Beware Dangers to Gen Z of Prediction Markets Betting
Who Wins; Who Loses?
I have previously blogged about the expansion of prediction markets and its effects on the population. Bettors can bet on virtually anything. For example, Will the U.S. invade Iran before 2027? The Iran war is a popular source of betting. Prediction market traders on Polymarket and Kalshi have placed hundreds of millions of dollars in bets on the outcome of the 2026 Iran War, In April 2026, the U.S. entry into Iran carried 90% odds and over $115 million in trading volume.
How the Markets Work
Prediction markets are open exchanges online where people wager on future events, from election dates to economic outcomes. Participants can bet on anything from the price of an asset to how many times a public figure will tweet in a day, to the start or end of a war. Each bet shifts the market odds, which in turn reflect what participants collectively believe is most likely to happen. Prediction markets can be used for forecasting everything from election results to sports events.
Prediction markets are booming in popularity and facing scrutiny amid reports of market manipulation and insider trading. In the U.S., most betting, be it on prediction markets or on sports apps, is on the outcomes of sporting events. Indeed, betting on sports accounts for between 85% and 90% of the total betting volume on U.S. prediction markets.
Prediction markets have expanded significantly in the U.S., including through exchanges regulated by the Commodity Futures Trading Commission (CFTC). However, the regulatory treatment of some contracts—particularly those tied to sports—remains contested.
How the Markets Work
According to AI, prediction markets create the mechanism for executing contracts.
- Binary shares: Every market uses simple Yes/No contracts.
- Price as probability: Share prices range from $0.01 to $1.00; a price of 35 cents implies a 35% chance.
- Peer-to-peer trading: You trade against other users, not a house or bookmaker.
- Settlement payout: Winning shares settle at $1.00; losing shares settle at $0.00.
- Early trading: You can buy or sell your positions at any time before the event resolves.
- Buying Shares: You look at the weather forecast, disagree with the crowd, and buy 100 YES shares at $0.40 each. Your total cost is $40.00.
- Trading Before Resolution: Breaking news comes out showing a major storm is arriving. The price of YES shares jumps to $0.75. You can sell your shares early to lock in a profit ($75 – $40 = $35 profit) without waiting for Tuesday.
- Settlement at Resolution: If you hold until Tuesday and it rains, every winning YES share redeems for exactly $1.00. Your 100 shares pay out $100.00, giving you a $60.00 profit. If it does not rain, the shares expire at $0.00, and you lose your initial $40.00.
- 80% feel financially behind and seek aggressive returns.
- 52% redirect traditional investment funds into speculative platforms.
- 26% view sports betting or event contracts as long-term strategies.
- Gen Z accounts for nearly 64% of prediction debit transactions.
- Most retail traders lose money on speculative event contracts.
- The legal entry age of 18 encourages early speculative habits.
- Credit card delinquencies are rising among young risk-takers.
- Speculation frequently replaces standard retirement and savings contributions.
- Investment Confusion: 40% of Gen Z view betting as an investment, double the rate of the general U.S. adult population.
- Redirected Capital: 52% of Gen Z investors have shifted funds meant for traditional brokerages or retirement accounts into sports and event wagers.
- Long-Term Reliance: 26% of Gen Z retail investors explicitly treat sports betting as part of their long-term financial plan.
- Dominant Market Share: Gen Z accounts for nearly 64% of all prediction market debit transactions, heavily favoring platforms like Kalshi.
- Require prediction markets to monitor on-platform activity and the resolution sources their contracts depend on.
- Federal authorities should develop investigative protocols for manipulation campaigns linked to market positions.
- Congress should clarify how existing fraud and market-manipulation statutes apply to conduct designed to move prediction-market prices.
Why Students Are Not Excited About the AI-Driven Workplace
Surveys Raise Questions About Students’ Critical Thinking Skills
It is no secret that college students are concerned about the impact of AI on future employment opportunities and the skills needed to be successful in using AI. There is some trepidation on the part of students who fear that AI-generated information will lead to a reduction in available jobs as machines do the work of student/workers. Among all student disciplines, accounting students show the highest levels of skepticism toward AI-generated outputs.
You may recall that Eric Schmidt, the former CEO of Google, faced significant backlash during his commencement speech at the University of Arizona. During the ceremony held on May 15, 2026, he was met with boos and jeers from students when he discussed AI and its ever-expanding role of the technology in society.
I fear that students have not learned how to take advantage of the benefits of using AI and how to deal with possible negative consequences of its application in the workplace.
Student Concerns
Data from Inside Higher Ed’s ongoing Student Voice reports students’ complex feelings about AI and how their colleges are responding to its rise. “The flash survey of 1,038 two- and four-year students indicate that most students are neither AI evangelists nor outright opponents, and they’re actively using AI for coursework. At the same time, they wrestle with concerns about agency, a changing career landscape and more. Some four in 10 are explicitly concerned about dependence on AI tools, even as six in 10 see AI’s primary value to them in college as learning support.”
According to the June 11, 2026 report, “Why Students Aren’t All In on AI—and What They Want From Colleges,” as discussed by Colleen Flaherty, some 55 percent of students also expect AI to negatively impact their career prospects. They believe that colleges have not been successful in helping students navigate AI and what it means for their futures. The plurality of respondents, 34 percent, are neutral on their institution’s efforts, describing them as inconsistent, while an additional 21 percent describe them as at least somewhat poor.
The six takeaways from the report regarding AI are:
Takeaway 1: More students are using AI than ever for coursework, while a significant share—20 percent—remain resisters.
Takeaway 2: “Worried about dependence” is the most common student stance on AI.
Takeaway 3: A majority of all students expect AI to somewhat (39 percent) or very (16 percent) negatively impact their career prospects.
Takeaway 4: Just one in 10 students says that their institution is handling AI’s rise very well, in a thoughtful and proactive way.
Takeaway 5: Asked how AI can be most useful in their college experience, students are most enthusiastic about AI as learning support.
Takeaway 6: Students are somewhat split on their priorities for AI leadership at their institution.
2026 GMAC Prospective Students Survey
The 2026 GMAC Prospective Students Survey of 4,253 graduate management candidates across 145 countries provides useful information and guidance in making AI more palatable for college students. Students are not asking to be trained as AI users. They are asking to be developed as thinkers who happen to have new instruments available. These are two fundamentally different educational projects, and most institutions have defaulted to the first because it is easier to operationalize.
The GMAC survey tracks a specific shift that has been happening quickly. In 2022, the year ChatGPT launched, just 17% of graduate management candidates included AI tools in their ideal curriculum. By 2023 that figure had reached 40%, by 2024 it was 46%, and by 2025 it had reached 50%. The trajectory is clear, and the trend line continues to move in one direction.
But the more interesting data is in how candidates want to engage with AI. GMAC asked respondents to identify which forms of AI integration belonged in their ideal program. The top three responses share a common thread. Hands-on AI experience through business simulations and practical applications ranked first at 66%. Courses exploring how AI contributes to business strategy ranked second at 62%. Courses on AI in business decision-making processes ranked third at 58%. Training in prompt-writing and using AI for day-to-day tasks tied for last at 46% with personalized learning paths.
Views of Gen Z
The most striking finding from the survey is that 8 in 10 in Gen Zer’s say it is “very” or “somewhat” likely that using AI tools will make it more difficult for them to learn in the future. Concerns among Gen Z are that AI may undermine skill development and are outweighing its perceived efficiency gains. Even daily AI users — the population that holds the most favorable views overall — have become significantly less enthusiastic over the past year. Excitement among daily users dropped 18 points. Hopefulness dropped 11 points. The students using AI most frequently are not the most enthusiastic. They are often the most concerned about what it is doing to their thinking.
The survey’s implications section names what would actually move the needle: fostering trust in AI among Gen Z will depend on demonstrating how AI can enhance rather than replace human talents. This requires the kind of teaching relationship in which a trusted educator helps students work through, in the context of substantive intellectual work, what AI can and cannot do for their thinking. That is precisely the thing the dominant institutional response to AI has not been designed to deliver.
Views of Employers
GMAC’s parallel Corporate Recruiters Survey asked employers which skills they prioritize when hiring graduate management students, using the same skill list given to candidates. The comparison is instructive.
Strategic thinking is the top-ranked skill for candidates at 75% and remains among employers’ top priorities at 51%. Employers, however, rank problem-solving first at 54%, while candidates rank it second at 69%. Communication is also a shared priority, especially for employers, where it ties strategic thinking at 51%; among candidates, it remains high at 57%. The more revealing divergence appears in human capabilities that employers value more than candidates do. Coachability shows the largest employer-over-candidate gap among these skills, at 38% of employers compared with 23% of candidates. Initiative follows at 44% of employers versus 31% of candidates, and emotional intelligence at 40% versus 33%. The pattern suggests that candidates may be underestimating how much employers’ value receptiveness to feedback, proactive ownership, and interpersonal judgment.
Employers are not asking for graduates who can use AI efficiently. They are asking for graduates who can think, adapt, and work with other humans effectively, with AI as one of several tools available to them. The GMAC report notes that employers expect AI-tool skills to rise sharply in relative importance over the next five years, but their current orientation is clear: they value AI as a vehicle for the development of core capabilities, not as a capability in itself.
Blog posted by Steven Mintz, PhD, professor emeritus from Cal Poly San Luis Obispo, on September 29, 2026. You can communicate with Steve at: smintz@calpoly.edu. Visit Steve’s website to learn more about his activities.
Preparing Students for a Career in Accounting in an AI Environment
The Key is Cultivating Professional Skepticism
I have previously blogged about Guidelines for Ethical AI in Higher Education. In this blog I focus attention on the teaching of AI in the classroom. Educators should start with a review of the normative principles an AI system should respect, such as autonomy, beneficence, non-maleficence, justice and explicability.
AI ethics should be guided by three underlying principles that create the foundation of AI systems and its operation.
Responsible AI defines the operating model. It translates those principles into practices such as impact assessments, bias audits, red-teaming, documentation and human review.
AI governance defines the structure. It assigns ownership, policies, controls, approvals and monitoring processes so responsible AI practices are applied consistently.
AI compliance defines the obligation set. It maps AI systems, data uses and operational processes to applicable laws, regulations, standards and internal policies, then produces the evidence needed to show those requirements are being met.
AI ethics gives organizations a principled basis for deciding what “good” means in a specific AI context, then governance and compliance operating practices determine how decisions are enforced. Students should understand the inner workings of AI systems in order to determine how best to interact with AI systems in the decision-making process. AI systems are tools that are reliant on the guidance provided by those who map the systems and use it as the foundation for critical thinking and, ultimately, decision making.
Modern AI-specific Ethical Principles
AI systems draw from the foundational principles above, but they translate them into controls that technical, legal, risk and business teams can apply. The following are principles widely cited in recent writings on AI ethics.
Fairness
Fairness means AI outcomes should not discriminate against people. Teams often evaluate fairness with measures such as demographic parity, equal opportunity, equalized odds and calibration, then decide which metric fits the system’s purpose and risk profile.
