Addressing Human Rights In Teaching and Research

• As global supply chains grow increasingly complex, the risks to communities around the world will only intensify.
• Business schools need to train future leaders to navigate and address supply chain challenges, regulatory shifts, and ethical dilemmas in an era of rapid change.
• Business courses can explore case studies and business models that show how complex supply chains, technological disruption, and corporate governance models can threaten—or protect—human rights.

 
In the early 1950s, the Ford Foundation made a major investment in business education. Its investment was driven by the foundation’s view that the study of business was integral to maintaining peace and prosperity through its capacity to promote democracy and economic development.

But at the time, the foundation’s assessment of the state of business education was unfavorable. In a memo, the foundation described business schools as “unimaginative, non-theoretical faculties teaching from descriptive, practice-oriented texts to classes of second-rate, vocationally minded students.” 

Subsequently, the foundation commissioned economists James Howell and Robert Gordon to conduct a comprehensive 1959 study of business education in the United States. In it, Gordon and Howell proposed a model of education that places greater emphasis on theory, becoming “a process of self-development, in which the student develops the capacity to see the relevance of what is being learned and to build on this knowledge an ability to deal with problems that he will meet in later years.”   

Through these early efforts, the Ford Foundation elevated the academic rigor and reputation of American business schools in ways that still remain important today.

However, some experts believe the pendulum has now swung too far toward theory, leaving many business school professors operating in disciplinary silos, disconnected from practice. Additionally, critics argue, because the transformation inspired by the Ford study leans so heavily on economics and shareholder primacy, American business schools have not done as much as they could to address the broader societal and long-term impacts of business in a changing world.

Since the 1950s, the business landscape has undergone three dramatic changes with the potential to negatively impact people around the world. As I outline in my book, Conscience Incorporated, business schools can do more to address these shifts in their classrooms—and in doing so, mitigate their harmful effects.

By highlighting case studies and offering practical models that illustrate how companies are addressing these three challenges effectively, management professors can train future leaders who are committed to protecting human rights. 

No. 1: Increasingly Complex Supply Chains

As the world’s economy continues to grow, many large multinational corporations will become more heavily dependent on global supply chains. These are the companies that follow Peter Drucker’s maxim: “Do what you do best and outsource the rest.”

But there are significant challenges associated with this approach. Global firms often operate in countries where local governments are either unwilling or unable to protect their own people, creating a governance gap. Human rights risks are much greater in these places, where vulnerable workers do not have the protections they deserve.

In effect, many global companies have outsourced their responsibility to protect human rights to their local suppliers or business partners, without providing the resources necessary to meet these challenges. That’s why courses in supply chain management should examine how this global outsourcing model impacts human rights. Students should grapple with tough questions concerning how far and deep corporate buyers need to go to assume responsibility for the labor practices of their suppliers.

Global firms often operate in countries where local governments are either unwilling or unable to protect their own people and vulnerable workers do not have the protections they deserve.

In their courses, management professors can highlight practical models of how companies are answering these questions. For instance, faculty might draw examples from the Fair Labor Association (FLA), a 25-year-old multistakeholder group, whose board I chair. More than 50 FLA corporate members—who are representatives of leading apparel and agricultural companies—work alongside hundreds of civil society organizations and universities to address risks in their supply chains in practical and effective ways. Together, they create solutions that are based on shared industry standards and a credible system for evaluating company compliance.

One such solution is the FLA’s Fair Compensation Toolkit, a groundbreaking effort that allows companies to measure the gap between what workers earn and what they need. Another example of the association’s work focuses on India, where its Harvesting the Future initiative brings local textile producers together with 24 global apparel companies to improve working conditions for cotton producers, harvesters, and their families.

The FLA offers business students a perfect illustration of accountable supply chain management. More broadly, business courses should assess the strengths and weaknesses of other multistakeholder organizations in different industries.

No. 2: Widespread Technological Disruption

Another major force substantially affecting the environment for business and human rights is the emergence of advanced technologies. In 1959, the world was just beginning to adjust to the television age—it was still decades away from the advent of personal computers and artificial intelligence (AI). But today we live in an era when new technologies with ubiquitous power and influence are rapidly reshaping our world.

