“Ethics classes will be pretty ironic won’t it?”

I recently received the following comment from ANP on an April 2011 MBA Admissions News Round Up:

“I had posted that you are not giving a fair view to potential ISB applicants by ignoring the fact that Rajat Gupta was accused in the Galleon insider trading scandal. But well he has been convicted now. How does that change your view of ISB now that it’s founder is a convicted white-collar criminal? Ethics classes will be pretty ironic won’t it? I hope to see a post informing readers about this.”

Just in case there is an MBA applicant out there who doesn’t know, Rajat Gupta is an IIT grad and Harvard MBA who went on to become the Managing Director of McKinsey & Company. He co-founded the Indian School of Business and was chairman of its board until 2011. He also served on several corporate boards, including those of Goldman Sachs, AMR, and P&G; educational boards, including that of University of Chicago, Harvard Business School, Lauder Institute, Kellogg, MIT Sloan, and Weill Cornell; and charitable boards, including the Gates Foundation, India AIDS Initiative, World Economic Forum, and more.

Rajat Gupta was convicted last Friday of insider trading.

An arms-long list of felons either graduated from or actively supported business schools of varying pedigree, including Harvard (Gupta, Jeffrey Skilling), Wharton (Milken, Rajaratnam), and Kellogg (Fastow). Ivan Boesky, who was convicted of insider trading in the late 1980’s, actually taught at Columbia and NYU Stern prior to his conviction. These are just a few names that came to my mind; there are more.

Certainly the Hall of Shame from the last twenty-five years does not seem to have damaged the reputations of these programs or their ability to educate students and send grads on a trajectory of professional success. And the convictions of McKinsey alumni Skilling and Gupta haven’t diminished McK’s allure.

While certainly not badges of pride or associations to tout, the failings, mistakes, and even crimes of individual members of a community or institution don’t determine the value of that education or institution — provided the institution disavows and discourages the criminal behavior and that behavior is the exception rather than the rule. Those misdeeds belong to the individuals who went down the slippery slope and made the big mistakes that they are now paying or have paid for so dearly.

Unless moral purity is your sole criterion for choosing a school, I recommend that you choose schools based on the following:

1. Ability to help you achieve your professional goals.
2. Curriculum you want to study in the way you want to study it.
3. Attractiveness of the school’s student life and extra-curricular activities.
4. Personal preferences regarding location, family needs, etc.
5. The likelihood of your acceptance.

ANP asks about ethics classes taught at ISB in light of Gupta’s conviction. In fact, last year an HBS prof corresponded with Bernie Madoff about his ponzi scheme; the purpose of the correspondence is research for a series of case studies. Business schools frequently bring in convicted felons to speak about their crimes and punishment. My understanding is that students have found these presentations more impactful than theoretical books and seminars with Thou Shalt’s and Thou Shalt Not’s.

How does Gupta’s conviction affect my opinion of ISB? It doesn’t. It affects my opinion of Gupta.

How about you?

By Linda Abraham, president and founder of Accepted.com and co-author of the new, definitive book on MBA admissions, MBA Admission for Smarties: The No-Nonsense Guide to Acceptance at Top Business Schools.