Transparency
Transparency means people know when AI is involved, what the system is intended to do, what data or signals it uses and where its limitations are. For generative AI systems, transparency may include disclosure that content is AI-generated, documentation of retrieval sources, model cards, evaluation results and limitations around accuracy or completeness.
Accountability
Accountability means a human or organization is answerable for the system’s behavior. A model can generate an output, but it cannot approve its own deployment, accept regulatory risk, explain an incident to a customer or decide whether a harmful pattern should be remediated. Accountability requires named owners, escalation paths and authority to pause or change the system.
Privacy
Privacy means minimizing personal data use, protecting sensitive attributes, respecting consent and limiting secondary use. In AI systems, privacy may involve data minimization, access controls, retention limits, anonymization, synthetic data or differential privacy techniques that reduce the risk of exposing information about specific people.
Safety and robustness
AI safety and robustness mean systems perform reliably under expected and unexpected conditions. A model should be tested for failure modes, adversarial inputs, drift, unsafe outputs and behavior outside its intended use.
Contestability
Contestability means people affected by AI systems can challenge decisions and seek remedy. This principle matters most when AI influences access to employment, credit, housing, healthcare, education, public benefits or other consequential outcomes. A contestable system gives people a path to correct data, request human review and understand what evidence shaped the outcome.
The National Institute of Standards and Technology (NIST) describes trustworthy AI characteristics that include validity and reliability; safety, security and resilience; accountability and transparency; explainability and interpretability; privacy enhancement; and fairness with harmful bias managed.
Implementing AI in Higher Education
As previously mentioned in my blog, implementing AI in higher education engages various stakeholders, each with unique perspectives and priorities. For instance, students might focus primarily on how AI influences their learning experiences, privacy, and potential employment opportunities. Faculty researchers are likely to focus on how AI can revolutionize their research methods and enhance their findings while also considering the ethical implications of incorporating AI into their work. And a chief academic officer may view AI through the lens of institutional strategy, resource allocation, and the impact on overall educational outcomes.
MacPherson and Gaule, elaborate that “given these diverse perspectives, establishing a shared ethical framework using these guidelines is crucial. This will facilitate a common understanding of AI’s role and promote effective collaboration across the institution. By adopting these principles—either entirely or partially—or by adapting them to their individual contexts, institutional leaders affirm their dedication to the responsible and ethical use of AI for the benefit of all stakeholders. This commitment may manifest in various forms across different institutions, reflecting their distinct missions, values, and community needs. Some may integrate these principles thoroughly into their policies and practices, whereas others may use them as foundational elements for developing customized frameworks. Regardless of the method employed, this commitment is essential for maintaining trust and integrity and for ensuring the well-being and success of students, faculty, staff, and community partners amid rapid technological shifts.”
Professional Skepticism in Accounting
AI poses a significant risk to accounting by eroding professional skepticism, not merely through automation. While firms invest billions in AI for efficiency, the technology automates routine tasks crucial for junior accountants to learn how to identify errors. This could lead to a generation trusting AI output without critical judgment. Professional skepticism, defined as a questioning mind and critical assessment, is traditionally developed through hands-on experience, which AI is now replacing. Studies show less experienced accountants exhibit automation bias, accepting AI’s uncertain or inaccurate outputs. Educators are now implementing AI-powered simulations where the AI can be wrong, forcing students to verify and question. The profession has a narrow window to deliberately teach skepticism before AI-native graduates fill supervisory roles, preventing a critical gap in judgment essential for financial reporting integrity.
The biggest risk AI poses to accounting is not automation. It’s eroding the skill that keeps the system honest. As firms deploy AI to handle reconciliations, classifications and routine testing, they automate the work that once taught junior accountants how to recognize when something is wrong. Without deliberate training, the next generation may trust the machine more than their own judgment.
I asked AI about the risks posed to professional skepticism of using AI systems for decision making. Here is its response: “AI significantly threatens the accounting profession by eroding professional skepticism. As artificial intelligence increasingly automates routine accounting tasks, the essential skill of professional skepticism—critical for ensuring audit reliability—faces decline. This erosion can lead to over-reliance on AI outputs, potentially compromising the quality of audits and financial reporting.” It went on…
Impact on Auditing
- AI enhances efficiency and risk detection but raises concerns about trust and accountability.
- The reliance on AI tools may diminish the human judgment necessary for thorough audits.
- Educators and firms must actively train professionals to maintain skepticism in the face of AI advancements.
- Developing a balanced approach to integrating AI while preserving critical thinking skills is essential.
Guidelines for Ethical AI in Higher Education
AI Ethics: The Principles Shaping Responsible AI Development
I have previously blogged about ethical issues surrounding AI. This discussion includes the difference between responsible and ethical AI, and frameworks used to incorporate AI into decision making. These ethical issues form the foundation of ethical frameworks that can produce trustworthy systems.
Writing for the online publication, Snowflake, Laurie MacPherson ad David Gaule, cite the following principles of AI ethics that characterize best practices.
AI ethics establishes the normative principles a system should respect, such as autonomy, beneficence, non-maleficence, justice and explicability.
Responsible AI defines the operating model. It translates those principles into practices such as impact assessments, bias audits, red-teaming, documentation and human review.
AI governance defines the structure. It assigns ownership, policies, controls, approvals and monitoring processes so responsible AI practices are applied consistently.
AI compliance defines the obligation set. It maps AI systems, data uses and operational processes to applicable laws, regulations, standards and internal policies, then produces the evidence needed to show those requirements are being met.
AI ethics gives organizations a principled basis for deciding what “good” means in a specific AI context, then governance and compliance operating practices determine how decisions are enforced.
The Foundational Principles of AI Ethics
Luciano Floridi and Josh Cowls’ widely cited framework identifies five core principles for AI in society: beneficence, non-maleficence, autonomy, justice and explicability. These are discussed below.
Autonomy
Autonomy means respecting human agency. In AI systems, this can mean giving people meaningful notice, preserving an opt-out path, requiring human-in-the-loop review for consequential choices or preventing automation from narrowing a person’s available options without explanation.
Beneficence
Beneficence means AI systems should create benefit. That benefit may take the form of better access, faster service, higher productivity, improved detection or more consistent decisions.
In practice, beneficence must consider unintended consequences: Teams may evaluate whether the system improves outcomes compared with the process it replaces or augments. But a system can improve efficiency overall while concentrating risk on a smaller group of people, which is why beneficence has to be balanced against the other principles.
Non-maleficence
Non-maleficence requires teams to identify foreseeable harms before deployment and monitor for harms that emerge in production. That includes model failures, misuse, overreliance, security abuse and downstream effects that may not appear in a test data set.
Justice
Justice concerns the fair distribution of benefits and harms. An AI system should not systematically disadvantage a group because of protected attributes, proxy variables, uneven data quality or historical patterns embedded in training data.
This principle connects directly to algorithmic bias, as discussed in my previous blog.
Explicability
Explicability means AI systems should be understandable enough for people to evaluate, contest and govern them. It includes explainability, meaning how the system reached an output, and accountability, meaning who is responsible for the way the system works.
Modern AI-specific Ethical Principles
AI systems draw from the foundational principles above, but they translate them into controls that technical, legal, risk and business teams can apply. The following are principles widely cited in recent writings on AI ethics.
Fairness
Fairness means AI outcomes should not discriminate against people. Teams often evaluate fairness with measures such as demographic parity, equal opportunity, equalized odds and calibration, then decide which metric fits the system’s purpose and risk profile.
Transparency
Transparency means people know when AI is involved, what the system is intended to do, what data or signals it uses and where its limitations are. For generative AI systems, transparency may include disclosure that content is AI-generated, documentation of retrieval sources, model cards, evaluation results and limitations around accuracy or completeness.
Accountability
Accountability means a human or organization is answerable for the system’s behavior. A model can generate an output, but it cannot approve its own deployment, accept regulatory risk, explain an incident to a customer or decide whether a harmful pattern should be remediated. Accountability requires named owners, escalation paths and authority to pause or change the system.
Privacy
Privacy means minimizing personal data use, protecting sensitive attributes, respecting consent and limiting secondary use. In AI systems, privacy may involve data minimization, access controls, retention limits, anonymization, synthetic data or differential privacy techniques that reduce the risk of exposing information about specific people.
Safety and robustness
AI safety and robustness mean systems perform reliably under expected and unexpected conditions. A model should be tested for failure modes, adversarial inputs, drift, unsafe outputs and behavior outside its intended use.
The National Institute of Standards and Technology (NIST) describes trustworthy AI characteristics that include validity and reliability; safety, security and resilience; accountability and transparency; explainability and interpretability; privacy enhancement; and fairness with harmful bias managed.
Contestability
Contestability means people affected by AI systems can challenge decisions and seek remedy. This principle matters most when AI influences access to employment, credit, housing, healthcare, education, public benefits or other consequential outcomes. A contestable system gives people a path to correct data, request human review and understand what evidence shaped the outcome.
Implementing AI in Higher Education
AI Ethical Guidelines specific to higher education are discussed in the online publication, Educause. The ethical principles outlined in these guidelines address the multifaceted considerations that higher education institutions must navigate when implementing AI technologies. These principles include the following:
- Beneficence: Ensuring that AI is used for the good of all students and faculty.
- Justice: Promoting fairness in AI applications across all user groups.
- Respect for Autonomy: Upholding the rights of individuals to make informed decisions regarding AI interactions.
- Transparency and Explainability: Providing clear, understandable information about how AI systems operate.
- Accountability and Responsibility: Holding institutions and developers accountable for the AI systems they deploy.
- Privacy and Data Protection: Safeguarding personal information against unauthorized access and breaches.
- Nondiscrimination and Fairness: Preventing biases in AI algorithms that could lead to discriminatory outcomes.
- Assessment of Risks and Benefits: Weighing the potential impacts of AI technologies to balance benefits against risks.
Betting on Predictions Markets: A Brief Ethical Analysis
How Predictions Markets Work
I have previously blogged about how predictions markets work and some of the ethical issues that should be addressed. In this blog, I examine the benefits and harms of betting on predictions markets and regulatory concerns. I also look at the ethical issues using a Virtue Ethics perspective.
Prediction markets offer a way to leverage collective guesses about the likelihood of real-world events. The companies operating these platforms claim that prediction markets are forms of iinvestment and offer financial hedging. Opponents and critics—including state gambling regulators and attorneys general—argue that prediction markets offer a product that is fundamentally indistinguishable from gambling and should be regulated accordingly.
Prediction markets are booming in popularity and facing scrutiny amid reports of market manipulation and insider trading. In the U.S., most betting, be it on prediction markets or on sports apps, is on the outcomes of sporting events. Indeed, betting on sports accounts for between 85% and 90% of the total betting volume on U.S. prediction markets. The total trading volume on Kalshi, one of the major prediction market platforms, for the first eight months of 2026 was $180 billion compared to $28 billion for all of 2025.
