New Book from Transparency Task Force

Transparency Task Force Book

Dr. Kara Tan Bhala, founder and President of Seven Pillars Institute, contributed a chapter “Teaching Virtues in Finance Programs of Business Schools” to the book, Why We Must Rebuild Trustworthiness and Confidence in Financial Services; and How We Can Do It. She also was invited to write the foreword to the volume.

The book is the first serious attempt to reform finance through the application of Finance Development Goals.

The Finance Development Goals are the centrepiece of this book. The concept of the Finance Development Goals was conceived after a meeting between Andy Agathangelou, founding president of the Transparency Task Force, and Georg Kell, the founder and former Executive Director of the United Nations Global Compact, who was instrumental in the conception and development of the United Nations’ Sustainable Development Goals. 

That meeting took place at New York’s Pershing Square, over coffee and bagels. Andy found Georg’s explanation of his personal journey and his involvement with the conception and creation of the United Nations’ Sustainable Development Goals to be truly inspiring. Andy could see how the Sustainable Development Goals had become a highly effective framework for reform and he began to imagine a similar framework built around the problems in the finance industry that needed fixing. 

The 12 Finance Development Goals are:

  • Greater Purposefulness
  • Technology
  • Protecting Consumers from Harm
  • Authentic Communications
  • Better Risk Management
  • Better Governance
  • Product Design
  • Financial Stability
  • Virtuous Leadership
  • Responsible Reward
  • Transparency and Cultural Reform

Here is an excerpt from Dr. Tan Bhala’s chapter,

For Aristotle, humans are, by nature, neither virtuous nor not virtuous.  Instead, we have the capacity for virtue and are able to acquire them through habit. So Aristotle’s argument in the ageless debate of whether humanity is naturally good or bad is that it is neither but it has the capacity to be either.  To ensure that our capacity to be good is fulfilled it is therefore crucial that we acquire virtues through right training.   Just as we become harpists by playing the harp, so too, “we become just by doing just actions, temperate by doing temperate actions, brave by doing brave actions” (NE 1103b1-2).  Conversely, just as we have the capacity to become virtuous through correct training, we also may acquire vices through poor instruction.  

If humans are morally neutral by nature but possess the capacity to be good or bad, then virtue can be taught through a method Aristotle calls habituation, which means we continuously practice virtuous actions until they become a habit. We have to keep doing virtuous acts in order to get into the habit of being virtuous. Practice is a vital part of virtue. We do not become good by merely examining what is good.  Becoming virtuous requires us to be active.  Aristotle is interested in behavior modification through action.  By doing virtuous deeds repeatedly, our emotions are shaped to take pleasure in virtuous actions.  The pleasure we obtain from virtuous actions in turn determine the desire of future actions so that they align with the good.  

A prosaic example of hexis formation is how we teach our young children, to be brave, not in battle but in facing new situations, people and activities.  Since, we wish to cultivate a sense of adventure in them, we want them to try new things.  When they are clearly afraid of a new situation, we try to calm their fears by explaining how much fun it is to try out the new activity, the new friends they will make and other fun outcomes.  Hence, in this way we lessen their fears to a more manageable level and show them the pleasurable effect of the action of trying a new thing.  All this we do through reason, as far as possible for their age.  Although young, they are not closed to all reason. Critical activity and its enjoyment characterize all stages of development.  Often we persuade by example, i.e., we perform the task or enter the situation that we advocate.  In fact, at early stages, discriminatory activity will often take the form of imitation.  Through imitation, almost every child learns to size up situations that then adds to their store of experience and trains their cognitive abilities.  These abilities then go on to inform future reactions and emotions. 

A more relevant example of virtue formation through habituation is the training of a future financial leader to be honest.  She is first trained for honesty in the finance industry when she undergoes her undergraduate business and MBA degree courses. Which means of course, business programs at universities must change their purpose, which is to churn out alumni who are adherents of the neoliberal economic dogma, and thus, their syllabi. Currently, finance programs at business schools teach students the purpose of corporations is first and foremost profit maximization. At this moment in history, MBA programs are wholly inadequate in training virtuous leaders. They do not teach the budding finance leader to learn to get the right feelings of honesty in every transaction.  Close associates whose views of the individual matter a great deal to that individual reinforce these feelings.  Therefore, she must be honest, so associates think of her as honest.  If a disposition of honesty is ingrained, eventually the individual will not need other people in order to assess herself.  She will associate honesty with the noble and an end in itself. 

In sum, virtues are taught and then practiced until they become a habit and a person actually enjoys being virtuous. In the sphere of finance, business schools must be venues for training our future finance leaders to be virtuous (in business speak, virtues-based). But business schools are unashamedly failing at this task in this moment. Second, virtues flourish in a culture that values the practice of virtues such as honesty, integrity, and transparency. Virtues must form the fabric of an organization’s culture, and not merely be handy slogans or taglines. 

The oil on canvas artwork on the front and back covers of the book are painted by Aowen Jin, artist and social commentator.

Buy the book here.