Reflections on the FCIC Report

The Financial Crisis Inquiry Commission issued its report on the financial crisis of 2008 this past week. The biggest controversy arising from the release of the report is whether the financial crisis could have been avoided. In what I believe is a fairly balanced and well-argued article in today's New York Times, Joe Nocera argues that it could not have been avoided - not so much because it was a phenomenon beyond the control of mere mortals - but more along the lines of "it has ever been thus." Nocera suggests that it is probably impossible to pinpoint the blame on a single person, agency, group, or circumstance. Rather, it was all of these - plus misbegotten human intentionality and human foibles. He notes that we need a psychologist more than an investigator to help us understand all that went on in creating this crisis. He ends by noting that the question about the financial crisis is not whether it will happen again, but when it will happen.

I pretty much agree with Nocera. At the same time, as an ethicist I think it is important to recognize that the ethical problem with the financial crisis was the number of people in the financial sector who jumped at the chance they saw to reap huge profits from the new laws. Even the part about encouraging people with scant financial resources to take out mortgages beyond their means didn't give them pause. This is a serious moral problem. It is for this reason that undergraduate and graduate business programs must not only teach business ethics but also need to teach virtue. This of course opens up the whole debate about whether such things can be taught. I think, though, that we are beyond this debate. Virtue must be taught. Surely there are enough ethics centers at universities in the country to take up the creative task of teaching our young some moral integrity.

The "Sacrifice" of Servant Leadership

One of the most interesting comments (to me) that came out of the panel discussion on servant leadership (“Lead from the Heart: Ethical Perspectives on Servant Leadership”; see March blog) had to do with the “sacrifice” of servant leadership. The perception was that foregoing the power model of leadership for a servant model entailed a sacrifice of some sort. I don’t know about the other panelists, but I was somewhat puzzled by this comment until I reflected upon it for a while.

Some people embrace servant leadership naturally. It bubbles up inside them as the only possible way to lead. As Robert K. Greenleaf says: “It begins with the natural feeling that one wants to serve. . . .” (Greenleaf Center for Servant Leadership; http://www.greenleaf.org/index.html)

But not everyone is so naturally disposed to servant leadership. They lead as they see others lead – and most of the time that is a power model. So perhaps the question this raises is whether one can be a servant leader if one is not naturally disposed to that model. I think one can. It may seem like (and even truly be) a sacrifice at first, but with training and commitment, I think someone can learn to be a servant leader. And after all, don’t we all have much to learn about being servant leaders?

I’m thinking here of Aristotle’s understanding of virtue ethics as something that must be learned and practiced – it is not innate. So if we think of the practices inherent to servant leadership as virtues that must be learned, clearly we all need to learn to be servant leaders. Another important aspect of learning virtue is to learn to associate pleasure with virtue and discomfort (even pain) with vice. Perhaps this is the key difference between those who embrace servant leadership and those who view it as a sacrifice. Those who have had some training and experience take pleasure in the dialogue, shared leadership, and mentoring. They have learned to associate pleasure with the gift of relating to and being concerned for others. Others simply haven’t had enough training or experience with this model to appreciate its virtues. To be formed in the model of the servant leader – that is, to become the kind of person who serves as a leader – we all must train and learn and practice. And of course, it takes our whole lives to become servant leaders. Remember Aristotle again: One swallow does not a summer make.