BOULDER – The Leeds Business School auditorium at the University of Colorado is jam packed. Around 1600 students came to hear the star of the day: a 50-something man with short white hair and a striped shirt. His name is Andrew Fastow, and his audience is spellbound.
At the end of the 1990s, Fastow was Enron’s financial director, and partly responsible for one of the biggest bankruptcies America has ever known. In 2002, a year after his company’s collapse, he was indicted on fraud, money laundering and conspiracy. He cooperated with authorities and served six years.
The conference leaves no one indifferent. “It makes us realize that at any time, we could be confronted with a situation in which we might act unethically,” says b-school student Pete Williams. “It’s very important for us to think about where we stand, whether we would cross the line.”
Three weeks before Fastow’s visit, and during the following three weeks, the Leeds held formal and informal discussions on ethics and the failures of the business world. The recurrent question was: what should – and would – you have done in Andrew Fastow’s shoes?
“In the seven years I’ve spent here, I’ve never seen the student and teacher body so enthusiastic about an event. There is a huge educational value. Stories like Andrew Fastow’s are so real that they capture student and teacher attention like no other traditional class,” says Donna Sockell, from the Center for Education on Social Responsibility at the Colorado school, who organized the conference.
This isn’t the only institution taking such initiatives. For the past 10 years, as financial scandals continue to make headlines, business schools have integrated business ethics to their curriculums, a trend strengthened further by the 2008 subprime crisis.
Many schools invite white-collar criminals to talk to the student about their edifying experiences. Recently, founder and former CEO of the Quellos Group, Jeffrey Greenstein, spoke at the University of Washington’s Foster School of Business. He had been sentenced to four years in prison for tax fraud.
NYSE trader Garrett Bauer was just sentenced to nine years in prison after pleading guilty to an insider-trading scheme that made him more than $32.2 million. He has spoken to over 120 colleges since Sept. 2011, including the London Business School and Harvard University.
Glamorizing convicted felons
There is so much interest in these testimonies that specialist firms like “The Pros & the Cons’ have made a business out of fraud prevention classes – with testimonials from convicted “fraudsters.” Richard Shreve doesn’t approve. He is a business ethics professor at the Tuck School of Business, where inviting white-collar criminals to talk to the student has become a ritual. Each year since 2001, an ex-criminal comes to tell his story, but “we never pay them,” assures the professor, who knows these events are controversial.
“People might think that we are glamorizing these criminals or reinforcing the belief that all businessmen are crooks. To dispel these notions, we invite more exemplary CEOs than convicted felons. But the conferences with white-collar criminals are extremely popular and foster ethical debates on campus,” says Shreve.
Some stories deeply move the students. A mother tells them about how she had to put her two daughters on a plane and entrust them with family friends before she was incarcerated with her husband for double billing. “In all of these stories, there is always a conjunction of three factors: need, opportunity and reason – that is to say the narrative the criminal uses to justify his actions. It’s amazing to see how many of them, even the convicted ones, stick to this narrative,” says Shreve.
According to him, there is no need to convince students that it’s wrong to commit fraud. “They are honest people. But it’s very probable that one day they’ll be confronted with a professional situation where it is hard to decide what the right thing is. What do you do, for instance, when the legitimate interest of shareholders conflicts with that of the employees?” When the time comes to resolve an ethical dilemma, having crossed paths with convicts might help them make the right choice.
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Photo – The Center for Education on Social Responsibility (CESR)