Shortly after the eyeball-popping terrorist attacks of 9/11, US investors on Wall Street came under a gut-wrenching attack of another kind.
It was an attack similar to the kind we all saw last week when markets around the globe lost an estimated US$6 trillion (about S$9 trillion) in a non-stop wave of panic selling. (This humongous loss, over just five days, is equivalent to snatching away US$3,600 in hard-earned savings from every family of four on this planet.)
Then, big corporations like Enron and WorldCom admitted that they had overstated their earnings by billions of dollars.
They went bankrupt, so did a few other big companies which had done the same.
All in all, these scandals wiped out some US$500billion worth of investments in US stocks.
The current crisis and the one in 2001 had one thing in common. CEOs, many of whom had MBAs from top universities, were too greedy.
In a new article in the Harvard Business Review, Rakesh Khurana and Nitin Nohria - who both teach at the Harvard Business School - say that it is time for a managerial version of the Hippocratic Oath, to which all doctors must swear.
Implicit in their argument entitled 'It's Time to Make Management a True Profession' is a criticism of the MBA degree itself, which many of today's failing managers hold.
According to the two professors, true professions have codes, and the meaning and consequences of these codes are taught as part of the formal education required of their members.
Two schools of thought
But the main challenge in writing an enforceable Hippocratic Oath for CEOs lies in two deeply divided schools of thought.
One school argues that management's aim should simply be to maximise shareholder wealth; the other argues that management's purpose is to balance the claims of all the firm's stakeholders.
Professor Jeffrey Pfeffer of Stanford's Graduate School of Business thinks the oath itself will do little to change things.
'This oath, in and of itself, will do little or nothing to professionalise management. That does not mean it is a bad idea, only that a pledge is insufficient to fix the problem.
'The core issue is that business education uses economic language and theory as its primary foundation, and economics proceeds from the assumption of self-interest. It is hard to 'square' that intellectual foundation with a pledge to take the interests of other parties into account.'
Indeed, of late, there has been much tongue-lashing at the failure of the MBA courses that Wall Street's 'best and brightest' took before rising up the ranks of global finance and making those big mistakes.
As I see it, the question is do we need MBAs at all to recognise the fact that someone is a good manager?
Many, after all, believe that management is as much art as science, better mastered through experience than formal education.
I asked Professor Pfeffer (who taught me 'Power and Influence' at The B-School).
He said: 'I don't think experience is the only valid teacher... Management education could add more value and may - given the many reforms in business school curricula now being implemented.'
Nobel Prize-winning economist A Michael Spence, however, believes that an MBA is merely a signalling device: Going to a business school allows individuals to credibly signal their greater commitment to a career in management.
And many MBA students have yet a different perspective: They believe that business school is simply an opportunity to develop a robust network of peers and alumni.
Indeed, the success of iconoclasts like Bill Gates - a Harvard dropout, no less - might suggest that a lack of formal management training was a positive advantage in becoming a successful entrepreneur.
Zhen Ming, a Harvard-trained economist based in Singapore, is a freelance contributor.
This article was first published in The New Paper on October 12, 2008.
