How does one get into college? It requires years of diligent studying, extracurricular activities, athletics, music, honor rolls, etc. You complete the SATs, write a compelling essay and submit an application. However what happens after that, behind the closed doors of the admissions office, no one knows. And therein lies a big problem.
In what the FBI has dubbed Operation Varsity Blues, wealthy families falsified their children’s way into some of the nation’s top schools.
For all the effort students (and their parents) invest to earn admission to a prestigious school, there is very little insight into the selection processes. We’ve long known that some have advantages others don’t – legacies, celebrities, and families who make large contributions have always had an edge. We also understand the precautions testing organizations take to prevent cheating, including attempts to prevent substitute test-takers. A few might beat the system, or work around it. But on balance, we believed hard work and merit was a formula that would work.
However, in the wake of the college admissions scandal coming to light last week, we have all learned a new lesson – cheaters can win. The system is more rigged than we thought. And the schools themselves are in on it.
In what the FBI has dubbed Operation Varsity Blues, wealthy families falsified their children’s way into some of the nation’s top schools. Test scores were bought or forged, coaches of minor intercollegiate sports programs were bribed and millions of dollars were exchanged for potentially life-changing, career-defining college educations. Reports claim this particular scandal went on for almost a decade, involved nearly 800 people, and more than $25M changed hands. Depending on your experience with bribery and corruption, this scandal may seem extensive or slight, but it is nonetheless significant.
The most significant lessons here for executives and compliance professionals are those on trust and transparency. More specifically, the abuse of trust that can persist due to a lack of operational transparency.
What Can Executives & Compliance Leaders Learn?
Influence Needs Oversight & Daylight
One tactic to accept students who did not meet academic standards was to accept them as athletes. These athletes were usually associated with minor, non-revenue generating sports programs that receive little exposure on or off campus. This raises the question: How do coaches of minor and even obscure college sports programs like sailing, fencing and squash have enough sway to propel any candidate of their choosing swiftly through the admissions process? What oversight exists to ensure that the admissions process for student athletes is above reproach? What background checks exist to ensure these students are actually qualified athletes? What trainings do coaches receive on the admissions process, on anti-bribery and on how to report concerns that the process may be being abused? And finally, why is there such secrecy around the admissions process; why not transparency?
What executives can learn from the Operation Varsity Blues scandal is that lax processes, oversight and training can lead to incredibly bad outcomes.
What executives can learn from the Operation Varsity Blues scandal is that lax processes, oversight and training can lead to incredibly bad outcomes. And a lack of transparency into key business processes introduces levels of risk that allow for bad actors to behave in inappropriate ways.
Secrecy and Complexity are the Antithesis of Transparency
Single sources of compliance failure, like a coach, dean or admissions officer, cannot succeed in their duplicity without a web of complexity and secrecy shrouding their activities. Consider the mystery of the college admissions process. Few people outside of the admissions office understand the alchemy that results in acceptance into a college or university. But even more concerning, it is now clear that the majority of school faculty and administration have no clear understanding on the criteria or the process either. (Although apparently a few minor sport coaches do.)
Complexity exists in the business world, but complexity coupled with secrecy opens the door to compliance failures.
Effective oversight requires process understanding. If audit or compliance personnel do not understand the key processes of a business unit, they are not able to provide the necessary oversight for the functions within that unit. Complexity exists in the business world, but complexity coupled with secrecy opens the door to compliance failures.
Corruption Takes a Village
“Integrity” is explicit in the code of conduct for many of these universities, but clearly it was not embedded into the culture. With so many people and institutions involved in the scheme, internal and external individuals had to turn a blind eye to what was happening. Whether you are the person paying or taking the money, or the one adopting willful ignorance or strategic justification, you are part of the system that allows corruption to persist. Somebody always knows. But to raise alarm, employees need to have confidence in their culture of speaking up.
The Road Back to Trust Is Paved with Transparency
The road to regain trust for these institutions will no doubt be uphill. According to the 2019 Edelman Trust Barometer, trust in education institutions was at 70 percent – the second most trusted industry in the report. Unfortunately for the world of higher education, we should expect to see a shift in this sentiment next year. As an indication – the financial services sector is the least trusted by almost 10 percentage points, still not having recovered from the financial crisis in the early 2000s.
As with any brand involved in an unsavory debacle, they must show, not just tell, why they deserve their rank and prestige.
Increased transparency is the only way to regain trust lost. Universities will not only have to be more ethical in their business dealings, but will have to show proof. “Show your work” as your math professor would say. Luckily, there are available strategies for this. Worth MacMurray highlighted on The FCPA Blog that ISO 37001 certification could be a solution. Here, colleges would voluntarily participate in extensive ABC audits proving their business hygiene or showcasing the steps taken to improve it. In either case, the onus is now on these institutions.
As with any brand involved in an unsavory debacle, they must show, not just tell, why they deserve their rank and prestige. And as business executives, there is an onus on us to learn from this scandal. We should look for ways to apply lessons learned to help advance our organization's culture, reputation and success.