The crisis in the sub-prime mortgage market, forcing banks to write off billions of dollars in bad loans, sounds an alarm for teachers of finance, according to Rev. Quentin Dupont, SJ, a California-based educator who spoke at the recent Mendoza College of Business conference, “Business Education at Catholic Universities: The Role of Mission-Driven Business Schools.”
Ethics must be reintegrated into the teaching of finance, which focuses largely on utilitarian principles, Dupont said in his June 11 presentation at the University of Notre Dame. “Most of what we find in finance today is quantitative analysis,” he said, and educators—especially those in business schools informed by a university’s Catholic values—need to offer their students more guidance, both theoretical and practical.
Dupont proposed articulating a school’s Catholic mission more assertively and challenging finance students to do more critical thinking about utilitarian assumptions and their consequences: “Maybe we could use natural law or Catholic social teaching to contrast with those utilitarian-based models,” he said. Also, ethically outstanding professionals offered to students as role models and mentors can impart practical approaches for defining maximizing shareholder value in an ethically informed way.
Roger Huang, a leading authority on international financial markets and an associate dean at Notre Dame’s Mendoza College of Business, agreed that the people whom students encounter in Catholic mission-driven business schools make a big difference, although he noted that ethics education “is not about financial knowledge, but how to properly use the knowledge within constraints that reflect the community’s standards of conduct.” Awareness of the ethical dimension in our professional life, as encouraged through a Catholic curriculum, means using finance in ways “appropriate for the mind, the heart, and the soul.”
That requires a group of educators who are immersed in both professional knowledge and a system of values, including Catholic social thought, said Huang. Merely applying the professional skills and the utilitarian ethos, while adopting charitable behavior as an isolated add-on, risks creating an organization that is “not sustainable,” according to Huang, who participated in the conference’s roundtable on teaching ethics in finance. An integrated practice of finance “has to make both economic sense and ethical sense.”
The conference, co-sponsored by 18 colleges and universities June 11-13, 2008 brought to Notre Dame about 250 business professors from around the United States and a number of other countries.
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