Ambit + Blog

The Golden Passport

In 1978, The New York Times wrote that a degree from Harvard Business School was a ‘golden passport to life in the upper classes’. Plus ça change. Every year, HBS vies for the top position in the various global rankings of business schools alongside its esteemed rivals Insead, Stanford, MIT and Wharton. But on almost every conceivable metric, a Harvard MBA is the most powerful academic qualification you can get from any university, anywhere. The average salary, three years after graduation, is $238 000 (US).

A few weeks ago, Duff McDonald – a Canadian journalist based in New York – published a book that caught our attention. His argument is that HBS, historically, has failed American – and by extension international societies – though producing influential graduates who have put profits ahead of everything. The founders of the institution wanted to teach socially responsible business skills, but somehow, over the years, that morphed into improving shareholder value. He points the finger at a number of influential professors.

McDonald’s book focusses on HBS, but what he says about that MBA program might well be true of other top-tier programs – or, in fact, about MBAs in general: that they teach you how to make money, and run a profitable business. In other words, that it is a degree which is likely to put you in a position of power and you probably won’t use that power to benefit society. If nothing else, it’s a provocative argument.

A study that crossed our desks last week reports that about 50% of CFOs have an MBA. This is interesting to us because, more and more – and we’ve talked about it before a little in these blogs – the finance function is taking on a broader remit within many companies, steering them in ways beyond just numbers. It has become a much more of a general leadership area than ever before, often the CEO’s right hand.

The same study also said that CFOs cite ‘shareholder value’ as their number one performance target, and there is unlikely to come a day where responsible and intelligent financial management is not the key focus of the CFO and his or her direct reports. But we feel it would be worth it, for boards and CEOs, to remember that just because finance deals with money and how it is spent, it doesn’t follow that it shouldn’t weigh in on how the money is made and what is good for the long term context of the business, the industry and whatever CSR objectives have been set out. The CFO is by no means a moral guardian of the business, but if a company is asking questions about ‘value’ beyond shareholder value, they need to be a part of the conversation.

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