Marketplace Business Simulations

Training Leaders to Manage Societal Impact

This article by Dr. Ernest Cadotte was originally published in full by AACSB.

In 2020, AACSB set new standards that placed greater emphasis on training future business leaders to take responsibility for the effects of their firms on all stakeholders. According to Caryn L. Beck-Dudley, president and CEO of AACSB International, “The new standards are principles-based and outcomes-focused … and serve as a higher calling to the purpose of business schools to make a difference in the world through positive societal impact.”

AACSB’s action coincided with several forces that have emerged over the past 30 years. These include a rise in conscious capitalism, social entrepreneurship, and socially responsible investing; an increase in businesses adopting environmental, social, and governance (ESG) policies; and a greater emphasis on the triple bottom line of people, profits, and planet. The United Nations provided additional benchmarks when it established the Principles of Responsible Management Education (PRME) in 2007 and the Sustainable Development Goals (SDGs) in 2015.

In 2018, Blackrock CEO Larry Fink released a letter in which he presented “a new model for corporate governance” and called on companies to focus on purpose, not just profits. Then, in 2019, the Business Roundtable, an association of CEOs, issued a statement that redefined the purpose of a business to include delivering value to all stakeholders. Today, 90 percent of S&P 500 firms publish ESG reports, and investment research firms such as Morningstar provide sustainable environment indices that highlight companies with low environmental impact.

Together, these forces are influencing business education. When the two of us conducted a review of 220 of the 541 AACSB-accredited programs in the U.S. (both in business and in business and accounting), we found that two-thirds have societal impact provisions in their missions, visions, and values statements. Consider the sampling of such provisions below.

Keeping reading to learn how schools can meet their societal impact goals.