Prediction markets are open exchanges online where people wager on future events, from election dates to economic outcomes, to world events, to minor occurrences. Participants can bet on anything from the price of an asset to how many times a public figure will tweet in a day, to the start or end of a war. Each bet shifts the market odds, which in turn reflect what participants collectively believe is most likely to happen.
Each Polymarket is a yes/no question, like “Will Putin meet with Zelenskyy by September 30, 2026?”. You buy shares in “yes” or “no” outcomes. Prices reflect crowd-sourced odds and probabilities. For example, if yes is at 30 cents, that’s a 30% chance. Markets resolve based on official results. For multi-outcome events, like “Nobel Peace Prize Winner 2026,” you simply trade on the specific outcome you think will win.
Virtue Ethics
Recently, there have been any number of stories about prediction markets that address the ease of using it, dangers of using it, and whether markets themselves are ethical. One way to make that determination is by applying virtues to the behavior.
Virtue Ethics refers to a trait of moral excellence or goodness. It encompasses behaviors and attitudes that reflect high moral standards, such as honesty, integrity, and kindness. Virtues are often seen as essential qualities that contribute to an individual’s character and are valued in various ethical frameworks as foundational principles of a good life. The problem with betting on prediction markets is it challenges virtuous behavior. It compromises the end goal of virtue, which is human flourishing or happiness.
How is all of this affecting young people, especially young men, who are the most impacted by the surge in sports betting? Some have become addicted to the activity and are being harmed by turning away from their studies, losing social connectedness, and losing money, in some cases a lot of money. Others participate occasionally, as entertainment or out of a need to feel part of social group.
It’s important that we do not dismiss the human element when analyzing whether betting on prediction markets is ethical. An Aristotelian virtue that is relevant here is self-control. Self-control is a fundamental virtue that involves mastering one’s desires and impulses. It is often associated with temperance and is considered essential for personal discipline and moral integrity.
An example of losing control is John Pederson, who could not work because of a car crash. He was in need of money so he took out a variable-interest loan and started betting. At first, it worked. Pedersen turned about $2,000 into $8,000 by betting on daily snowfall totals in Detroit, where he lives. He turned that into $41,000 by trading on sports, using a strategy he developed with the help of AI, according to a Wall Street Journal review of his account records. Then he placed an audacious bet: All $41,000 that a celebrity would say a particular word on TV. He lost
Arguments for Allowing Predictions Markets (Benefits)
Utilitarianism is a method of ethical reasoning that evaluates the benefits and harms of an action and selecting the action that maximizes the et benefits to stakeholders. Supporters argue that prediction markets are not necessarily about gambling, but rather about information discovery. A variety of outcomes are discussed here.
Regulating the Markets
The key to controlling these markets is through regulation, but that has been slow in coming. The Commodity Futures Trading Commission (CFTC) should set guardrails to regulate bets on prediction markets.
- Prediction markets can aggregate information more efficiently than polls or experts. Prediction markets force participants to put money behind their convictions, which essentially rewards accuracy with financial incentives. Supporters argue this makes them more effective than polls or expert commentary at forecasting future events because markets continuously absorb new information and update probabilities in real time.
- Financial markets already operate as forms of event contracts. If you’ve ever invested in single stocks, you’ve essentially participated in prediction markets. The only difference is that, with stocks, investors are limited to predicting the outcome of a company instead of an event. Bonds and derivatives are also a type of prediction as well, as bonds essentially price default risk and derivatives price probabilities. This raises the question, why is betting on election outcomes different from betting on interest-rate moves.
- Prediction markets could improve forecasting. Because they are a useful tool for crowdsourcing information, prediction markets can be used by businesses or governments to improve decision-making. Users are more likely to make predictions on events about which they are knowledgeable, and this information could be helpful for forecasting recessions, fraud, supply chains, elections, and demand. Because they can source this information quickly, prediction markets can surface truths faster than committees or social media.
- They may incentivize harmful or unethical behavior. Oftentimes, event contracts offer events surrounding wars, assassinations, elections, and disasters. These are uncomfortable things to bet on, as it may feel as if users are rooting for these outcomes. Additionally, this raises ethics concerns over investors profiting from others’ tragedies.
- Markets can be manipulated. Even though prediction market outcomes may appear more organic than the performance of publicly traded companies, they are not immune to manipulation. Deep-pocketed participants willing to absorb larger losses may attempt to distort market odds, while coordinated misinformation campaigns and bot-driven activity can artificially influence sentiment and pricing. As event contracts become more popular, concerns are growing that the markets themselves could shape public perception rather than simply reflect it.
- They lack consumer protections and regulatory frameworks. Across the globe, prediction markets are relatively new and therefore lack regulation, as they don’t fit cleanly into existing categories. It is unclear if they are considered securities, gambling, or derivatives and therefore lack proper regulatory oversight and consumer protection standards.
| What the Bet Was | Why People Traded It | Key Insight & Outcome |
| Markets on the release date of Gemini 3 and specific, non-public Google search trends. | Suspected internal corporate knowledge was being traded by a high-accuracy account. | Outcome: A trader, later suspected to be a Google employee, profited over $1,000,000 in a single day. Lesson: Prediction markets can act as a real-time corporate intelligence leak, revealing internal sentiment or even non-public information before official announcements. This raises ethical and legal questions about profiting from insider trading. |
- Require prediction markets to monitor on-platform activity and the resolution sources their contracts depend on.
- Federal authorities should develop investigative protocols for manipulation campaigns linked to market positions.
- Congress should clarify how existing fraud and market-manipulation statutes apply to conduct designed to move prediction-market prices.
What is the Difference Between “What You Would Do?” and “What You Should Do?”
Psychological Considerations in Ethical Decision Making
In resolving ethical dilemmas, I often ask students simply “What Would You Do?” Typically, students will rely on philosophical reasoning to respond. Briefly, they might refer to Utilitarianism, which balances harms and benefits and chooses the best alternative that maximizes the net benefits to the stakeholders. One problem with this form of ethical reasoning is the harms and benefits are not always easy to identify and value. Also, regardless of the net benefits, evaluating the rights of the stakeholders might lead to a different conclusion.
Categorical Imperative
Deontology, or Kantian Rights Theory, evaluates the rights of stakeholders and duty of the decision maker to respect those rights in forming the best possible decision. One way to evaluate is by applying the “Categorical Imperative.” It holds that a person should “Act only according to that maxim by which you can at the same time will that it should become universal law.” The ‘maxim’ of our acts can be thought of as the intention behind our acts. The maxim answers the question: What am I doing and why? In other words, moral intention is a driver of ethical action.
The Categorical Imperative is a useful perspective. It answers the following: How would I want others to decide the issue in similar situations for similar reasons? If I can confidently answer that question, then my decision would meet the universality standard.
Another explanation of rights is that there is a difference between what we have a right to do and what the right thing to do is. A classic example is whether it is right to yell “fire” in a crowded theater.
Yelling “fire” in a crowded theater is generally not protected under free speech laws. While there is no blanket law making it illegal to yell “fire” in such a setting, doing so without cause can lead to legal consequences due to the potential for causing panic and harm. So, few would argue that yelling “fire” is wrong, unless a fire exists. The net harms of yelling “fire” when there is none far exceeds any benefits that might accrue to the person yelling the word out.
Should versus Would
The best-selling author and ethicist, Bruce Weinstein, discusses the difference between should and would in making ethical decisions. Weinstein’s perspective follows.
“What should you do?” is an ethical question. We can use ethical reasoning to help come to a decision. Weinstein explains that ethics help us to understand whether we have made the right decision. “What would you do?” is a psychological question. Psychology explains why we do what we do. In other words, even if we believe it’s right to behave a certain way, we may not do so because of pressures that exist to do otherwise.
Think about a student who knows a classmate has cheated on an exam. The right thing to do is inform the instructor. Why? Because such cheating negates the level playing field that should exist when evaluating student work. The cheater has an unfair advantage over those who completed the exam honestly. So, the answer to the question of what would you do recognizes that one’s mindset could get in the way of proper behavior. The student may be psychologically torn from acting on the right behavior to avoid getting a friend in trouble.
Cognitive Dissonance
The term “Cognitive Dissonance” supports the should versus would perspectives. Cognitive Dissonance is a term first coined by Leon Festinger in 1956. It means how we think we should behave is often different from how we decide to behave. The inconsistency between our thoughts, beliefs, or attitudes and our behavior creates the need to resolve contradictory or conflicting beliefs, values, and perceptions. Festinger posits that dissonance can be reduced in one of three ways: (1) change one or more of the attitudes, behavior, or beliefs so as to make the relationship between the two elements a consonant one; (2) acquire new information that outweighs the dissonant beliefs; or (3) reduce the importance of the cognitions (beliefs, attitudes).
One way to enhance a student’s decision about what they would do is to ask: What must you do? This makes it more likely that the answer is genuine and not driven by the student’s desire to tell you what you want to hear. The ‘must’ forces students to consider whether there are any policies (i.e., whistleblowing) that must be complied with including conforming to a code of ethics. It also makes students think about whether any laws or regulations exist that affect decision making.
Conclusions
Differentiating between how we “ought” to behave and how we “actually” behave is no small feat. In addition to the pressures that exist, the culture of an organization could sway decision making in one direction or another. The key to doing the right thing is to have the courage of your convictions. We must stand up and be counted when resolving unethical issues that compromise the values underlying ethical behavior in life and in the workplace.
Blog posted by Steven Mintz, PhD, professor emeritus from Cal Poly San Luis Obispo on September 1, 2026. You can contact Steve at: smintz@calpoly.edu. Visit his website to learn more about his activities.
Why Do Ethical Failures Occur?
Creating a Culture Where Moral Values Lead the Way
Have you ever thought about the reasons why ethical failures keep happening? It’s not just business failures, which I blog about in my workplaceethicsadvice.com blog. Ethical failures often are caused by the pursuit of profits above all else. It happens all too frequently in government. Time after time we see government/political persons making decisions that are self-serving rather than acting in the public interest. Ethical failures occur all the time in health care. Just think about Medicare fraud we constantly hear about. I could go on but you get the point.
To say that ethical failures occur because of bad decisions is an understatement. There’s much more to it, and that is the purpose for this blog. The key ethical value to avoid ethical failures is integrity. As the ancient Greeks knew, it provides the practical wisdom needed to make decisions that are right, not wrong, and the courage to follow through with ethical action.
I recently read a piece on Big 4 News, an Australian digital website, that claims ethical failures are preventable. The key is how to manage the underlying causes, including: pressure + incentives + ethical fading+ weak challenge +inadequate accountability combine.
Why Ethical Failures Are Preventable
Writing for Big 4 News, Dr. Peter Collins identifies Twelve Practices for Preventing Ethical Failure. Collins believes ethical failure is predictable and leaders need a practical discipline for prevention. On a macro-level, he uses a leadership framework drawn from investigations, inquiries, behavioral ethics, governance failures and the experience of working with leaders who genuinely want to do the right thing.
