For full disclosure

The documentary “Inside Job” has triggered a debate over ethical conflicts at Columbia University and the business world at large, leading to a reevaluation of the University’s disclosure requirements. The film emphasized alleged conflicts of interest of two prominent individuals in the University—Dean R. Glenn Hubbard and professor Frederic Mishkin, both from the Business School—and the fact that such transgressions can and do occur point to serious holes in University policies regarding disclosure protocol.

The film highlighted that in addition to serving as the Dean of the Business School, Hubbard sits on the board of Metropolitan Life, a global insurance provider. This position rewards handsomely—Hubbard is compensated $250,000 annually, which is only one of his many external ties. Mishkin was paid almost $135,000 in 2006 by the Icelandic Chamber of Commerce to write a report detailing the stability of Iceland’s financial situation.

While their consulting activities are ethically questionable in their own right—Mishkin’s report predicted the economic stability of a country that would default just two years later—and indicate an extensive lack of responsibility in the financial world, it is unclear whether Hubbard and Mishkin violated the University’s conflict of interest policy as it currently stands. Rather than pardon Hubbard and Mishkin due to insufficient evidence of a transgression, we demand a higher standard of ethics from members of our University who are influential both at Columbia and in the global community.

At the moment, Columbia’s weak disclosure policy requires all faculty members to reveal sources of funding for research that is related to Columbia, in addition to funding they may receive from organizations that stand to profit from their research. They are not required to disclose outside compensation from consulting as long as it does not directly relate to University research. Instead of being open to the public, these disclosures are held confidentially, which explains how such widespread ethical conflicts could arise in the first place.
Though it would be ideal to have full, public disclosure that includes consulting work, it seems that neither the University nor the financial world is ready to implement such a drastic change. At the very least, the University should start by requiring consulting work to be disclosed to the administration.

Concerns have been raised that stricter policy stipulations and implementations would make Columbia less appealing to high profile faculty—but what sort of professor would reject an offer from Columbia due to high ethical standards? Any professor or researcher who finds strong disclosure policies a shortcoming is not an individual we want at our University. Senior Vice Dean Christopher Mayer, appointed by Hubbard to lead the Business School’s review of the conflict of interest policy, echoed this hesitation in implementing a stricter policy. Mayer’s expressed disapproval of stronger policy implementation, not to mention the outrageous fact that he was appointed by the man who is at the center of this scandal, invalidates the entire policy review.

Though we understand that when professors act as consultants they have to be mindful of client confidentiality, fears that revealing consulting work will result in disapproval are perturbing—a faculty member who represents the University should not receive compensation from an organization that he is uncomfortable disclosing information about.
When a member of our University consults for a company or endorses an organization, he or she implicitly benefits from Columbia’s name and prestige. Columbia’s reputation is a shared resource, and anything that tarnishes its name affects all its constituents.

The only way to ensure that Columbia’s name and her ethical standards remain untarnished is to implement better, stronger, and clearer disclosure policies.