"Failing our Students" - what the business schools haven't been teaching

“By failing to teach the principles of corporate governance, our business schools have failed our students... By not internalizing sound principles of governance and accountability, graduates have matured into executives and investment bankers who have failed workers and retirees, who have witnessed their jobs and savings vanish.”

Not my words, but an extract from an article in the Wall Street Journal on 24th April (that a friend sent to me), by a business school professor from North Carolina, Michael Jacobs, who was previously director of corporate finance at the US Treasury.

Besides agreeing strongly with Professor Jacobs, what else should we learn from this? First, that we’ve sometimes been talking to the wrong people; and second that we’ve usually left it too late.

I spend quite a lot of my time presenting at directors’ workshops and courses. The typical participant has already built a successful career - chief executive, second-tier management, new director, or sometimes quite experienced as a director but with no formal training in the role. To reach this current stage, such people have learned what works for them and have usually developed some well-entrenched approaches to doing things.

If they haven't previously factored-in good governance practices, it’s unlikely that a few days on even one of my programmes will change the habits of a lifetime!

All our experience teaches us that habits learned early are habits learned well. So what if we listened to Professor Jacobs’ advice and started teaching principles of good governance at a much earlier stage in these leaders’ careers? What if we included corporate governance as a core element of MBAs - and not just in the sense of the controls, checks and balances, but showing examples of the real value that a dynamic and engaged Board can add to an organization, and its chief executive?

The lesson I’ve taken from Professor Jacobs is that we should be exposing people to the principles of good corporate governance while they are still putting together the building blocks for a career in leadership. By the time they get there, it may be too late to change.

I hope we’ll see many more younger participants on our director-training programmes, and that I (and others) can spend more time in front of MBA classes, where tomorrow’s leaders often build the framework for their high-flying careers. If they come, and if Professor Jacobs is right, then maybe we won’t see a repeat of the excesses and behaviours that have so dented credibility and faith in the free enterprise system in the last 18 months.

And that would have to be good for everyone, not least those who choose to learn what good governance is, far earlier in their careers.