According to Collins, the case for prevention is not abstract. Ethical failure destroys trust, damages institutions, harms the vulnerable and consumes enormous public resources. The result is repeated ethical failures. “The insights that emerge from inquiries are usually preventive insights. They tell us what leaders could have seen, what boards could have asked, what regulators could have challenged, what whistleblowers could have been protected from, and what organizational practices could have been changed before harm occurred.”
The Key Takeaways are:
- Ethical failures are often predictable — and therefore preventable.
- Incentives and targets can unintentionally reward unethical behavior.
- Under pressure, ethical considerations can fade from decision-making.
- Strong governance requires real independence, accountability and challenge.
- Whistleblowers and independent investigations are critical early-warning mechanisms.
- Governance means to hold board members accountable and take responsibility for their actions.
- Boards cannot outsource culture and then be surprised when culture fails.
- Whistleblowing can be a sign that ordinary systems of oversight are being ignored.
- A culture is essential to treat whistleblowers with respect and protect them from retaliation.
- Leaders should set exemplary standards for everyone else and ask not: “Can I get away with this?” Instead, ask: “What standard am I setting for everyone else?”
- A culture of deference, convenience, fear or misplaced loyalty can create a culture where boards overlook past misconduct of a CEO, and when leaders tolerate conflicts of interest.
Learn How to Disagree Without Being Disagreeable
The Lost Art of Civility
Civility is the ability to talk respectfully with people who disagree with you. Civility in society is waning. In fact, one can make the argument that it no longer exists or, at least, incivility has affected many segments of society and increasingly, people act uncivilly towards others when involved in a discussion that turns into an argument and which can even lead to a violet reaction. A casual conversation might turn ugly and lead to fisticuffs—a physical fight or confrontation, typically involving punching or striking with the hands, and even knockout punches in street fights, where powerful strikes incapacitate an opponent, often rendering them unconscious.
Americans need to learn how to disagree with one another without being disagreeable. This entails not shouting one down when differences of opinion exist. We have, for some time now, seen this on college campuses. We could make the case that it is the result of passionate debating. We could say it’s part of creating a learning environment. However, it can be taken to harmful extremes.
I’ve seen this occur on colleges campuses. A case in point are instances where speakers are interrupted by loud protests or chants, preventing them from delivering their message. A notable example is the violent interruption of Charles Murray’s speech at Middlebury College on March 2, 2017, where protesters clashed with attendees. During his lecture, hundreds of students protested, chanting and disrupting the event, which escalated into a confrontation that resulted in injuries to a faculty member.
Since 2017, the rhetoric has been ratcheted up several notches. We see it every day encounters, political discussions turned contentious, workplace incivility, fights on school campuses, and even violence between passengers on an airplane.
Importance of Civility
I have blogged before about the lost art of civility. It is essential that we regain civility in society if we are to overcome the political divisions that underly much of incivility in America today.
According to Alison M. Cheperdak, the founder of Elevate Etiquette, civility is important because:
- Social Glue: Civility acts as a form of social glue, connecting individuals and fostering a sense of belonging.
- Constructive Engagement: Engaging in civil discourse can lead to uncomfortable but necessary conversations, promoting understanding and cooperation.
- Conflict Prevention: Civil behavior can prevent conflicts from escalating into toxic dysfunction, maintaining a healthier community.
- social media (29%),
- media (24%),
- and public officials (19%).
- Three-quarters (73%) of Americans believe that we “tolerate outrageous and uncivilized behavior by elected officials” more today than in the past.
- Yet more than eight out of 10 Americans (83%) expect government leaders to find common ground across political lines. These expectations are not just generalized but extend to their own elected officials.
- 72% of Americans are interested in being a part of the solution to restore civility and find common ground, and wish their elected officials will be too.
- Active Listening: Show genuine interest in the other person’s perspective.
- Stay Focused on Ideas: Critique the idea, not the individual.
- Use “I” Statements: Express personal feelings or thoughts to avoid sounding accusatory.
- Seek Common Ground: Identify shared values or goals to foster a collaborative atmosphere.
Why Gen Z Students Fear the Use of AI
Trust in the Use of AI is the Key
A new study from UC Berkeley reports that using AI is a slippery slope for undergraduates. The more they use it, the more likely they are to cheat with it. But AI proficiency also may be important for career development. Thee following information comes from a news release by UC Berkeley about the study. The study results are important to explore where students seem concerned about whether AI will take over their job responsibilities, limiting the number of job opportunities after graduation.
Igor Chirikov, a senior researcher at UC Berkeley’s Center for Studies in Higher Education, has published the largest study of generative AI use by undergraduates, in collaboration with researchers from the University of Technology Sydney and Cornell University. More than 95,000 students at 20 research-intensive public universities responded to questions about how they use AI, including whether they use it to cheat. The findings were published on May 21, 2026 in Science.
The study, conducted in the spring of 2024, used data collected by Berkeley’s Student Experience in the Research University (SERU) Consortium, a group of research universities that collaborate on surveying students to improve higher education. The results indicate that “about two-thirds of respondents said they used GenAI, and almost 40% used it monthly or even more frequently. What’s more, at least 9% of students who used AI reported using it to cheat. That number varied significantly by academic discipline, with more non-STEM students cheating with AI than STEM students. But the researchers caution that banning GenAI won’t stop cheating and may even harm students when they look for work in industries that expect AI proficiency. Chirikov and his coauthors recommend that academic programs find new ways of measuring students’ knowledge and abilities that can’t be faked with AI”
Cheating By Students
According to the study, it’s not always clear to students what is cheating versus what is an acceptable use of generative AI, and that there can be a slippery slope to cheating — 26% of daily AI users said they used it to cheat, while only 7% of monthly users did. Chirikov stated in the interview that the authors don’t know whether frequency of AI use causes students to cheat more, or just students who are more likely to cheat in general tend to use those instruments more often. But the trend is worrisome in that you see this clear correlation where AI misuse increases as students use AI more frequently.
Chirikov was asked what he thinks motivated the students who knew they were cheating, or thought they were, and did it anyway? One possibility is that a lot of bright students are in this competitive environment where grades matter so much, and it’s important to have a perfect GPA to get an internship or get into graduate school. And because higher education is expensive for students and families, there is also pressure to finish as quickly as possible without falling behind.
Chirikov want on and explained that there are all these AI tools that make their use very easy. Instead of spending an all-nighter on an assignment, you can generate something in under 30 minutes and submit it. “I think those two forces create a perfect storm for AI-assisted cheating. And learning is a casualty of that perfect storm to some extent.”
The study suggests that different disciplines should develop different policies about AI use, and different ways of assessing students. Chirkov explained that when students don’t have equal access to AI tools, it may become a disadvantage for their careers. But students also need to be careful about relying too much on AI instead of developing their own skills, Chirikov warns.
One response that is gaining traction right now is to move all assessments into controlled environments. For example, proctored oral exams or hand-written in-class exams.
The problem is that those types of assessments only cover a narrow group of skills that can be tested in a time-controlled environment. Universities, and especially research universities, teach students a much broader set of skills. And some of those skills require prolonged engagement with material.
One of the issues that faculty are running into is that it’s not easy to detect GenAI. “Sometimes you think student work is by AI, but it may not be. And even if you detect AI use, you may spend a lot of time trying to prove that compared to plagiarism cases, where there’s evidence that is easier to collect.”
University Responses
AI detection software is evolving, so there are newer detectors that are able to find AI-generated text better, but it’s a cat-and-mouse game, because at the same time, there are AI humanizers, services that allow you to make your text or code look human-written. So, it will be a never-ending battle.
Chirikov believes that one solution is to ban AI throughout. “This is not a productive solution. Students will continue using AI. Some use it in their courses to learn better, to explain material and to ask questions that they would not be comfortable asking their faculty.”
He went on, “it’s challenging for universities to stay away from that wave of AI adoption, and they need to teach students to use AI. But what responsible AI use looks like is different in different fields — writing, coding, problem-solving, lab work and creative work all raise different questions. For that reason, a blanket ban probably wouldn’t work.”
A lot of employers are interested in graduates who have experience working with AI tools. Students from higher socioeconomic backgrounds may get an advantage that doesn’t translate into skills, but rather about the ability to pay for those tools. “That’s a very important component of this study. Using AI in your learning can do a trick on you, Chirkov stated. You may produce something polished for class, and may even get a good grade, but not develop the skill the assignment was meant to build.”
There are some experimental studies that show that people learn much worse with AI and don’t develop durable skills compared to learning without AI. A lot of students may just be very misinformed in terms of how good or bad they are in certain areas, and they may underinvest in some foundational skills.
The future of AI in the workplace is unknown. What’s important is to determine how AI is impacting students’ education. Chirikov provides sound advice when he says: “I encourage students to pause and ask themselves when using AI, “Could I explain this without the tool? Could I do a similar task on my own tomorrow? Did AI help me understand the material better, or did it mainly help me finish faster?” Those simple questions can help students track whether AI is supporting their learning or replacing it.
Gen Z Job Opportunities in the Era of AI
It seems clear that a lot of students in the graduating classes of 2026 didn’t want to hear about AI given that the job market for new grads was tough and many likely believe that AI is at least one factor. Still, it is a technology that affects workplace decision-making—and growing by leaps and bounds—and there’s nothing to do but learn to work with. Students need to learn how to embrace the benefits of using AI and deal with possible negative consequences of its application in the workplace.
Gen Z’s distaste for AI can be seen in new research from “GoTo”, which specializes in cloud-based business communication, IT management, and remote support software. Gen Z workers, more than other generations, largely feel that AI is making them dumber. Close to half (46 percent) of Gen Zeers felt this way, compared with 39 percent of workers overall. This seems unsupportable, and it’s worth mentioning that students still need critical thinking skills to apply AI when ethical dilemmas exist.
Ethics in the Workplace
Michael Impink, instructor of AI Ethics in Business at Harvard DCE’s Professional and Executive Development division, suggests that executives and business leaders can meet the challenges of ethics in the workplace. “For leaders, awareness is the number one step,” Impink says. “Once leaders know where ethical AI issues might exist, they can begin to generate solutions. AI is idiosyncratic to what you want it to do, so there’s no one-size-fits-all approach,” he adds. “Understanding the main ethical challenges AI presents — and creatively generating solutions — is mandatory for the leaders of tomorrow.”
A study by Genesys found that more than one-half of those surveyed say their companies do not currently have a written policy on the ethical use of AI, although 21 percent expressed a definite concern that their companies could use AI in an ethical manner. The survey included 1,103 employers and 4,207 employees regarding the current and future effects of AI on their workplaces. The 5,310 participants were drawn from six countries: the U.S., Germany, the U.K., Japan, Australia and New Zealand. Additional results include:
- 28 percent of employers are apprehensive that their companies could face future liability for an unforeseen use of AI.
- 23 percent say there is currently a written corporate policy on the ethical use of AI.
- 40 percent of employers without a written AI ethics policy believe their companies should have one.
- 54 percent of employees believe their companies should have one.
