… available in these fifty states. Their faculty correctly picks up on the fact that they’re graduating many of the masterminds who’ve royally fucked up the country. They think the solution to this is ethics training, in which men and women who’ve had twenty years to learn basic decency are brought from bad to good via wittle teeny morality scenarios…

This approach, called “Giving Voice to Values,” begins from the assumption that there will always be those who push and even break society’s laws and ethical norms. But there will also be those who would rather observe them, if they believed they had the skills, the competency, and the literal practice in how to do so. Rather than “teaching ethics,” this approach teaches managers how to be ethical, enabling them to believe they have a choice.

Turns out MBA students are trembling mutes, like King George before he found his voice… Turns out they don’t even believe they have a choice to behave well… We must enable these lost souls…

Another B-school ethics person is excited because of some of the moral paragons who are on the ethics case:

My colleagues and I are encouraged that some B-schools have sought help from higher-ambition leaders themselves — people like Ken Freeman, former CEO of Quest Diagnostics, now dean of Boston University’s School of Management, and Bill George, former CEO of Medtronic, now teaching leadership development at HBS.

Bill George. Medtronic. Well, if higher ambition means the sky’s the limit for personal compensation, yes. Hard to find a bigger cheerleader for outrageous salaries than Bill, who, from his Goldman Sachs director’s chair, lustily praises greed. What a moral example Bill set by his silence about the injuries he inflicted by awarding those salaries to Goldman Sachs people!

In a Bloomberg article titled Goldman’s Silent Board, Richard Teitelbaum reminds us of Bill’s outstanding service:

The board members said nothing publicly, for instance, when on April 16 the U.S. Securities and Exchange Commission filed a civil suit alleging Goldman had committed fraud in underwriting and marketing a mortgage-related security called Abacus 2007-AC1 without disclosing to clients that a bearish hedge fund customer, Paulson & Co., was involved in creating it.

Goldman calls the SEC suit “completely unfounded.”

Federal prosecutors in New York are also investigating Goldman transactions to determine whether to pursue a criminal fraud case, according to two people familiar with the matter.

Nell Minow, co-founder of the Portland, Maine-based Corporate Library, a governance research firm, says that when the SEC suit was filed, the outside directors should have immediately set up a committee to investigate, hired independent counsel and announced that they would make the results of their probe public.
Wells Notice

The board should also have been riding herd on its members’ stock trades, says Cornell University Law School Professor Robert Hockett, who specializes in financial regulation from his office in Ithaca, New York. Goldman spokesman Lucas van Praag says directors are periodically informed of such trades. The bank received a Wells notice dated July 28, 2009, notifying the firm that it was the target of an SEC fraud investigation.

At least three company executives, including Vice Chairman Michael Evans, unloaded more than $27 million of Goldman stock from October 2009 through February 2010 in open market sales unrelated to the recent exercise of options or delivery of restricted stock, according to data compiled by Bloomberg.

Van Praag says Goldman’s board was informed of the Wells notice, which was not made public until after the SEC filed its suit. He says the firm’s lawyers determined it wasn’t material.

“On the face of it, the idea that that would not be material — I can’t imagine anybody saying that with a straight face,” Hockett says.

Well, why should it be material to Bill “Bankers are Movie Stars” George?

“Executive pay, which has skyrocketed over the past generation, is famously set by boards of directors appointed by the very people whose pay they determine,” explains Paul Krugman, and ain’t it the truth, Ruth.

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