Business schools are scrambling to keep up with technological advancement, as they examine the seemingly limitless opportunities that 21st-century tools present. Business schools at institutions such as Stanford University and the Massachusetts Institute of Technology are devoting ever-greater attention to how AI and other technologies are transforming the business landscape. But too few of their courses spend time on how the world’s governments are regulating major technology firms.

Social media platforms are perhaps the most prominent examples in this regard. Pharmaceuticals, air travel, television and radio, and a range of other sectors are subject to government regulation. But social media companies have little to no oversight—at least in the U.S. One reason for this relates to the scope and instantaneous nature of online communications—regulation of these platforms is difficult, because it must abide by constitutional free speech protections.

But regulation is coming—and in Europe, it is already here. In November 2023, the European Union passed the Digital Services Act (DSA); it went into full effect on February 17, 2024. Among other things, the DSA requires social media platforms to provide governments with greater transparency in the workings of their algorithms. Several U.S. states—including California, Louisiana, New York, Texas, Maryland, Utah, and Colorado—are moving in a parallel direction, all part of evolving efforts by governments to regulate these new technologies.

It is becoming increasingly essential for business schools to ask a key question: Where and how should their faculty integrate discussions about the regulation of digital tools into their teaching and research?

No. 3: The Increasing Power of CEOs

A third dramatic shift in business relates to the relationship between CEOs and the companies they lead. Historically, CEOs were senior employees and managers of companies; they were well-paid but not excessively so. In 1965, the ratio of CEO compensation to that of the lowest paid workers was about 21-to-1.

Today, the ratio is more than 350-to-1. Since the early 1990s, CEO compensation has shifted mostly to stocks and options, encouraging CEOs to prioritize short-term financial performance over the long-term sustainability of their companies.

Business scholars can make it a priority, in both their research and in their classrooms, to promote longer-term investment models that rigorously assess environmental and social harms.

Forward-thinking business scholars such as Luigi Zingales of the University of Chicago and Oliver Hart of Harvard University forcefully advocate for investment firms to create models for ordinary investors who prioritize environmental and human rights objectives. Some European fund managers have begun to adopt a double materiality framework under which investment managers assess financial returns and social consequences.

Embracing Our Social Contract

Each of these areas presents exciting opportunities for business schools to expand the scope of their teaching and research. Business scholars can make it a priority to promote, in both their research and in their classrooms, longer-term investment models that rigorously assess these environmental and social harms.

They face three major challenges that have constrained efforts to address these topics—but, fortunately, each challenge has a straightforward solution.

First, business school curricula are already overcrowded. Schools can address this challenge by integrating these topics into existing courses.

Second, some schools lack business-oriented teaching resources that discuss societal impacts and human rights. The good news is that more resources have been developed over the last decade, fueled by efforts supported by the International Labor Organization and the excellent work of the Global Business School Network.

Finally, there is still a dearth of faculty with expertise in these subjects. But this field is now attracting a growing universe of younger business scholars who possess a strong desire to teach and conduct research in these areas.

Andrew Hoffman, who has written on the responsibility of business faculty to reimagine the purpose of business, provides a useful research guide in his book The Engaged Scholar. As Hoffman suggests, business schools should hearken back to the writings of Howell and Gordon and pursue a vision of business education that helps prepare future leaders to be problem-solvers and ethical thinkers in the 21st century.

AACSB has acknowledged in its Collective Vision for Business Education report that addressing societal challenges should be a major objective of business education. AACSB has made this explicit in a recent white paper, which points to the association’s adjusted accreditation standards that incentivize business schools to assess societal impacts.

These positive efforts reinforce the Ford Foundation’s early agenda to urge business schools to serve as forces for good. Business schools now have a unique opportunity, and responsibility, to ensure their graduates view success through a wider lens—one that encompasses not only financial performance, but also ethical decision-making, sustainable business practices, and human rights protections.