OREM — Companies need to eliminate conflicts of interest — or perceptions of such conflicts — the former dean of the Harvard Business School said Friday morning during a speech at Utah Valley State College.
Kim Clark, now president of Brigham Young University-Idaho, believes that solutions to corporate misconduct don't come from legislation and government regulation alone. Universities must incorporate ethics curricula.
And business leaders must find the courage to stand up for what's right, he said.
Conflicts of interest have made business dealings muddy. For instance, he said, Standard and Poor's, the credit-rating group, now offers a service called Risk Solutions that can help company leaders improve their bond ratings.
But even if the firm strives to keep its credit-score department separate from its bond-rating department, the public will perceive a conflict of interest.
Clark doubts that a chief operating officer seeking a credit score would decline using Risk Solutions.
"In order to make sure she gets the best rating possible, she subscribes to Standard and Poor's Risk Solutions," Clark said. "Now, I don't think that is right."
Stock markets should hire accounting firms to audit companies, Clark said. The business practice of companies hiring the accountants that evaluate them creates a conflict of interest.
Clark's colleagues at Harvard suggested stock markets raise money for accountants by assessing a .07 percent tax on each transaction, he said.
Harvard's Master's of Business Administration program in 2004 started a class called "Leadership and Corporate Accountability," an interdisciplinary class that examines law, economics, ethics and accounting.
It was tough for Harvard's business faculty to design a course dedicated to tackling tough questions without easy answers, Clark said.
He compared Harvard's revived interest in ethics to BYU-Idaho, where the entire curricula provides students a moral framework, which Clark described as a "lens."
"Because BYU-Idaho is affiliated with The Church of Jesus Christ of Latter-day Saints, standards are articulated in the honor code," Clark said.
All students take required courses about ethical and moral behavior and students are taught to examine the world through a specific lens.
"That lens of principles and values becomes a common framework to analyze problems," Clark said.
E-mail: lhancock@desnews.com