MBA schools and the new capitalism
Canadian universities among leaders in incorporating social responsibility into course ideals
This August, the Business Roundtable, a U.S. lobby group of powerful chief executives, including the leaders of Apple, Ford, Walmart and Pepsi, renounced their long-standing position that corporations exist principally to serve their shareholders.
Some dismissed it as a public relations stunt, but it’s a that businesses recognize it is no longer sustainable to make gobs of money at the expense of people and the planet, but rather that business must be fair to the planet and people because they are the foundation on which economies rely.
With climate strikers in the streets around the world and businesses singing the praises of serving all stakeholders, it’s a fair question to ask: what are business schools doing to keep up?
Not enough, according to a recent report in the Financial Times on responsible business education, which found “there is widespread agreement that business schools should do more to provide research and teaching for the next generation of students with greater focus on sustainability, ethics and social purpose.”
“Employers are hungry for graduates with that (added value) of sustainability,” according to Rumina Dhalla, corporate social responsibility co-ordinator at the University of Guelph Lang School of Business and Economics and co-ordinator of the MBA graduate program.
But Frances Edmonds, head of sustainable impact at HP Canada, bemoans that most business graduates lack basic sustainability skills, and have no clue, for instance, how to account for the carbon footprint of a product’s supply chain.
But business schools are beginning to get with the program. Over two-thirds of the Financial Times top 100 ranked MBA cohort now integrate a holistic purpose of business into at least one core course, while business faculty research related to the Sustainable Development Goals has increased markedly, numbering 5,000 published articles in the past year.
It turns out that 10 of the best business schools for the world are right here in Canada, with four of the top 40 calling Southwestern Ontario home, according a new ranking by Corporate Knights. The ranking evaluated 146 business schools around the world to see which ones were doing the best job at baking sustainability considerations into their core courses, institutes and faculty research and diversity.
York University’s Schulich School of Business ranked No. 2 in the world on the back of a world-class research program. No other business school published as many articles per faculty member in peer reviewed journals on sustainability themes. Article titles covered the gamut with titles like “Societal trust and corporate tax avoidance,” “Institutional Transitions and the Role of Financial Performance in CSR Reporting,” and “Linking Societal Trust and CEO Compensation.”
If accountants really are going to save the world as World Business Council for Sustainable Development head Peter Bakker is fond of saying, Schulich’s Charles Cho, a professor of accounting, and Erivan K. Haub, chair in Business & Sustainability, is part of the vanguard, editing four influential journals and teaching a score of courses including the popular Accounting and Sustainability.
While he may not be a household name, Schulich’s Dirk Matten, Professor of Strategy; Hewlett-Packard Chair in Corporate Social Responsibility, co-authored one of the most widely cited sustainable business articles of the last decade: “‘Implicit’ and ‘explicit’ CSR: A conceptual framework for a comparative understanding of corporate social responsibility,” which addresses the question of how and why corporate social responsibility (CSR) differs among countries and how and why it changes.
Schulich has been one of the top ranked sustainable MBA schools for most of this millennium. That is a function of its top-notch faculty, it also a reflection of Dean Dezso J. Horvath, who is now the longest serving business school dean in the world. Before landing in Canada, Horvath’s family fled Hungary in 1956 and settled in Sweden, where the stakeholder approach to capitalism left a lasting mark on the young engineer, which he has made a central part of his legacy at Schulich. In 2016, Horvath together with Schulich’s Matthias Kipping and McKinsey’s Dominic Barton (now Canada’s ambassador to China) published a seminal tomb called Re-Imagining Capitalism, which includes a series of essays that reflects on both the urgency of needed action and the opportunity to achieve a wide-ranging and lasting movement toward a more responsible, equitable and sustainable economic model.
Better known for its veterinary and agricultural programs, the University of Guelph is also home to the Gordon S. Lang
School of Business and Economics, ranked as the18th most sustainable business school in the world. Lang offers an “MBA In Sustainable Commerce” with 60 per cent of its core courses making sustainability a central theme, including Sustainable Value Creation, Business Practices for Sustainability, and Governance for Sustainability.
Not surprisingly perhaps, Lang’s dean from 2009 to 2019, Julia Christensen Hughes, cut her teeth at Schulich. In Guelph and on the world stage, she is obsessed with making “business a force for good.”
In 2015 Hughes was invited to address the United Nations General Assembly, on behalf of the 700-plus business school signatories to the UN’s Principles for Responsible Management Education (PRME) initiative, where she repudiated Milton Friedman’s famous article that businesses have no social responsibility beyond making money. She has also championed a revamped Introduction to Business course that “on-boards” students through
“the great ethical dilemma;” a required course in corporate social responsibility that engages students with the UN’s sustainable development goals.
Up until recently the main badge of honour on Tiff Macklem’s wall was for saving the world from financial collapse when he was deputy governor of the Bank of Canada and helped quarterback the global response to stop the financial crisis from becoming a fullfledged depression from his BlackBerry while travelling in London after the housing bubble popped back in 2008.
Since 2014, he has been the dean of the University of Toronto-Joseph L. Rotman School of Management and chair of the federal government’s Expert Panel on Sustainable Finance, which has issued a blueprint for rebooting Bay Street to deal with climate change and stay solvent in the 21st century. Some of this is clearly rubbing off on the Rotman School of Management, which ranked as the 31st most sustainable business school in the world, in part due to being home to some of the country’s leading institutes advancing sustainability including Clarkson Centre for Business Ethics and Board Effectiveness, Institute for Gender + the Economy, Martin Prosperity Institute, and the Michael Lee-Chin Family Institute for Corporate Citizenship.
Ryerson University’s Ted Rogers School of Management ranked in as the 37th most sustainable school in the world, with highlights including its Institute for the Study of Corporate Social Responsibility, partial integration of ethics and social impact to several core courses and having one of the most gender diverse faculties in the world (40 per cent of its professors are female).
The fact that Canada has 10 of the top 40 most sustainable business schools in the world is worth celebrating. But the bar is rising fast, which is good for the health of society and our planet, and essential for the legitimacy of business.