11 Jul 2017
375
375 views


The Right Thing to Do

Video series explores lapses and lessons in business ethics.
by Constantine von Hoffman

Topics:
ShareBar

Playing by the Rules, Ethics at Work, a new series of video case studies of business ethics, aims to teach people that there’s a direct link between morality and the bottom line.

Joe Badaracco, the John Shad Professor of Business Ethics at HBS, consulted on the series, which was funded mostly by Ronnie and Larry Ackman (MBA 1963) and produced by New York public broadcaster WNET.

The three episodes in the series premiered on WNET and are now being offered to some 400 business schools in the United States and Great Britain “in hope they will be used either for orientation before [students] start or for course materials, so word gets spread around that it doesn’t pay to have bad ethics,” says Larry Ackman, who expects more episodes to be made. Additionally, the episodes are available online for anyone to view.

Larry Ackman (MBA 1963)

The first episode, “The Whistleblower,” tells the story of Sherry Hunt, Citibank, and the frauds that caused the Great Recession. Hunt started at Citi as a mortgage quality control officer in 2004, just as the housing bubble was swelling up. She saw the company making loans that wouldn’t meet any bank’s standards. She also saw her direct boss get fired for trying to inform the senior management. In 2011, Hunt was told to change the quality control reports so they looked better than they were. That’s when she took a stand.

Episode two, “Ask Why,” focuses on Enron, the company that, even after the collapse of Lehmann Brothers and the other misdeeds of the mortgage crisis, remains the standard when it comes to unbridled corporate greed. Enron went bankrupt in 2001 after using a series of accounting schemes to exaggerate its bottom line and then bullying people who questioned the company’s activities. Despite the breadth of the fraud, few people at Enron ever admitted to knowing about it. This episode tells the story of the company’s rise and fall and of one Enron employee brave enough to take her concerns straight to the top.

“The Run Coal Memos,” the third episode of the series, is about the Massey Energy company and the 2010 explosion at the Upper Big Branch mine in West Virginia, which killed 39 people. At the time, the company was run by Don Blankenship, a hard-charging CEO who put profit ahead of safety. In the five years before the disaster, the Upper Big Branch mine was cited for 1,342 safety violations, two on the day before the explosion. Although few senior executives are ever prosecuted for their misdeeds, the authorities did go after Blankenship, and by doing so also put the company’s culture on trial. He was found guilty of a misdemeanor charge of conspiring to willfully violate mine safety and health standards. He served a one-year term, from which he was just released.

Ackman, a leading real estate investor and chairman emeritus of the Ackman Ziff Real Estate Group LLC and member of the advisory board of the Pershing Square Foundation, has long been concerned about the decline of morality in business. In 1988, he set up the Lawrence D. Ackman Endowment in Business Ethics and Social Responsibility at HBS. This series is just his latest effort at lighting a candle instead of just cursing the darkness.

“I’m doing my thing,” he says. “I have no illusion that I’m going to be able to turn around the tide. It’s like turning around the Titanic. But I’m doing it because I think it’s so important.”

In total, the three episodes cost Ackman $700,000. Whenever they air on WNET, their average viewership is between 45,000 and 50,000. He is quick to point out that that works out to about $5 per viewer. However, Ackman’s ROI metric for this series is akin to that of Diogenes’ search for an honest man or Lot’s for righteous people in Sodom and Gomorrah.

“It’s really expensive,” he admits, “but want to know something? If only 50 people watched and there was a significant impact among those 50 people, at least we got those 50 headed in the right direction.”

ShareBar
Featured Alumni

Featured Alumni

Class of MBA 1963, Section D

Post a Comment