The Human Element of Betting on Prediction Markets
Insider Trading and the Public Interest
I have previously blogged about the expansion of prediction markets and its effects on the population. Bettors can bet on virtually anything. For example, Will the U.S. invade Iran before 2027? The Iran war is a popular source of betting. Prediction market traders on Polymarket and Kalshi have placed hundreds of millions of dollars in bets on the outcome of the 2026 Iran War, In April 2026, the U.S. entry into Iran carried 90% odds and over $115 million in trading volume.
How the Markets Work
Prediction markets are open exchanges online where people wager on future events, from election dates to economic outcomes. Participants can bet on anything from the price of an asset to how many times a public figure will tweet in a day, to the start or end of a war. Each bet shifts the market odds, which in turn reflect what participants collectively believe is most likely to happen.
Prediction markets are booming in popularity and facing scrutiny amid reports of market manipulation and insider trading. In the U.S., most betting, be it on prediction markets or on sports apps, is on the outcomes of sporting events. Indeed, betting on sports accounts for between 85% and 90% of the total betting volume on U.S. prediction markets.
Each Polymarket is a yes/no question, like “Will Putin meet with Zelenskyy by June 30, 2026?”. You buy shares in “yes” or “no” outcomes. Prices reflect crowd-sourced odds and probabilities. For example, if yes is at 30 cents, that’s a 30% chance. Markets resolve based on official results. For multi-outcome events, like “Nobel Peace Prize Winner 2026,” you simply trade on the specific outcome you think will win.
Prediction markets make it easy for people to bet on all kinds of events pertaining to finance, politics, pop culture, and sports. These markets are booming. The Wall Street Journal reported that the total trading volume on the two major prediction market platforms, Polymarket and Kalshi, has soared to $24.2 billion in April 2026, compared to $1.8 billion a year before.
How is all of this affecting young people, especially young men, who are the most impacted by the surge in sports betting? Some have become addicted to the activity and are being harmed by turning away from their studies, losing social connectedness, and losing money, in some cases a lot of money. Others participate occasionally, as entertainment or out of a need to feel part of social group. Still others do not know what to think but do have questions.
CFTC Enforcement Update
It has been reported that Insider Trading has drawn sharp criticism in traditional financial markets for giving those with privileged access to information an edge over everyday investors. Executives or employees often hold details unavailable to the public, allowing them to buy or sell stocks ahead of major announcements.
Senators John Curtis and Adam Schiff are concerned about the CFTC’s enforcement ability after a “troubling” report on Polymarket’s advertising.
A bipartisan pair of US senators has called on the Commodity Futures Trading Commission (CFTC) to investigate the prediction market platform Polymarket after it reportedly paid social media influencers to make videos of fake bets.
Republican Senator John Curtis and Democratic Senator Adam Schiff sent a letter to CFTC Chair Mike Selig, saying they were concerned Polymarket “used deceptive marketing tactics to promote gambling-style products to US audiences.”
“If accurate, these allegations are deeply troubling and demand immediate scrutiny from the CFTC,” they wrote.
The letter comes after The Wall Street Journal reported on June 20, 2026, that Polymarket paid influencers to film fake trades on websites resembling its platform and that many creators didn’t disclose that Polymarket paid them.
The Journal said it reviewed over 1,100 videos and found that 70% featured fake bets amounting to nearly $2 million.
New York Sues Kalshi
New York has sued prediction market platform Kalshi, alleging it operates an illegal, unlicensed gambling business by offering event contracts on sports, elections and other outcomes. The lawsuit seeks to stop Kalshi’s alleged illegal gambling operation in the state, require the company to forfeit illegal gains, pay restitution to users and pay civil penalties equal to three times those gains.
“No matter what they call themselves, prediction markets like Kalshi are gambling platforms, plain and simple,” Attorney General Letitia James said in a statement. “We are taking them to court to uphold our laws and protect New Yorkers.” The lawsuit comes after the New York State Gaming Commission issued Kalshi a cease-and-desist order in October 2025, prompting the company to sue the regulator in federal court. A judge denied Kalshi’s request for a preliminary injunction in July 2026, and an appeals court later rejected its bid to block enforcement while the appeal proceeds.
In response to the report, a Polymarket spokesperson told Cointelegraph that it was “conducting a comprehensive audit of active promotional content to ensure it complies with our standards, as well as applicable regulatory and legal disclosure requirements.” The letter also came ahead of reports in the Journal and CNBC that the CFTC was investigating Polymarket.
The Weirdest Bets on Prediction Markets
A story in the Wall Street Journal by Alex Goldenberg describes what could be the most egregious example of betting on prediction markets. In May 2026, federal prosecutors in New York indicted Master Sgt. Gannon Ken Van Dyke, a special forces soldier at Fort Bragg, N.C., for using his role in the planning of the January, 2026 raid that captured then Venezuelan President, Nicolás Maduro, to win about $410,000 on Polymarket. The Justice Department called it the first criminal case in the U.S. arising from prediction-market wagers. Van Dyke used information about the strike to bet on the event. This misuse of nonpublic information is an example of insider trading.
To show you how crazy these bets can get, last month a Polymarket trader walked away with $21,398 on a $119 bet that the temperature in Paris would exceed a given threshold on a particular day. The bet depended on a single Météo-France weather sensor sitting near the perimeter of Charles de Gaulle Airport on a publicly accessible road. The sensor recorded a spike of 6 degrees Celsius (about 11 degrees Fahrenheit) in 12 minutes before dropping back, and no other station registered the same. A criminal complaint was filed leading to the theory that someone walked up to the sensor with a battery-powered hair dryer.
Beware of Danger Ahead
Betting on prediction markets can become obsessive behavior, as could any gambling activity. It creates new psychosocial concerns. Research shows that sports betting, especially among younger adults and students, can detract from academic performance, strain social relationships, and contribute to anxiety, depression, and financial instability.
Take the case of John Pederson. The Wall Street Journal reported that Pederson, who was covering from a car crash and low on money, took out a variable-interest loan and started betting on Kalshi, the prediction market that promised a quick way to fix that. At first, it worked. Pederson turned about $2,000 into about $8,000, betting on daily snowfall totals in Detroit. He parlayed that into $41,000 by trading on sports, using strategy he has developed with the help of AI. Then he decided to bet it all and lost.
Some young adults have become addicted to the prediction markets wagering and are being harmed by turning away from their studies, losing social connectedness, and losing money, in some cases a lot of money. Persistent betting could cause depression that affects the lives of these adults for years to come.
It’s important that we don’t dismiss the human element when analyzing whether betting on prediction markets is ethical. Virtues are character traits that underlie ethical behavior. A virtue that is relevant with predictions betting is self-control. Self-control involves mastering one’s desires and impulses. It is often associated with temperance and is considered essential for personal discipline and moral integrity. Betting in any form can become contagious and have serious consequences for the bettors.
What Can Be Done?
Goldenberg identifies three steps that the CFTC should take to regulate the bets on prediction markets.
- Require prediction markets to monitor on-platform activity and the resolution sources their contracts depend on.
- Federal authorities should develop investigative protocols for manipulation campaigns linked to market positions.
- Congress should clarify how existing fraud and market-manipulation statutes apply to conduct designed to move prediction-market prices.
Why Bosses Are Firing Gen Z Workers
Reasons for the Disconnect Between Gen Z and Employers’ Values
There are a variety of reasons why employers are firing Gen Z workers at a much faster pace than prior generations. The reasons reflect changing expectations around work, communication, work ethics, well-being, and values.
According to Nicolas Ramirez, “One of the biggest complaints from employers is that Gen Z lacks initiative. Many managers interpret their reluctance to work unpaid overtime or ‘pay their dues’ as laziness. However, many young professionals see work as a way to support their lives rather than define their identity, expecting compensation that matches additional responsibilities.”
Another frequent criticism, according to Ramirez, is that Gen Z constantly questions workplace norms. From requesting flexible schedules to advocating for diversity, inclusion, and mental health resources, younger employees often challenge long-standing practices. While some leaders view this as rebellion, others recognize these conversations as opportunities to modernize company culture.
Managers also report frustration with Gen Z’s desire for continuous mentorship and regular feedback. Ramirez points out that, “unlike previous generations that were expected to figure things out independently, many Gen Z employees thrive when they receive structured guidance and understand how their work contributes to broader organizational goals. Frequent communication often improves both engagement and performance.”
Resume Builder’s Findings
A survey by Resume Builder reports that that Gen Z workers are blaming their parents, not employers, the economy, or AI, for being underpaid, passed over, and disciplined at work. This got me thinking, whether Gen Z takes accountability for their actions, or always seek to blame others for what goes wrong in the workplace. It’s remarkable to me that the blame could be shifted to one’s parents rather than taking personal responsibility. While the failure of parents to instill a work ethic may be true, there are so many other causes that to blame parent’s alone is misplaced. I have two questions: What do Gen Z learn during their education that could have better prepared them to succeed in the workplace? Should colleges and universities instill a work ethic? I believe they should by assigning work that requires the application of critical thinking skills.
The Resume Builder survey of 1,000 U.S. Gen Z workers (ages 18–29) documents what those workers themselves now say about their lack of a work ethic.
- 2 in 3 (67%) Gen Z workers say they’ve been disciplined, underpaid, or passed over because of skills they were never taught at home.
- 6 in 10 (60%) admit their parents coddled them more than prepared them for the workplace.
- 2 in 5 (40%) say they earned less than they should have because they were never taught to negotiate.
- 4 in 5 (80%) are turning to AI and social media to learn basic workplace etiquette, including professional email writing.
- The desire for self-care and personal pleasure; to be happy.
- The desire to express authentic individuality; to have a voice.
- The desire to help people; to make a difference in others’ lives.
- Work should prioritize their well-being, the number one thing Gen Zeers look for in a company. They’re the age group with the highest rates of anxiety, depression, and distress.
- Companies that seek inclusivity and ethical leadership, and have in the wake of social justice reckonings. They challenge the status quo, not because they don’t care, but they may see ways to make their workplaces better and more equitable.
- Gen Z want to feel passionate about their work, uphold their values, and reject what they see as the toxic work mentality.
- Respond better when they are involved in setting the strategy for achieving organizational goals.
- Seek involvement in the decision-making process and valued for their ideas.
- Desire to work for managers sensitive to their needs (i.e., work/life balance).
- Want to receive periodic reviews and learn what shortcomings they may have.
- Want to be paid fairly and been given an equal opportunity for advancement.
- Seek to work for a purpose-driven company that shares their views on the environment and sustainability.
- Care for things outside of work that affect their well-being and want these things built into the ethos of an organization.
KPMG-Australia Scandal: A Case of Decision Drift
Why Didn’t KPMG’s “Speak-Up” Culture Work?
The recent scandal between KPMG and the Australian government centers around the firm’s solicitation of audit clients subsequent to receiving insider information about the bids from other firms to gain audit contracts. KPMG violated independence because of the conflict of interest emanating from ties of firm partners to board members at the prospective clients. The scandal raises many questions about the ethics at KPM: ethical leadership; corporate governance; and the firm’s “speak-up” whistleblowing culture.
