Some students at the Harvard Business School have asked themselves whether business executives should sign a pledge that has the same force as the Hippocratic Oath to which doctors subscribe. In the ancient Greek version, a practitioner vowed that he would "prescribe regimens for the good of my patients according to my ability and my judgment and never do harm to anyone... I will not give a lethal drug to anyone if I am asked, nor will I advise such a plan... I will preserve the purity of my life and my arts... In every house where I come I will enter only for the good of my patients, keeping myself far from all intentional ill-doing... All that may come to my knowledge in the exercise of my profession or in daily commerce with men, which ought not to be spread abroad, I will keep secret and will never reveal."

A glance at this wording suggests that rewriting the 2,500-year-old text in the light of the banking crisis is not quite such an immensely difficult task as might have been imagined. The Harvard students doing masters degrees in Business Administration (MBA) have produced a version that they call the "MBA Oath". I will describe it later. They have done this because they want their degrees to "mean something more" than they currently do. The oath is their way of laying out the principles "of what we think an MBA ought to stand for". It has now attracted support from more than 250 business schools around the world. The Harvard students also want to stimulate a public conversation in the press about professionalising and improving management.

Their initiative responds to the most difficult aspect of the banking crisis, though it would apply to any industry. Why did bankers act in ways that, had one known them personally, would have seemed out of character? It is not sufficient just to reply with the one word explanation: greed. Blindness might be a better description. Obsession comes into it, too.

In the play Enron, a recent smash hit in London, the chief executive, Jeffrey Skilling, asks a colleague: "Seen the stock price today?" Answer: "I see it every day. I see it in the elevator. I see it on the walls. I see it on my desk." In the same play by Lucy Prebble, an investment analyst tells the audience: "There's a strange thing goes on inside a bubble. It's hard to describe. People who are in it can't see outside of it, don't believe there is an outside." In fact Enron was a fraudulently run energy company based in Houston, Texas. But it might as well have been a bank. As Skilling is made to say: "We're just dealing in numbers".

There was also operating the sort of moral blindness you find in closed societies. A recent example was the matter of MPs' expenses. MPs found it hard to understand why voters should find repugnant their exploitation of an expenses system that they had designed for themselves. This was because in a closed society such as the House of Commons, custom and practice becomes confused with what is right. Bankers also construct closed societies for themselves. Even the design of their offices – huge dealing rooms filled with rows of desks and computer screens – seems to emphasize this feature. When the bankers arrive there in the morning and walk to their "work stations", they have entered another country with its own peculiar rites, rules and rituals.

Conventional regulation cannot easily address these issues. It cannot forbid obsessive behaviour, it cannot cure moral blindness, it cannot rule out greed. In a closed society it cannot secure the opening of windows to let in fresh air. Faced with these difficulties I'd been hoping that some way would be found to make bankers consider what social purpose their activities serve. I should say straight away that almost everything they do does serve the public interest. Supplying capital, creating markets, devising collective savings schemes, facilitating payments, providing insurance, all these activities are perfectly proper. What falls on the other side of this line is the avoidance of public duty by such manoeuvres as exploiting loopholes in tax regulations, or by dodging regulation by one ruse or another, or by devising executive remuneration schemes that promote greed.

The MBA Oath is a better approach and it could do the job. It will be carried into business enterprises by the brightest and best of new graduates. It comprises seven promises. They are designed for all industries, not just banking.

The first deals with the right ordering of priorities. "I will manage my enterprise with loyalty and care, and will not advance my personal interests at the expense of my enterprise or society." The second emphasises the spirit as well as the letter of laws and contracts "governing my conduct and that of my enterprise". The third renounces "corruption, unfair competition, or business practices harmful to society".

The fourth deals with a matter that regulation could never reach – how you treat people. "I will protect the human rights and dignity of all people affected by my enterprise, and I will oppose discrimination and exploitation." Number five covers the environmental responsibilities of business: "I will protect the right of future generations to advance their standard of living and enjoy a healthy planet." The sixth principle is about truthfulness – to regulators, tax authorities, shareholders, lenders and the wider community. "I will report the performance and risks of my enterprise accurately and honestly." Finally the seventh principle deals with management itself: "I will invest in developing myself and others, helping the management profession continue to advance and create sustainable and inclusive prosperity."

I don't imagine that even the authors of this manifesto believe that it is going to immediately improve business practice. Probably many of the bankers whose nefarious practices have recently been exposed to public scrutiny would have solemnly recited the pledges when they were fresh out of business school. After all, banking firms such as Northern Rock and Bradford & Bingley ticked all the boxes for good corporate governance before they went bust. Nonetheless there remains the example of the Hippocratic Oath that has left such a mighty imprint on the practice of medicine. Why shouldn't the "Harvard" Oath, as I prefer to call it, do the same for business?

a.whittamsmith@independent.co.uk

For further reading

Text of the Hippocratic Oath at tinyurl.com/3742ap9