Tuesday, June 19, 2007

Taking Action; Sustainable Business Education

After over two years of pondering and reading about socially responsible business, I have decided to apply to the Bainbridge Graduate Institute. I started a file over two years ago with information on "green" MBA programs. There was a mailer from Green Mountain College in Vermont (of course) as well as a few articles and clippings about MBA programs in general, including a not so positive piece from The Economist and one from the Financial Times. I like this paragraph from The Economist's piece (emphasis mine):
By teaching ethics and becoming more practical, business schools may be going back to their roots. As Rakesh Khurana of HBS points out, many schools saw their founding mission to professionalise the management of business, much as medical and law schools had institutionalised their disciplines. According to Mr. Khurana, whose book on the history of HBS is about to be published to mark its centenary next year, professions have at least four elements: an accepted body of knowledge; a system for certifying mastery of that knowledge before it can be practised; a commitment to the public good; and an enforceable code of ethics.

Is harvesting resources at an ever increasing rate with little regard to cultural and natural effects ethical? Good question. Back to the topic at hand.

Everything I have learned about BGI's innovative program leads me to believe that this is the place for me. I have been working for over ten years, and have been relatively successful, yet I know so little and have such a great intellectual curiosity to better understand "business". On top of that, I am convinced that our linear production systems are broken, though our businesses are not equipped to fix them. We have one finite planet that businesses play an enormously influential role in. Why not help them hop on the {insert zero emission vehicle here} and come along for the "green" ride?

There are risks associated with joining something that is new (as with any new venture); it could fail. The degree could be viewed warily by would be employers, the experience could be less useful than anticipated, on-and-on-and-on. Nothing ventured, nothing gained.

On the other hand, how exciting is it to potentially be part of something new and ground-breaking? An entirely new way of teaching what it is to be in business. This is what gets entrepreneurs fired up from dawn 'til way past dusk, a deeply held belief that what they are doing matters, that it makes a difference in some small way, that it positively affects people. No matter what company or movement someone or some group starts, it is done with the intent of changing something for the better (according to their vision). BGI is on that path.

Electronic and verbal conversations with quite a few graduates yield the same responses; they are all happy, no, nearly ecstatic, with their decision to attend BGI and their experiences. They are part of a new way of looking at business, a way that seeks to infuse conscience and social accountability while maintaining a rigorous commitment to financial performance. Social accountability and financial performance are not mutually exclusive, they are inseparable.

On a slightly different note, some small news items:
  • I caught a short segment on this evening's edition of the Nightly Business Report on socially responsible investing. Key point: there is no definitive evidence that SRI funds over or under perform the broader market; do what you think is best. Watch the segment for yourself and draw your own conclusions

  • Warren Buffett doesn't rate non-financials in his investment decisions. Who would have guessed? The test will be whether companies that DO take CSR actions (broad definition here) end up being the kind of companies Mr. Buffett prefers to invest in. Berkshire holds 200 million shares of Coke, and Coke recently made a pledge to help maintain watersheds in some developing areas. Also, given Berkshire's insurance business, they stand to suffer from climate change induced natural disasters. (excerpt from Mr. Buffett's Letter to Shareholders)
    "All that said, a confession about our 2006 gain is in order. Our most important business, insurance, benefited from a large dose of luck: Mother Nature, bless her heart, went on vacation. After hammering us with hurricanes in 2004 and 2005 – storms that caused us to lose a bundle on super-cat insurance – she just vanished. Last year, the red ink from this activity turned black – very black."
Fewer disasters = better profitability. Calm weather is in their best interest.

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