What is Decision Drift?
Decision drift refers to the gradual divergence between an individual’s stated intentions and their actual behaviors over time. It differs from “cognitive dissonance,” a phenomenon that often occurs when external pressures or changing circumstances lead to a shift in decision-making, even if the original strategy remains formally intact. Essentially, while a person may have a clear goal or plan, their actions may start to deviate from that plan due to various influences, resulting in a misalignment between intent and execution. Decision drift occurs over a period of time during which decision makers are led adrift by top management that pressure them to overlook ethics. The result is an ‘integrity deficit’ that leads the firm astray.
Integrity deficit refers to how we see ourselves and whether that view is consistent with our actions and beliefs. When there’s a gap between who we think we are and what we actually do, it can lead to feelings of confusion, guilt, and low self-esteem. Much of this occurred at KPMG as decisions were made by top officials, many of whom were ethical people but were led astray by a culture that didn’t support them.
The recent scandal between KPMG and the Australian government is an example of decision drift. It centers around the firm’s solicitation of audit clients subsequent to receiving insider information about the bids from other firms to gain audit contracts. KPMG violated independence because of the conflict of interest emanating from ties of firm partners to board members at the prospective clients.
Writing for Business Day, Toye Sobande says: “Leaders don’t wake up one morning deciding to make poor choices. More often, it is a slow drift, a subtle compromise here, a ‘just this once’ exception there. Months later, you find yourself steering an organization that is no longer guided by its core values but by convenience, urgency, or unspoken pressures.” KPMG did not set out to make unethical decisions but navigated towards them due to competitive and other pressures. As discussed below, the danger wasn’t that they lacked skill; it was that they didn’t realize how far they had drifted.
Revisiting the Scandal
I have previously blogged about the scandal. Since then, I have read a lot about manifestations of the decision drift and integrity deficit. The best way to explain it is by reviewing how whistleblowers were handled by KPMG.
Writing for the Saturday Paper, Jason Koutsoukis points out that KPMG Australia’s two most senior executives had been warned by a powerful parliamentary committee that their handling of whistleblower allegations was under formal scrutiny.
His discussion about the scandal points to the decision drift at KPMG. It starts with the fact that “Federal Labor Senator Deborah O’Neill, who chairs the Joint Committee on Corporations and Financial Services, issued a warning in a letter to KPMG’s chief executive Andrew Yates and chairman Martin Sheppard six days after she used parliamentary privilege to allege the firm had used confidential client information to win audit contracts worth tens of millions of dollars, including those of banking giant Westpac and property group Dexus.”
“Central to the committee’s concerns was whether employees inside KPMG enjoy meaningful protection when and if they choose to blow the whistle on corporate wrongdoing. In a speech to the Senate on March 24, 2026, O’Neill relayed a series of damning allegations made to her by a former senior KPMG executive. She told the Senate each allegation was supported by documentation she had taken a number of detailed steps to verify.”
O’Neill then proceeded to read into the Senate official record the words of the whistleblower, using parliamentary privilege to protect herself and the whistleblower from legal action. “The information disclosed concerned matters that I had reasonable grounds to suspect constituted misconduct or an improper state of affairs or circumstances in relation to a regulated entity. The concerns I intended to raise related to audit independence, misuse of confidential information, tender integrity failures, misleading of Parliament, examination misconduct and governance failures at the senior leadership level.”
At their core, the allegations describe a firm that systematically exploited its privileged access to confidential client information to gain a secret commercial advantage in the competition for some of Australia’s most lucrative audit contracts.
The Case of Lendlease
As Koutsoukis points out, “KPMG exploited its privileged access to confidential client information to gain a secret commercial advantage in the competition for some of Australia’s most lucrative audit contracts. The most serious allegation concerns a KPMG client, Lendlease, one of Australia’s largest property and infrastructure companies. Ultimately, these conflicts of interest undermine the credibility of the entire audit function…”
According to the whistleblower, confidential Lendlease board papers were taken from the company by Eileen Hoggett, KPMG Australia’s chief operating officer, and reportedly next in line to take over as chief executive from Yates, and another senior partner, Paul Rogers, “and were physically secured in Hoggett’s locker” before being circulated within KPMG and allegedly used to support the firm’s pursuit of major audit contracts with companies including Westpac and Dexus.
Critically, the then chair of Lendlease, Michael Ullmer, himself a former KPMG Australia partner and also a current Westpac board member, was allegedly never told that the audit tender had been compromised by the misuse of Lendlease’s confidential materials.
Final Thoughts
It’s important to ask: “Why does drift happen? Sometimes it is the pressure to deliver short-term results at the expense of long-term impact. It also occurs when external forces, stakeholder demands, market considerations, and internal politics overwhelm the organization’s moral compass. Koutsoukis has it right when he points out “there is the deeper truth: decision drift doesn’t just affect organizational outcomes; it erodes trust.” Employees quickly sense when leadership choices feel inconsistent or misaligned. They may not articulate it, but they feel it, and that feeling slowly weakens engagement, accountability, and loyalty.”
Blog posted by Steven Mintz, professor emeritus from Cal Poly San Luis Obispo, on July 28, 2026. Interested parties can contact Steve at smintz@calpoly.edu and visit his personal website at: https://www.stevenmintzethics.com/.
Creating a ‘Fair’ System to Evaluate Academic Achievement in Colleges and Universities
What Can Be Done About Grade Inflation
I have blogged before about the problem of grade inflation in colleges and universities and how it creates a distorted view about the academic achievement of students. How is an employer to know which one of two candidates is better than the other if one deserves an “honest” ‘A’ grade while another student receives the same grade, even though they didn’t deserve it, because of grade inflation. Some employers have started to raise this issue because they perceive that grade inflation is occurring.
Why Grade Inflation is Occurring
I have noticed that grade inflation is increasingly occurring based on my 40+ years of teaching. Here are my thoughts about the causes of grade inflation:
• Students have come to expect that their final course grades will be raised because previous teachers have done the same and students are expecting this outcome.
• Students tend to feel free to debate grades when they disagree with the instructor because they feel entitled to do so.
• Students feel the pressure from employers to achieve the highest grade possible to be competitive with other students.
• Student evaluation of teachers’ performance is a factor in faculty evaluation so faculty [wrongfully] come to believe they need to grade high to receive good evaluations.
• Faculty choose not to debate grades with students. It can be exhausting.
I was interested in what AI would say about why there is grade inflation. Here is what it said:
• Empathy for Students
Professors may feel reluctant to penalize struggling students, leading to higher grades as a form of support. This empathy is often influenced by a growing awareness of mental health issues among students, prompting educators to adopt a more lenient grading approach.
• Concerns About Evaluations
Faculty members may fear that tougher grading could negatively impact their evaluations, which are often tied to job security and career advancement. This creates an incentive to maintain higher grades to avoid unfavorable assessments from students and administrators.
• Peer Pressure and Competition
At prestigious institutions like Harvard, there is pressure among faculty to avoid being perceived as tougher than their peers, which can discourage student enrollment in their courses. This competitive environment can lead to a culture of grade inflation as faculty aim to attract more students.
• National Trends
Grade inflation is recognized as a broader issue across educational institutions, intensifying over decades. This trend reflects systemic changes in educational practices and expectations, contributing to the overall increase in high grades awarded.
Clearly, there is overlap with my opinion. The question then becomes, what, if anything, can be done to mitigate the effects of grade inflation. The answer may be to use the SAT exam to level the playing field and provide an objective measure of achievement.
Is using SAT Scores the Answer to the Problem? The Views of Robert Kaplan
Robert Kaplan is a senior scholar at the Stanford University School of Medicine’s Clinical Excellence Research Center. He says that “The debate has been framed as a choice between fairness and academic excellence. Supporters argue that standardized tests predict college success and provide an objective measure of academic ability. Opponents counter that test scores disadvantage students from historically underrepresented and lower-income backgrounds. Both sides make valid points. But they are arguing about the wrong problem.”
Kaplan provides a useful insight into the problem and why it occurs. He says: “Universities keep returning to the SAT because nearly every other component of the admissions process has become less informative. Admissions committees face an increasingly difficult task.” I totally agree!
According to Kaplan, recommendation letters are not reliable because they rarely mention weaknesses, forcing admissions officers to search for subtle clues that distinguish one exceptional-appearing applicant from another. Artificial intelligence can produce polished prose in seconds, while teachers, counselors and private consultants often help applicants revise essays repeatedly before submission, and so do parents. The result is an applicant pool in which almost everyone appears extraordinary
Grade inflation in college has become more pronounced. During the 2024–25 academic year, 84% of grades issued at Harvard were ‘A’ or ‘A-,’ compared with 24% in 2005. Similar trends have been reported for most elite campuses, including UC Berkeley. When nearly everyone receives the highest grades, those grades lose much of their meaning.
So, what’s the conclusion? Standardized tests remain among the few measures that consistently distinguish applicants, giving the SAT more influence than its predictive value alone would warrant. Supporters argue that the SAT is unbiased because it predicts college performance similarly across racial and ethnic groups. But that misses a larger issue.
Kaplan says that: “Average SAT scores differ substantially across racial, ethnic and socioeconomic groups, reflecting unequal educational opportunities, family income, parental education and other advantages. As a result, increasing the weight of standardized tests inevitably changes who is admitted.”
Depending on the weight given to SAT scores, it could impede establishing a diverse student body. An admissions system that increasingly favors students with the greatest educational advantages risks weakening higher education’s role as a pathway to opportunity,
Harvard’s Proposal
In “Harvard Proposes Capping A’s to Curb Grade Inflation,” Mark Arsenault reports on how the Ivy League school is trying to make high-level grades more meaningful after a recent report found that a vast majority of grades were A’s:
Harvard undergraduates would compete for a limited number of A grades in their courses under a faculty committee proposal released Friday meant to tame grade inflation at the Ivy League school.
During the last school year, about two-thirds of all undergraduate letter grades were A’s. Under the new proposal, grades of A would be limited to 20 percent of grades in a course, with an allowance of four additional A’s.
So, for example, a professor teaching a class of 100 students would be able to award up to 24 grades of A under the proposal, which could come to a vote by faculty this spring. There would be no limits on A-minus and lower grades.
Grades of A at Harvard are supposed to be reserved for work of “extraordinary distinction,” but they have exploded to become the majority of grades awarded.
The article continues:
Views of Joshua Silverstein
Joshua Silverstein, a professor of law at the University of Arkansas at Little Rock, said the proposal, if approved, should effectively control inflation and make grades more meaningful. The purpose of grades, he said, “is to signal to students their level of accomplishment and subject mastery, help outside parties such as employers and graduate school admissions officers differentiate among candidates, and to help fairly disperse rewards, such as honors and merit scholarships.
“I like what Harvard is doing,” said Silverstein, who has studied and written about grading theory. “I think it’s a very important step in the right direction” to allow grades to once again serve their intended function.
