Business education must prioritise planet and purpose as well as profit

As politicians from around the world converged on Glasgow last month for the COP26 negotiations to tackle climate change, the leaders of some of the top business schools in Europe geared up to make their own contribution.

The heads of Cambridge: Judge, Oxford: Saïd, HEC Paris, IE, Iese, IMD, Insead and London Business School unveiled a programme of webinars, a climate leadership toolkit and plans for wider co-operation under the umbrella of Business Schools for Climate Leadership — or BS4CL for short. And they insisted it would amount to more than the first two of those initials.

Compared with business schools in other parts of the world, those in Europe — notably in the Nordic countries and the Netherlands — have long taken the lead on sustainability matters. Their peers have followed with a growing range of courses, student initiatives, specialist institutes and dedicated faculty positions.

Yet as Colin Mayer, a former dean at Oxford: Saïd Business School, argues in our latest annual assessment of European institutions, there is still a divide between slow action by educators on one hand and evolving business practice, regulatory pressures and demands from students and society on the other.

Top 95 European Business Schools ranking of 2021

Find out which are the best European business schools, according to the Financial Times. Also, learn how the table was compiled.

Drawing on his work leading the British Academy Future of the Corporation programme, he says shareholder primacy still dominates over purposeful business in teaching. Even among those such as the BS4CL schools, none “has gone far enough in placing corporate purpose at the heart of core courses”.

One reason is inertia at the schools, which have long grown and developed expertise based on more traditional approaches and values. Another is that many businesses remain ambivalent or slow to shift. To reform the schools, they will need to send clear signals to deans on the types of future managers they want to recruit, the training required and the best research insights to use.

A final factor, in Mayer’s view, is the influence of business school rankings themselves, with assessments of performance based heavily on factors such as salaries, which push towards retaining pedagogy that favours the old profit-maximising model.

The FT’s own rankings, including this latest “ranking of rankings” of European schools, give credit for the best graduates recruited into jobs such as investment banking, for which high pay is a good proxy for outcomes. But they also remove lower salaries of those who go into other jobs, such as those in the public and non-profit sectors, to reduce any discrimination against schools and students pursuing less lucrative careers.

We aim to further reduce the weight given to salaries in the future. The challenge is to find alternative credible measures to compensate that are consistent, comparable, outcomes-based and feasible to collect. That requires fresh thinking — including by business schools — in assessing the quantity and quality of teaching, research and how their own operations are aligned with people, purpose and planet alongside profit.

Rankings still have a role to play as a benchmark for students, school managements and employers alike, given the explosion of new programmes and business schools. They provide a filter and a form of accountability, which is important given both the substantial fees charged and the opportunity costs of taking business degrees.

The FT’s approach is to be consistent and transparent in the methodology used, to encourage readers to examine the individual data points, to focus on the issues that concern them most and to look at the overall tiers or groups of schools, rather than just the overall ordinal rankings.

The rankings also provide an entry point to wider reporting and analysis of business education, and the varied and rich approaches adopted by the different institutions. This report profiles a range of schools, faculty, alumni and broader important trends in the field.

European schools have certain advantages. They are generally more affordable and typically offer a more diverse cohort of students and faculty from different countries.

Despite intensifying competition from North America and Asia, European schools have certain comparative advantages alongside sustainability. They are generally more affordable — and often with shorter courses — than their US counterparts. They typically offer a more diverse cohort of students and faculty from different countries.

Like their peers in other regions, they have been forced to innovate swiftly in a process intensified by the pandemic. Some are developing fresh specialisms, such as in healthcare or training arts managers, as well as using communication, performance, design and music to develop their students’ skills.

Others are using podcasts, YouTube lectures and even television documentaries to give direct insights, not just from executives and entrepreneurs but from figures out of the ordinary, such as pirates and money launderers. The European Common Online Learning initiative is developing a shared curriculum and fostering virtual international exchanges. European business school innovation continues apace.

Andrew Jack is the FT’s global learning editor

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