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Holding Higher-Educational Institutions to a Higher Ethical Standard

U.S. corporations invest in compliance training and ethics programs to create a culture that prevents unethical behaviors; acts by employees that could result in severe penalties and legal actions. Strong ethical cultures lead to a highly motivated workforce, a stronger brand and long-term ROI. But unethical behavior might lead to crippling financial costs, government monitoring and employee convictions. As one
corporate compliance officer said, “I don’t want to spend my retirement at Club Fed.”

American colleges and universities represent a large sector of the U.S. GDP (est. $200 billion). In some metropolitan areas, a university is the single largest employer, with tuition, grants, endowments, building assets, and intellectual capital totaling billions of dollars. Yet, according to an informal survey conducted by the Institute for Ethical Leadership in 2012, higher education colleges and universities – unlike industry – have invested little to build an ethical culture. Generally staff and students are ‘taught’ to comply with rules and laws regarding sexual harassment, conflict of interest, and plagiarism through a required online tutorial.

Ethical lapses occur every day at universities in SAT scoring, student and professor plagiarism, and rank fixing. These ethical breaches receive some national attention but are rarely injurious to the institution – for example, there is not a category for “most ethical” college in national magazine college rankings. And to date, colleges have not experienced the kind of federal scrutiny and penalties imposed on corporations for ethical breaches.

College athletics could represent large profit centers with income from game attendance and television royalties, greater booster contributions, and other financial rewards. The high-profile nature and high stakes of college athletics mean that a basketball or football coach is likely the highest compensated person on campus. And coaches are lionized. Nonetheless, a significant ethical breach frequently comes at a price: The Penn State football affair topped $41 million in direct costs plus loss of future television income.

A survey of college presidents by Inside Higher Ed found that just 13.1 percent agreed with the statement, “The presidents of big-time athletic programs are in control of their programs.”

So how can higher-education leaders ensure an honest ethical culture while avoiding significant costs and potential criminal activity? They can take a page from corporations that for financial, legal, and business reasons are committed to creating an ethical culture. College leadership, too, can undertake a broad, systemic approach to build an ethical culture among board, administration, faculty, and students. Creating
a strong ethics culture and program is crucial to mitigating misconduct and building a stronger organization while protecting a cherished and financially lucrative brand.

This wide-reaching endeavor requires hiring and empowering a chief ethics officer (most universities are without one), creating an independent ethics department and retaining consultants to provide systematic university-wide, training. Most important, this culture change calls for support at the top, beginning with the college president and board, and by matching rewards with behaviors.

A college president’s job description includes fundraising and improving academic standards, but how many explicitly require “raising the university’s ethical culture?” And financial rewards must be aligned with values. One coach’s contract provides performance incentives of up to $300,000; and only $25,000 of that is tied to students’ academic performance, with the rest dependent on winning games and increasing income. In this case, there is a misalignment between rewards and values.

An ethical culture also requires a commitment to act on ethical breaches, as when the board of The Ohio State University recently fired its president (described as a prolific fundraiser) because his comments about sports programs “do not reflect the values of the university”. Contrast this with Bobby Knight, allowed to remain as coach of the Indiana University basketball team in spite of his outrageous behavior- because the team kept winning.

A strong ethical culture will also help protect against “rogue” behavior. There are no rogues. The assistant coaches, boosters, sports facility janitors and athletes’ parents are all tacitly complicit in a coach’s abusive behavior. We could upend this cover-up culture by invoking a rule that student athletes might lose scholarships for not reporting unethical behavior.

Collegiate success must be defined not by bowl victories or academic rankings, but rather by graduating individuals with strong values as well as job prospects. As expressed by Terry Williams, dean of Hull University Business School, it’s important that higher education’s role nurtures an atmosphere that produces graduates who understand responsibility as future leaders and community members.

James Abruzzo, Consultant, Consulting, Executive Search, Nonprofit Compensation, Expert Witness, Higher Education

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