02/25/2014 12:01 pm ET Updated Apr 27, 2014

An Education in Ethics

Awards season is in full swing and Martin Scorsese's The Wolf of Wall Street is a serious contender. The film earned a Golden Globe (Best Performance by an Actor) for Leonardo DiCaprio, as well as numerous nominations, including five Academy Awards. The Wolf of Wall Street tells the story of Jordan Belfort, a stockbroker living the high life on Wall Street and his fall into corporate crime and corruption.

It is up to business schools to motivate their students to see The Wolf of Wall Street as more than just an entertaining story isolated from school and work. Business schools have an obligation to provide students with the skills and knowledge essential for success in business. Such skills cover management, marketing, finance and more, but The Wolf of Wall Street demonstrates why ethics is another tool whose importance cannot be overstated.

Some students are skeptical about how ethical scenarios presented in class apply to real life, and there is debate among faculty about whether or not ethics can be taught to college students. While it is agreed that everyone will face an ethical dilemma at some point in their career, their degree of difficulty will vary. These situations aren't convenient, often require quick and strong action and can cause much collateral damage if handled improperly. The various levels of ethical issues often lead managers to hand out generic, vague or superficial advice, such as, "Do the right thing," or, "Is this something you'd want your mother to read about?"

Clear law-breaking behavior may generate headlines or make a good movie, but it represents only the tip of the business ethics iceberg. Many difficult ethics problems are cemented in the gray-area decisions that firms and managers must make every day. Many factors can stack the deck in favor of one side, including the way in which disclosures are worded, the amount of text in the fine print and the manner in which disputes will be resolved. Is it wrong for a business to take advantage of tactics that are legal, but perhaps take advantage of others? Is it acceptable to stake out positions in the gray area that will generate good company numbers?

Because of the complex and nuanced nature of business ethics, business schools are creating a variety of new ethics courses and approaches, including enhanced corporate social responsibility (CSR) programs, ethics oaths and specific training modules. One new approach seeks to instill in students a checklist of questions/actions to apply whenever an ethics issue arises. The aim is to force ethical problems into the open, such that students feel compelled to find a solution instead of looking the other way and telling themselves it is not their decision to make. Fortunately for educators, students are idealistic and generally wish to have careers that contribute to society. They seek jobs that will grant them the opportunity to display leadership on a range of CSR issues, including responsible sourcing on the global supply chain, community and economic development initiatives, and sustainable environmental practices.

Another indicator of the need for attention to ethics is the growing evidence of cheating among students. It is frightening that business students seem to cheat at significant rates. It is more frightening that the cheating base rate across all students is often above 33 percent. This has led to many interesting conversations among faculty. I was recently asked about surveillance drones that could be employed in classrooms to monitor students during exams. Whether or not this is technically possible, the mere discussion demonstrates awareness of a problem that could soon be transferred to the workplace. To solve the problem, we must evolve our approaches to ethics education and remain focused on this issue throughout school -- not just when the headlines report major scandals in the business world.

An ethics education can be difficult to drive home, and one of the biggest reasons why is the disconnect between in-class discussions and real-world situations. One of the most significant obstacles faced by educators is finding a way to recreate scenarios in a classroom setting in which students can understand the complexities of ethical decision making. Without any real implications, how can students understand and learn how to behave in the midst of an ethical dilemma? One of the best ways to teach students about ethical responses in a crisis situation is to give them real-world experience, be it through immersion or appointing MBA students as honorary members of local businesses' boards to work on strategic leadership projects.

A second obstacle is the debate surrounding whether or not ethics is a stand-alone topic or should be integrated into all business disciplines. In some instances, disagreement on the topic has led educators to avoid addressing ethics altogether. However, we could likely agree that no attention paid would be worse than an imperfect ethics education approach.

A third obstacle is that recruiters are often less sensitive to ethical education because companies have their own training programs for newly hired employees. Completion of an undergraduate or MBA-level ethics course won't make or break an employer's decision, but demonstrating a solid moral compass does go a long way.

Despite the obstacles, ethical education is more important than ever. Tomorrow's business leaders must deal with technological intrusions and vulnerabilities that were not imagined 10 years ago, as well as the wake of ethical lapses that caused the 2008 financial crisis. Business schools have given lip service to ethics for more than 50 years. We must begin to walk the talk or we will continue to see ethical lapses and greater government regulation.