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.

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Leader: Trump and an age of disorder

Mr Trump’s disregard for domestic and international norms represents an unprecedented challenge to established institutions.

The US presidency has not always been held by men of distinction and honour, but Donald Trump is by some distance its least qualified occupant. The leader of the world’s sole superpower has no record of political or military service and is ignorant of foreign affairs. Throughout his campaign, he repeatedly showed himself to be a racist, a misogynist, a braggart and a narcissist.

The naive hope that Mr Trump’s victory would herald a great moderation was dispelled by his conduct during the transition. He compared his country’s intelligence services to those of Nazi Germany and repeatedly denied Russian interference in the election. He derided Nato as “obsolete” and predicted the demise of the European Union. He reaffirmed his commitment to dismantling Obamacare and to overturning Roe v Wade. He doled out jobs to white nationalists, protectionists and family members. He denounced US citizens for demonstrating against him. Asked whether he regretted any part of his vulgar campaign, he replied: “No, I won.”

Of all his predilections, Mr Trump’s affection for Vladimir Putin is perhaps the most troubling. When the 2012 Republican presidential nominee, Mitt Romney, warned that Russia was the “number one geopolitical foe” of the US, he was mocked by Barack Obama. Yet his remark proved prescient. Rather than regarding Mr Putin as a foe, however, Mr Trump fetes him as a friend. The Russian president aims to use the US president’s goodwill to secure the removal of American sanctions, recognition of Russia’s annexation of Crimea and respect for the murderous reign of the Syrian president, Bashar al-Assad. He has a worryingly high chance of success.

Whether or not Mr Trump has personal motives for his fealty (as a lurid security dossier alleges), he and Mr Putin share a political outlook. Both men desire a world in which “strongmen” are free to abuse their citizens’ human rights without fear of external rebuke. Mr Trump’s refusal to commit to Nato’s principle of collective defence provides Mr Putin with every incentive to pursue his expansionist desires. The historic achievement of peace and stability in eastern Europe is in danger.

As he seeks reconciliation with Russia, Mr Trump is simultaneously pursuing conflict with China. He broke with precedent by speaking on the telephone with the Taiwanese president, Tsai Ing-wen, and used Twitter to berate the Chinese government. Rex Tillerson, Mr Trump’s secretary of state nominee, has threatened an American blockade of the South China Sea islands.

Mr Trump’s disregard for domestic and international norms represents an unprecedented challenge to established institutions. The US constitution, with its separation of powers, was designed to restrain autocrats such as the new president. Yet, in addition to the White House, the Republicans also control Congress and two-thirds of governorships and state houses. Mr Trump’s first Supreme Court appointment will ensure a conservative judicial majority. The decline of established print titles and the growth of “fake news” weaken another source of accountability.

In these circumstances, there is a heightened responsibility on the US’s allies to challenge, rather than to indulge, Mr Trump. Angela Merkel’s warning that co-operation was conditional on his respect for liberal and democratic values was a model of the former. Michael Gove’s obsequious interview with Mr Trump was a dismal example of the latter.

Theresa May has rightly rebuked the president for his treatment of women and has toughened Britain’s stance against Russian revanchism. Yet, although the UK must maintain working relations with the US, she should not allow the prospect of a future trade deal to skew her attitude towards Mr Trump. Any agreement is years away and the president’s protectionist proclivities could yet thwart British hopes of a beneficial outcome.

The diplomatic and political conventions embodied by the “special relationship” have endured for more than seven decades. However, Mr Trump’s election may necessitate their demise. It was the belief that the UK must stand “shoulder to shoulder” with the US that led Tony Blair into the ruinous Iraq War. In this new age of disorder, Western leaders must avoid being willing accomplices to Mr Trump’s agenda. Intense scepticism, rather than sycophancy, should define their response.

This article first appeared in the 19 January 2016 issue of the New Statesman, The Trump era