Subterfuge and business ethics: Is it a guy thing?

“History already has shown that Greenspan was wrong about virtually everything, and Brooksley [Born] was right,” says Frank Partnoy, a former Wall Street investment banker who is now a professor at the University of San Diego law school. (Stanford Magazine)

by Leigh Pomeroy

While listening to a speech entitled "Ethics in the Current Financial Crisis: How to Connect the Dots" by Dr. Thomas Donaldson Wednesday evening at Minnesota State University Mankato, I was struck by an all-too-obvious realization.

Donaldson is eminently qualified in his field. He is the Mark O. Winkelman Professor of Legal Studies and Business Ethics at the Wharton School. In addition, he has consulted for the United Nation and the FTSE Index (among others), and is a Trustee for the Carnegie Council on Ethics and International Affairs.

And yes, he did admit that a serious collapse of business ethics was a cause — if not the cause — of the current financial crisis. In fact, he even offered up a mea culpa for his own profession, saying, in essence, "Heck, we business school ethicists educated these guys. Did they just not get it or did we fail in our job?"

His speech mixed a certain amount of wonkiness suitable for his profession with enough entertainment in its delivery to hold the more plebeian, nonurban, Midwestern crowd he was addressing. And he suitably listed three reasons why this lapse of ethics could occur. But one observation he left out — one that struck me in a proverbial "ah ha!" moment:

All the names of the perpetrators of our current financial mess are male.

This hit me during the question-and-answer period when all the questions were being asked by men while fully a third of the audience were women.

And then I remembered reading just the day before about Dr. Elizabeth Warren of Harvard University, who has been tapped by Sen. Harry Reid to chair the Congressional Oversight Panel slated to oversee the bailout programs. Through her research on bankruptcy and regulation she was able to foresee what eventually happened. (See the Newsweek article here and her interview by Jon Stewart on The Daily Show here.)

And I thought of Sheila Bair, who has received nothing but praise in carrying out her role as Federal Deposit Insurance Corp. Chair. And of Brooksley Born, the former head of the Commodity Futures Trading Commission, who, like Bair, warned those in power about the dangers of unregulated derivatives and other exotic investment tools, only to be summarily ignored. (See this article in The Nation.)

These very smart individuals — all of whom knew the truth — are women.

Fortunately, all three are being recognized for what they've done. Warren by her appointment, and Bair and Born by being named this year’s recipients of the John F. Kennedy Profile in Courage Award.

But unfortunately, it's too late to prevent the debacle that has occurred.

We have already seen more and more women move into law, science, medicine, corporate governance and other heretofore exclusively male professions. And while they're not always making it to the top, their impact on those professions is steadily growing.

Perhaps finance is the last great frontier for women to challenge. I can't wait till they do. For no doubt when they do we'll have a much more honest and ethical Wall Street.