February 3, 2023Read More
In a recent Financial Times article, Colin Mayer, former dean of Saïd Business School, argues that business schools need to do more to focus on purposeful business practices and companies need to reward skillsets and cultures emphasizing Environmental, Social, and Governance (ESG).
Europe’s corporate leaders, Mayer argues, have been promoting purposeful, responsible, and sustainable business practices – yet European business schools are lagging in preparing future ESG leaders. Europe’s executives have been incentivized by European Commission regulatory reforms, but business schools have merely interjected a few ESG electives and minor changes in their core curriculum. Instead, business schools continue to focus primarily on maximizing shareholder wealth, the discredited view that corporations’ only responsibility is to its owners.
Mayer recommends that business schools begin asking students why businesses exist, using interdisciplinary collaborations with departments across their universities to help students recognize that non-profit, public, and social enterprise sectors are corporations’ potential partners and constituents.
Mayer shares developments toward this rethinking at several schools. INSEAD recently established the Hoffmann Global Institute for Business and Society to focus on transforming business education around sustainability, inclusion and wellbeing. Harvard Business School launched a course called Reimagining Capitalism: Business and Big Problems and established a research program on impact-weighted accounts to measure companies’ benefits and burdens. Finally, Saïd Business School provides core courses on responsible business and how it can address global challenges. The school also has research programs on corporate purpose and ownership, governance, measurement and performance, and partners with seven leading European schools to address the climate crisis.
Mayer argues that these and other schools have not done more because they have already invested significant capital in shareholder-oriented knowledge, practices, research, data, and reputations. Moreover, as long as alumni salaries drive rankings and schools worry about losing competitive advantage by migrating to a softer, more qualitative curriculum, there will be little incentive to redefine management education around stakeholder value.
Mayer closes by asserting that the optimal way to challenge the status quo is by providing factual evidence supporting stakeholder value through academic research, evaluation of business performance and competitive markets, and metrics on the commercial success and environmental and social sustainability of purposeful business.