Published: September 21, 2011
As part of MIT Sloan’s orientation week, first-year MBA students were invited to attend a panel discussion entitled, “Ethical Issues in Finance.” Held at the Marriott Ballroom, the event was filled with lively discussion and brought a timely and insightful exploration of the finance sector to the week’s overall focus on “principled, innovative leadership.”
Assembled to include a broad spectrum of experiences, the panel consisted of Lawrence Fish, retired chairman and chief executive officer of Citizens Financial Group, Inc., and a member of the MIT Corporation; Mila Sherman, SB MIT ’98, PhD ’04, post-doctoral fellow, MIT Lab for Financial Engineering, associate professor of finance at the Isenberg School of Management at UMass Amherst; and Ellen Moynihan, senior investigations counsel in the Division of Enforcement at the U.S. Securities and Exchange Commission’s Boston regional office. John C Head III Dean David Schmittlein moderated the panel.
In his introduction, Schmittlein laid the groundwork for the conversation by recounting an anecdote about Warren Buffett and his company Berkshire Hathaway. Explaining that Buffett looks for three basic human characteristics in a new employee, intelligence, drive, and values, Schmittlein pointed to the third as being the most important. Because without values, he explained, intelligence and motivation can be very dangerous. “It is not the stupid or lazy people who destroy companies,” he said, “it is the people who are smart, people who are driven, and people who do not have enough of a true north to guide the organization through challenging times.”
From there the discussion was opened to the audience, who posed a number of insightful and probing questions on topics ranging from the ethical implications of downsizing, to the role of government regulation within the financial services industry. And though each panelist addressed the issues at hand from a very different vantage point, the common themes of transparency and following one’s own sense of right and wrong quickly emerged.
Warning of the increasing number of ethical pitfalls that exist in today’s complex business world, the panelists urged students to always be vigilant in their commitment to do the right thing. “It is very hard to build a good reputation,” Ellen Moynihan reminded them, “but it is very easy to destroy one.” Likewise, Mila Sherman encouraged the group never to stray from their own moral centers, adding that in the long run it would only amplify their success. “What I want to make clear,” she said, “is that ethics is not just the right thing to do, it is also the profitable thing to do. If you do it right, incorporating ethics into your life and your decision making will actually increase the profits for yourself and your company.”
But perhaps the most powerful moment came when Lawrence Fish addressed the question of compensation in the finance industry. “I’ll give you one piece of advice,” he said, looking out at the audience, “somewhere along the road in your career, and it will change as you go along, think about how much is enough.” It was a simple sentiment, but one that continued to resonate throughout the rest of the discussion as the panelists went on to explore a wide spectrum of other ethical questions both global and personal. And with dozens of students still lined up to join the conversation at the event’s end, it was clear that the room full of future leaders was listening.