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The following is from the blog of Robert Bruner, the Dean of the Darden School of Business… nice to see academics suggest that schools can raise the standards bar for business people… everyone needs to help raise the bar on fraud and greed… too prevalent …. 

~~~~ ” … Every financial disaster deserves a scapegoat, because someone must be blamed when bad investments are made. Such scapegoats are seldom without fault, but their venality can easily be overstated. Equity analysts and corporate crooks took the blame after the technology bubble burst.

This time it could be the credit rating agencies.” Sure enough, a subsequent investigation by the SEC turned up some juicy emails that impair our confidence in credit ratings: one note said, “Let’s hope we are all wealthy and retired by the time this house of cards falters.”   So, the SEC imposed new rules on the agencies earlier this month. 

What is the place of B-schools in all of this?  My story and the recent news coverage about ratings certainly bespeak the importance of at least four virtues, which B-schools can help to instill:

** intellectual rigor around concepts such as objectivity, representativeness, validity, and significance;

**critical thinking—the frame of mind to check assumptions, logic, and conclusions;

**integrity, the ability to test processes and outcomes against deep values held by individuals, firms, and society.

**candor, the capacity to speak truth to power;

We’ve been here before.  The rash of business scandals surfaced around the turn of the decade because of the absence of these and other virtues.  B-schools responded then.  As best I can tell, they are responding in like fashion to the current crisis.

It seems inevitable that the ratings industry will change: more regulation; more transparency; more independence; and payment by investors rather than issuers—all of these are under active discussion today.  Certainly, the rating methodologies will come under intense scrutiny in the avalanche of litigation to come… ” ~~~~