Phil Angelides Calls for Ethical Finance

Phil N. Angelides ’74, chair of a federally-appointed commission charged with deconstructing the events of the 2008-2009 financial recession, lectured Wednesday afternoon at the Harvard Business School on the ethical responsibility of today and tomorrow’s financial leaders.

The lecture was sponsored by the Leadership and Values Committee, a student-led initiative comprising first and second year Business School students that seeks to merge the theory and practice of leadership, business ethics, and values.

Angelides served as chairman for the Financial Crisis Inquiry Commission, a commission appointed to investigate the Wall Street practices that led to the economic downturn of 2008-2009.

The Commission’s findings were released in January, and Angelides has spent much of his time since presenting the analysis to business leaders and students around the country and abroad.

In his lecture, Angelides emphasized that the financial crisis was avoidable and a direct result of human actions, recklessness in the financial sector, and the failure of regulators to protect the public.

Citing how officials in Washington describe the economic climate as a “perfect storm,” Angelides dismissed these claims and attributed much of the recent economic turmoil to poor leadership.

“What motivates me is that in the past year and a half I met so many families who were doing everything right, but then found themselves losing their jobs and losing their homes,” Angelides said. “I want to stand up for them and make sure it doesn’t happen again.”

Angelides encouraged students to gain experience in the public realm in addition to the private sector. He challenged audience members to help manage the financial system for the public good in their careers.

“He explained how we can keep a head on our shoulders,” William J. Fotsch, a student organizer, said. “We have to pay attention to the ethical implications of the business decisions we make.”

Angelides said he had deep concerns about the future, but he was ultimately optimistic about the capacity for ethical responsibility in leadership.

“Capital doesn’t have a conscience, but the people that manage capital do,” Angelides said.

HBS first year students Christopher B. Johnson ’07 and Fotsch organized the event in conjunction with Senior Lecturer on Business Administration Nicolas P. Retsinas, who additionally acted as moderator for the event.

“We wanted students to hear Phil’s perspective on how things went wrong, how things can change in the future, and most importantly—how you can act as a moral leader in an industry where it is tempting to be less-than-ethical at times,” Johnson said.