Conclusion
I agree with Silverstein. If grades are determined by previously established standards regarding the percentage of ‘A,’ ‘B,’ ‘C’, etc. then a fair comparison is more likely to occur and prospective employers would have a better measurement of academic achievement.
The answer lies in each university establishing grading standards in a similar way, and enforcing them as part of faculty evaluations. In this way, there will be a more leveling field than exists currently.
Blog posted by Steven Mintz, PhD, professor emeritus from Cal Poly San Luis Obispo, on July 21,2026. You can communicate with Steve at: profdocsteve@gmail.com. Visit his website and learn more about his activities.
KPMG-Australia Scandal: A Cautionary Scandal
Introduction
The recent scandal between Big-Four firm KPMG and the Australian government centers around the firm’s solicitation of audit clients subsequent to receiving insider information about the bids from other firms to gain audit contracts. KPMG violated independence because of the conflict of interest emanating from ties of firm partners to board members at the prospective clients. The summary below provides an overview of the ethical issues that arise in these relationships. This case provides a cautionary tale for all firms that seek to gain an advantage in the highly competitive audit bidding process.What’s the Scandal All About?
- A KPMG whistleblower raised concerns with the firm’s senior leadership team in 2024 that confidential board papers from construction giant Lendlease were used to pitch for and win audit contracts from other firms, including Westpac and Dexus.
- An internal investigation did not substantiate the claims, with a further external investigation by legal firm Ashurst supporting the initial outcome.
- However, after the whistleblower raised further complaints with the board, a different external law firm, Allens, was appointed to complete another investigation into the claims. This investigation had uncovered secondary instances of inappropriate document sharing.
- In March 2025, with the protection of parliamentary privilege, Labor senator Deborah O’Neill aired the claims of the Australian government.
- Following O’Neill’s speech in the Senate, KPMG told Lendlease that an audit partner had accessed the company’s board papers and “that these documents were put on a screen in the presence of the KPMG audit team then.”
- In May, KPMG chief executive Andrew Yates and audit partner Julian McPherson quit their roles over the handling of the whistleblower’s allegations.
- KPMG released a statement apologizing to the whistleblower, saying the initial investigations “fell short of the firm’s expectations”.
- KPMG chief operating officer, Eileen Hoggett, was demoted from her role on June 2, 2026.
- For his role in the ethics failure, Andrew Yates said: “I have been committed to a speak-up culture in our firm, it is clear that in this case we have let ourselves down and I take accountability.”
Why Should We Care?
- The “big four” firms advise Australian businesses and the government and have earned about $21 billion in taxpayer-funded contracts over the past 10 years. The federal government alone currently has about 300 active contracts with KPMG, worth $653 million, which is being investigated over claims it misused confidential client information.
- One reason to care about the KPMG-Australia scandal, is that a similar scandal happened before. The SEC charged accounting firm EY, two former partners, and an existing partner with improper professional conduct during 2014 for violating auditor independence rules in connection with EY’s attempt to win would-be client, Sealed Air’s, audit business. EY partners improperly interfered with the issuer’s selection of an independent auditor. They solicited and received confidential competitive intelligence and confidential audit committee information during the request for proposal (RFP) process.
- Accounting firm PwC was found to be misusing confidential government information to help multinationals avoid tax, embroiling it in a scandal with the Australian government.
- The arm dealing with public contracts was sold off for a dollar in 2023, and PwC currently does not bid for any federal government contracts due to a non-compete clause.
Mishandling Client Information
- KPMG lost contracts and leaders amid scandal over alleged confidential leaks that centered on an internal whistleblower’s allegations that some of the firm’s senior partners misused confidential client documents.
- KPMG-Australia shared secret client information internally in order to win lucrative audit contracts, a whistleblower had alleged.
- Australian Securities and Investment Commission (ASIC) said during a Senate committee hearing on June 5, 2026, it had opened a formal investigation into KPMG and issued multiple compulsory notices to the firm.
- Chartered Accountants Australia and New Zealand (CA ANZ) announced on June 11, 2026 that it was “deeply disappointed” by the “serious allegations” against KPMG-Australia and is reviewing the firm’s conduct.
- Department of Finance (DOF) has investigated the firm’s governance and ethical standards.
- Top partners and auditors at KPMG-Australia shared client Landlease’s confidential information with other KPMG employees without the knowledge of Landlease’s board of directors. The firm was charged with unprofessional and unethical behavior.
- The scandal first came to light in March 2026, when Labor senator Deborah O’Neill detailed whistleblower allegations for the first time that confidential data had been shared and potentially used to win new business with other clients.
- In April 2026, the allegations were substantiated, by a KPMG internal investigation, and triggered the resignations of CEO Andrew Yates and audit boss Julian McPherson.
Whistleblower Allegations
- Confidential information had been inappropriately shared within the KPMG’s senior leadership team to win audit contracts, including with the CEO.
- Landlease’s confidential board papers were used without permission to help win bids for audit work from the large bank Westpac and the property company Dexus.
- The whistleblower – a formerstaff member at the firm – alleged clients’ confidential information was repeatedly shared internally to win lucrative contracts for audits.
- The whistleblower also alleged inappropriate handling of documents from Macquarie Group, Westpac and Dexus dating back to 2023.
- On May 29, 2026, KPMG said its treatment of the whistleblower fell short of its expectations and its initial investigation was not rigorous enough.
- That investigation was backed by a second review by external law firm Ashurst and a third by law firm Allens, though Allens is now challenging its past finding in a fourth review, KPMG told a parliamentary inquiry.
- The firm has admitted unethical internal leaks but initially refused to hand over its investigations to regulators. Its London-headquartered international arm has issued a general apology but initially denied responsibility.
What Was KPMG’s Response?
- The KPMG Board had identified areas where the firm had fallen short of the standards it expects in the handling of whistleblowing matters, including management of the allegations.
- KPMG Chairman Martin Sheppard accepted the resignation of Andrew Yates, CEO of KPMG Australia, as the executive with ultimate responsibility for management of the whistleblower process and the management-led investigations.
- The Board appointed Stan Stavros as interim CEO of KPMG Australia while continuing its process to appoint a permanent successor to Yates.
- A senior insider at KPMG Australia raised concerns that confidential board papers and highly sensitive client documents were being shared inside the firm to help win lucrative audit tenders. Over roughly two years, those concerns were examined, re-examined and initially dismissed through internal and external reviews.
- Today, that same set of concerns sits behind a chain of events that raises questions about ethical leadership and governance at KPMG. The CEO and head of audit have resigned, the COO has stepped aside from her executive role, ASIC has escalated to a formal investigation, more than $270 million in Commonwealth contracts are under scrutiny, and a parliamentary committee is preparing to question the firm and its advisers in public.
- The KPMG-Australia scandal did not happen simply because one person spoke up. It happened because the organization could not hear them properly.
- On July 17, 2026, it was announced that KPMG senior partner Kim Lawry would leave the firm after Westpac demanded she be removed over her role in the audit leaks scandal engulfing the firm.
Rebuilding Trust in KPMG
For CEOs, executives and directors, the most important lesson in the KPMG is that when a whistleblower tests your culture, they are not just testing your ethics. They are testing your entire governance architecture. KPMG Chairman Sheppard has said: “We apologize unreservedly to the whistleblower. We commit to learning from this process to ensure we create an environment where it is safe and easy to surface concerns that will be acted upon.” “KPMG apologizes to the clients whose information was not handled with the care and respect they expect from us. We also apologize to our people – as these matters do not reflect on the contribution they make to KPMG and our clients.” “In addition to the ongoing external Allens investigation which has thoroughly investigated the allegations, we have also engaged Principia Advisory, a leading global specialist in ethical culture, to undertake an external review of our underlying speak up culture, including the policies and processes that support this.” “KPMG is committed to transparency and will publish the findings of the Principia review. We will move swiftly to act upon their recommendations. We are reinforcing and strengthening the controls that protect client confidentiality, and we will set out for our clients the specific steps we are taking to keep their information protected. For each of our audit clients we will confirm that any conduct matters do not impact the quality of their audits.” “We acknowledge we have work to do to rebuild trust. That’s why we are not asking anyone to take our word for it, and we are inviting scrutiny and challenge on our remedial actions.”What Does AI Say?
The debate over spinning off audit and consulting services in Australia is intensifying. Recent scandals involving major firms like KPMG and PwC have prompted the Australian government to consider significant reforms, including the potential separation of these services. AI provides food for thought going forward.Key Considerations
- Conflict of Interest: Combining audit and consulting services can create conflicts of interest, where auditors may feel pressured to overlook issues in favor of consulting revenue.
- Regulatory Oversight: The proposed reforms aim to bring these firms under stricter regulatory scrutiny, ensuring that auditing remains independent and objective.
- Public Trust: High-profile scandals have eroded public trust in these firms, making a strong case for structural changes to restore confidence in the auditing process.
Conclusion
The discussion around spinning off audit and consulting services is driven by the need for greater transparency and accountability in the industry, particularly in light of recent controversies. It is quite possible that the different cultures of those involved in consulting work and those of audit professionals can no longer co-exist. It could be that the looser standard for independence and objectivity in providing consulting services has influenced that for audit and assurance services. The break-up of services his being considered by the Australian government and already in the United Kingdom. However, it has not gained traction in the U.S. The time is ripe for the PCAOB and SEC to consider the same issues.Questions to Consider
- Explain how KPMG misused confidential client information to secure audit contracts.
- What is meant by a “speak up culture.” How does this relate to the whistleblowing failures at KPMG?
- It is said in the case that “The KPMG-Australia scandal did not happen simply because one person spoke up. It happened because the organization could not hear them properly.” Explain what is meant by this statement.
Do Faculty Members Teach Enough?
An Analysis of Expectations for University Faculty
I have taught at the university level for over 40 years. During that time, I served as a tenured faculty member, a department chair, and dean of a business school in the California State University System (CSUS). The thorniest issue that I faced was what should be the workload for faculty. This may sound like a no-brainer, but it’s really more complicated.
The purpose of this blog is to address the teaching load issue including fairness of a teaching load, responsibilities of faculty, responsibilities to students, and state budgeting issues. All of these factors play into the often-mentioned complaint that the cost of higher education to students is way out of line. I also review an excellent article in The Chronicle of Higher Education on these issues.
The Mission of a University
The first thing readers need to understand is whether a given university is part of the higher education model in a given state or a private institution. For purposes of this blog, I am only addressing state universities where changes in the teaching load can impact the amount of money spent on supporting these institutions. The monetary effect of increasing the teaching load has budget implications for state-run institutions.
Next, we have to consider what is the mission of institutions of higher learning. In California, the top-level of university education is the various campuses of The University of California (i.e., UC, Berkeley, UCLA). The second tier are the state universities (i.e., San Diego State University, California Polytechnic state universities). The UC system is designated as having the most stringent research requirements for faculty. The expression, “Publish or Perish,” fits nicely into describing these faculty requirements.
Are Research Requirements Too Stringent?
