A post today on the Harvard Law School Forum on Corporate Governance and Financial Regulation signals that a century-old controversy has revived. Ben W. Heineman, Jr., posted ‘Management as a Profession: A Business Lawyer’s Critique’, a rebuttal to an article proposing professional certification for managers.
Heineman’s piece, which is worth reading, brought to mind Louis Brandeis’s great address at Brown’s 1912 commencement: ‘Business – A Profession’. He argued:
Business should be, and to some extent already is, one of the professions. The once meagre list of the learned professions is being constantly enlarged. Engineering in its many branches already takes rank beside law, medicine and theology…. The new professions of manufacturing, of merchandising, of transportation and of finance must soon gain recognition. The establishment of business schools in our universities is a manifestation of the modern conception of business.
Brandeis then defines ‘profession’:
The peculiar characteristics of a profession as distinguished from other occupations, I take to be these:
First. A profession is an occupation for which the necessary preliminary training is intellectual in character, involving knowledge and to some extent learning, as distinguished from mere skill.
Second. It is an occupation which is pursued largely for others and not merely for one’s self.
Third. It is an occupation in which the amount of financial return is not the accepted measure of success.
Is not each of these characteristics found today in business worthily pursued?
A Supreme Court justice four years later, Brandeis insisted on the moral dimension of business and, devastating to his legacy, of economics. ‘Business worthily pursued’ was not something the investment bankers of his day – ‘the money trust’ – and other monopolists and oligopolists embodied. So, his definition was aspirational.
Whether business is a profession or not, Brandeis gave us a standard to which we as investors and constituents should hold managers and directors.
Hat Tip: Dr. Raj Thamotheram