| A breakout session with Professor Rafael M. DiTella Monday, October 13, 2008
Drawing upon learnings from their work and experiences, the panelists and moderator exchange views with the audience on the ethics and legitimacy of business and capitalism in general, and the financial crisis in particular.
Robert Glauber, DBA 1965 Adjunct Lecturer in Public Policy, Mossavar-Rahmani Center for Business and Government
Michael Oxley Of Council, Baker Hostetler
Daniel Vasella, PMD 1989 Chairman & CEO, Novartis
The current financial crisis has raised questions about the legitimacy of capitalism. Ethical failures certainly played a role. While it remains to be seen whether and how many people blatantly broke the law, there are abundant signs of various forms of potentially unethical behavior. These include greed, unreasonable amounts of leverage, subtle forms of corruption (such as ratings agencies that appear to have had a conflict of interest), complex financial instruments that no one really understood, and herd behavior where people just followed along and failed to exercise independent judgment.
It is difficult or impossible to regulate against greed and against many of the other ethical shortcomings that have been seen. What can be done is to force greater transparency and accountability, a process which began with Sarbanes-Oxley and is expected to continue with new regulations of the financial system.