveniently delayed until after the Conservative conference, are still stunningly bad. The service ran a deficit of £930m between April and June (greater than the £820m recorded for the whole of the 2014/15 financial year) and is on course for a shortfall of at least £2bn this year - its worst position for a generation. 

Though often described as having been shielded from austerity, owing to its ring-fenced budget, the NHS is enduring the toughest spending settlement in its history. Since 1950, health spending has grown at an average annual rate of 4 per cent, but over the last parliament it rose by just 0.5 per cent. An ageing population, rising treatment costs and the social care crisis all mean that the NHS has to run merely to stand still. The Tories have pledged to provide £10bn more for the service but this still leaves £20bn of efficiency savings required. 

Speculation is now turning to whether George Osborne will provide an emergency injection of funds in the Autumn Statement on 25 November. But the long-term question is whether anyone is prepared to offer a sustainable solution to the crisis. Health experts argue that only a rise in general taxation (income tax, VAT, national insurance), patient charges or a hypothecated "health tax" will secure the future of a universal, high-quality service. But the political taboo against increasing taxes on all but the richest means no politician has ventured into this territory. Shadow health secretary Heidi Alexander has today called for the government to "find money urgently to get through the coming winter months". But the bigger question is whether, under Jeremy Corbyn, Labour is prepared to go beyond sticking-plaster solutions. 

George Eaton is political editor of the New Statesman.