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Given that almost every business decision affects people, every decision has an ethical dimension. Therefore, ethics should be covered in practically every course. The Character of a Leader Domènec Melé Chair Economics and Ethics IESE Business School University of Navarra Barcelona, Spain Ethical business leaders are defined by their characters, which are revealed by the posi- tive moral habits they develop during their lifetimes. These virtues have an obvious place in the corpo- rate environment. A manager with courage, for instance, will make and implement hard choices. A just manager will treat all people fairly. A manager with practical wisdom will make thoughtful decisions. Other positive virtues are also critical for ethical manag- ers. Integrity promotes credibility. Humility leads a manager to listen to others and, hence, detect errors in their earliest stages. Moderation fosters personal harmony and prevents excesses such as rage in the workplace. Classic management theorists such as Mary Parker Follett and Chester Barnard placed great importance on the moral integrity of managers. A few more recent management experts also stress integrity. For instance, in his book Good to Great, the author Jim Collins shows clearly the important role played by leadership vir- tues he categorizes as "professional will" and "humility." However, nowadays an opposing view is just as prevalent in many places. Many believe the primary role of managers is to adapt their organizations to social pressures and continually maximize shareholder value. In addition, some mainstream managerial theorists—such as those who subscribe to trans- actional cost theory and agency theory—position managers as completely egoistic beings who need strong incentives for aligning their interests with those of the shareholders. They argue that this is the only way to stop managers from behav- ing opportunistically. But this position is under increasing criticism from other scholars. Many believe that virtuous managers will do what they con- sider best not only for shareholders, but also for other stake- holders and the organization overall—whether or not they are under tight control and incentives exist for them to do so. Obviously, it would be naïve to assume that all managers are virtuous and that there is no need for appropriate controls and incentives; but it is also unrealistic to believe that managers are 28 BizEd SEPTEMBER/OCTOBER 2006 completely egoistic individuals. If businesses operate under this last assumption, manag- ers will suffer pressures to act only in favor of short-term shareholder interests. The hypothesis of opportunistic behavior easily becomes a self-fulfilling prophecy. Consequently, integrity, courage, humil- ity, and other virtues are important qualities in a manager and should be considered and evaluated as part of recruitment, selection, and promotion processes. Similarly, when business schools are deciding which stu- dents to accept, they should consider factors other than GMAT scores and other cogni- tive and skill criteria. After all, schools are training students to become executives. The managerial aptitude of executives depends not only on their skill, intelligence, and experiences, but also on their characters. I think that business education should foster moral char- acter development in students, or at least avoid its erosion. Case studies should allow for the discussion of character and the consequences of unethical behavior. Unfortunately, cases often are written only for the purpose of strategic analysis. Students are not encouraged to consider other important aspects of business decisions, such as the effect on human relations, the generation or destruction of social capital, and the impact on the physical environment. In the effort to create more ethical managers, courses on business ethics or corporate social responsibilities offer good starting points. They encourage students to reflect on the purpose of business in society, for instance, or the difference between subjective or social values and human or ethical val- ues. They also make students consider ethical rationality as op- posed to instrumental rationality. But such standalone classes are not enough. Given that almost every business decision af- fects people, every decision has an ethical dimension. There- fore, ethics should be covered in practically every course. Some faculty try to introduce ethics in courses such as mar- keting, corporate finance, general management, and indus- trial relations by showing the limits of certain management and organizational theories and their ethical consequences. These professors also promote student awareness of ethical issues and encourage moral reasoning among students—not just economic and politic reasoning. Not all faculty stress to their students the role that virtues play in the lives of business managers. Yet I believe more faculty need to follow this path if we want to increase the ethical standards of our business students and, by extension, our business leaders.