University of Maryland: Lessons from the Cellblock

New ethics certificate program takes executives deep inside the world of white-collar crime.
Craig SchneiderApril 2, 2002

Some of the best teachers of business ethics might be behind bars.

To be sure, federal prison is an unlikely venue for executive education—and a strange place to find an ethics instructor. But the University of Maryland’s Robert H. Smith School of Business has been using a minimum-security facility as a training ground for its MBAs for years. Just recently, the school announced its plans to put executives behind bars—temporarily.

Tailored for CFOs and other company officers, as well as directors, partners, and managers, the June 11 to June 14 program will include a face-to-face interview with a former executive doing time for a white-collar crime.

Some scene-setting will take place. On the ride to the Cumberland, Maryland, prison, Roger Boisjoly, the engineer who tried to avert the Challenger disaster, will speak to the executives about the ways in which deadlines and other pressures within companies can spawn ethical lapses.

The prison visit purposefully paints a bleak picture. While the guards don’t carry guns and there are no walls, you can’t leave, says Stephen Loeb, co-director of the program and professor of accounting and business ethics at the Smith School. Loeb has been taking Smith’s full-time MBA students on the prison visit for the past six years.

Executives’ lingering visions of inmates living the good life and playing on the back nine of a golf course quickly disperse. “It’s not a nice environment,” he notes. “You don’t want to be there. You are being warehoused for a long period of time.”

Later presentations reinforce a “scared straight” mood. “We don’t want this to be make-believe,” says Scott Koerwer, associate dean and director of the center for executive education at the Smith School. “We want executives to have a look at what can go wrong, and if and when that happens, what that would mean and where you would end up if you fall into various traps.”

To dramatize the traps, the program’s organizers will run role-playing exercises in which participants can experience what government enforcement of ethics lapses is like. Also included are crisis-communications coaching, instruction in the effects of corporate incentives on ethics, and social-responsibility lessons. A maximum of 45 participants will pay $3,150 each for the total experience.

The Net Closes In

The executives will also be treated to a sense of the way it feels when the net closes in. Loeb’s co-director William Shepherd, a Washington, D.C., lawyer and Smith executive education fellow, will walk the executives through the judicial-process ethics that perps go through.

Starting with the first investigations by law-enforcement officials and regulators, Shepherd plans to take the executives through to the grand jury subpoena. Along the way, he will detail differences in state regulatory processes, counsel representation, and sentencing guidelines.

The lawyer also plans to cover the impact of wrongdoers’ acts on their families. “Your kids can’t play with the other kids, you’re thrown out of the country club, [and] you can’t work in the industry you’ve devoted your life to,” says Shepherd. “Even after you’re released from the end of your sentence, you’re still not going to be able to go back to the life you had before you were convicted.”

Prison time, of course, would be an extreme consequence of an executive’s unethical behavior. The threat of a cease-and-desist order that could cripple businesses and careers is more likely, he says. That alone should instill extreme caution. Shepherd’s advice: “If you have to think about something more than twice, don’t do it.”

While members of Congress have harangued Enron executives about their ethics, whether their careers and fortunes will suffer remains to be seen. Still, the Enron collapse has sent companies scurrying to prove their uprightness to shareholders.

Not surprisingly, Maryland’s executive ethics program is being marketed to that need. Corporations are seeking ways to demonstrate their commitment to being good corporate citizens that go beyond “a couple of posters around the office,” says Shepherd.