The State Universities also have research requirements, but the level and extent of publication is lower than for UC faculty, or at least lower in importance—at least to the institution. This is important because typically it takes more time to produce a high-level research paper than one in a ‘lesser’ journal. There are, of course, exceptions. The point is that faculty teaching in the UC system are given a lighter teaching load because of the greater demands on their time spent on research.
My experience is that those who teach at research-designated institutions teach as little as one course per term, and some may not teach at all. At these institutions, Teaching Assistants do most of the teaching. These are, typically, PhD candidates at the institutions who earn money from teaching and gain practical experience.
At state institutions, some faculty might be expected to publish more than others, for example, a PhD faculty member falls in the former category and might teach only one or two courses per term. However, the faculty without a doctoral degree, many of whom might be so-called “clinical” faculty, may have a much higher teaching load, and much lighter research requirement. These faculty often have a master’s degree in their field (i.e., master’s in accountancy) and, perhaps, a certification in their field (i.e., CPA).
Included in the forementioned group are so-called “lecturers” and “instructors.” Their teaching load could be as high as four courses per term. Increasingly, universities have been hiring more in this category so that the institution can lower the teaching load of PhD’s so they can research more, and the cost of hiring a non-PhD’s is lower. Their salaries are much lower, teaching loads higher, and they may not be given health benefit coverage. This has major implications for the state budget.
Is Research by PhD-Level Faculty Useful?
Now that you have the lay of the land, let me address what I consider to be the oft-excluded variable in determining what should be a fair teaching load that recognizes the needs of the students, professionals and other communities, which is does published research have a value to students and these communities.
I’ve been around the block a few times and have observed that the highest-level research journals often have a myriad amount of research statistics that, in my view, most faculty (especially non-PhD) do not understand. One reason is that while statistical research is generally required in PhD programs, it is not in master’s programs. I believe very few students understand such published work, unless they are enrolled in a doctoral program. Also, it’s debatable whether those in the professions and other communities would understand statistically-based research papers or derive any value from them. This is, of course, a subjective consideration and, there is no doubt, that some of such research is useful to professionals and even government agencies, especially if they are linked to research grant funding. The issue is quite different for non-PhD faculty who typically publish practical research that has an applied element to it and may even affect the activities for these professionals.
Chronicle of Higher Education
“The Faculty Workload Myth” published article in The Chronicle of Higher Education reports that: “Last July the Wisconsin State Legislature passed a higher-education funding bill that mandated higher teaching loads for most public universities in the state. In October, the Utah State Board of Education increased teaching loads for instructional faculty. And in January, the Kansas Board of Regents passed a policy dictating faculty teaching loads along with a stricter workload and tenure policy.” The message from these states is clear: Faculty don’t teach enough.
The Chronicle article covers a lot of ground, and I recommend that interested readers check it out. It looks at a few questions, much of which is addressed in my blog:
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Nothing Changes if Nothing Changes
Transforming your life by Changing Behavior
The other day I was thinking about how difficult it can be to change bad habits and behaviors. I reflected on my own experience. Earlier in life, I had problems controlling my temper. It took many years of therapy to make the very difficult change so that I no longer get upset when things go wrong, which happens all the time in life. For me, I learned to control my temper when I became the Dean of a Business College and had to deal with entitled faculty. I quickly learned that trying to debate faculty and/or call them out for selfish behavior was a losing battle. I opened my mind, listened to their issues, showed empathy, did what I could to make a positive difference in their lives, and became successful at what I did.
I recall during my therapy something my therapist said: “Nothing changes if nothing changes.” This seems overly simplistic but is easier said than done. Changing one’s behavior may be the most difficult thing to do in life.
Mindfulness for Wellbeing
Writing for Psychology Today, Itai-Ivtzan discusses “Mindfulness for Wellbeing:” He says: “We frequently feel compelled to shake things up—to transform everything so that life feels exciting and fresh again. But transformation is not that easy. It requires an active approach. You need to change things for your life to change.” The key points are:
- Research shows that people who actively engage in new activities can have a significant well-being increase.
- Different things inspire change in our lives; you have to play with the different options to find yours.
- Change requires an active approach.
- Identify 1-2 specific areas you want to improve. Maybe it’s finally losing those last 10 pounds, finding a new job, cultivating healthier relationships, or shifting from a scarcity to an abundance mindset. Get very clear on your goals for change and how you’ll measure progress.
- Reflect on what current behaviors and thought patterns are contributing to the status quo you want to change. Radical self-awareness is key! For example, are you constantly on social media making you feel bad about yourself? Are you staying later at the office out of obligation vs. necessity?
- Break bigger goals down into smaller action steps you can tackle one by one. For example, if your goal is establishing a consistent gym routine, start by just going once a week. Build up from there.
- Enlist friends to support you and hold you accountable. Maybe you check in weekly on your progress. Accountability partners help motivate us when we slack off.
- When you inevitably slip up, get back on track the very next day vs. abandoning your goal altogether. Persistence and immediate course correction get results.
- Pay attention to cues and triggers threatening your new positive habits. If afternoon fatigue derails your gym plans, schedule workouts for mornings. Adapt your plan accordingly.
- Use tools like phone reminders and calendar appointments to help build new routines. The more it becomes an engrained habit, the less you’ll rely on prompts.
- Monitor your progress week by week. Are you noticing small wins? Celebrate when you achieve milestones! Marking progress keeps you motivated.
- Change takes time and consistent effort before it becomes natural. Be patient with yourself. Even small progress is still progress.
What Do Gen Z Want from Their Work Experience?
The Values Gap
I can remember, growing up, and hearing my dad say that my generation does not have the work ethic to succeed. I suppose every generation says something like this directed towards the next generation of workers. I know he used it as a motivational tool, promising me a successful career in professional accounting and university teaching, which has, in fact, occurred. I have always looked for a meaningful experience from work that allowed me to grow and develop both as an individual and as part of a work group. I also sought to change my little space in the world and believe I have through hard work and a commitment to do the right thing. This made me wonder what Gen Z are looking for from life and their workplace experience.
I have blogged before about the work ethic of Gen Z. Like the generations before it, Gen Z is being criticized for not working hard enough, not caring enough, and seeking their own values rather than those of their employer.
There have been many studies on Gen Z—what makes them tick; what they expect from the workplace; what are their values, and so on. I was surprised to learn about the results of a study by NYU professor Suzy Welch on Gen Z and businesses. Welch teaches M.B.A. students and attempts to prepare them for a life of purpose and leadership. There’s just one problem: their values.
Welch’s groundbreaking 2024 study, based on over 45,000 participants—including 7,500 Gen Zer’s—reveals a distinctive values gap between hiring managers and the youngest working generation. Welch’s analysis produced an outcome that startled her and her team: A mere 2% of Gen Z members hold the values that companies want most in new hires, which are achievement, learning, and an unbridled desire to work. Gen Z respondents’ top three values are:
- The desire for self-care and personal pleasure; to be happy.
- The desire to express authentic individuality; to have a voice.
- The desire to help people; to make a difference in others’ lives.
- Work should prioritize their well-being, the most important thing Gen Zer’s look for in a company. They’re the age group with the highest rates of anxiety, depression, and distress.
- Gen Z prioritize diverse, inclusive companies with ethical leadership, and have in the wake of social justice reckonings. They challenge the status quo, not because they don’t care, but they may see ways to make their workplaces better and more equitable.
- Gen Z want to feel passionate about their work, uphold their values, and reject what they see as the toxic work mentality.
Snatching Defeat from the Jaws of Victory: Trump Versus Iran
The ‘Emperor Has No Clothes’
The phrase to snatch victory from the jaws of defeat, and its variants, mean: to win a battle, contest, etc., when defeat seemed inevitable. Conversely, the humorous phrase to snatch defeat from the jaws of victory, and its variants, mean: to be defeated in a battle, contest, etc., when victory seemed inevitable. Clearly, the second best describes what Trump has done during the war with Iran. The MOU described below is an example of poor leadership and the failure to consider stakeholder needs before deciding on actions.
Many people see flaws in Trump’s policies or behavior but remain silent due to fear of backlash. The phrase ‘the emperor has no clothes’ recognizes the challenge of addressing uncomfortable truths in political discussions about Trump. It emphasizes the need for accountability, as some may avoid confronting issues for fear of disrupting the status quo. In its extreme, actions are not taken by those in Congress because they fear being bullied by Trump and incurring his wrath,
What Did the JCPOA Do?
President Obama entered into an agreement with Iran on July 14, 2015, the goal of which was to make it hard for Iran develop nuclear bombs. The Joint Comprehensive Plan of Action (JCPOA) aimed to limit Iran’s nuclear program.
To limit Iran’s nuclear capabilities and enhance global security, the JCPOA achieved the following:
- Reduced Iran’s uranium enrichment levels to below weapons-grade.
- Limited the number of centrifuges Iran could operate.
- Increased transparency through regular inspections by the IAEA.
- Extended the timeline before Iran could develop a nuclear weapon.
- Provided sanctions relief to Iran in exchange for compliance.
- Established a framework for future negotiations on regional security issues.
- Belief that the agreement was too lenient on Iran regarding nuclear development.
- Concerns over Iran’s regional activities and support for terrorism.
- Desire to negotiate a more comprehensive deal that addresses missile programs and regional influence.
- Pressure from allies and domestic political groups opposing the deal.
- Aiming to reassert U.S. dominance in foreign policy and strengthen sanctions against Iran.
- Criticism that the JCPOA did not effectively prevent Iran from eventually acquiring nuclear weapons.
- The MOU calls for a complete ceasefire in the war.
- Both parties pledge to respect each other’s sovereignty and territorial integrity and refrain from interfering in each other’s internal affairs.
- Both parties agree to reach a final agreement in a maximum of 60 days, ending on August, 16, although the deadline could be extended with mutual consent.
- Immediately upon signing the MOU, the U.S. will begin the removal of its 60 naval blockade and complete it within 30 days.
- Upon signing the MOU, Iran will make arrangements using its best efforts for the safe passage of commercial vessels with no charge, for 60 days only, from the Persian Gulf to the Sea of Oman and vice versa.
- The U.S. undertakes with its regional partners to develop a definitive, mutually agreed plan with at least $300 billion for the reconstruction and economic development of Iran. The plan will be finalized within 60 days.
- The U.S. undertakes to terminate all types of sanctions against Iran, including the United Nations Security Council resolutions.
- Iran reaffirms that it shall not procure or develop nuclear weapons. The two parties have agreed to discuss the disposition of stockpile enriched material pursuant to a mechanism that will be mutually agreed upon in accordance with other provisions in the agreement and under the supervision of the International Atomic Energy Agency (IAEA).
- Pending the final deal, both parties agree to maintain the status quo, meaning Iran will maintain the current status quo of its nuclear program, and the U.S. will not impose new sanctions and will not deploy additional forces in the region.
- The U.S. undertakes upon the signing of this MOU and until the termination of sanctions, that the U.S. Department of Treasury will issue waivers for the export of Iranian crude oil, petroleum products, and derivatives, and all associated services including banking transactions, insurances, transportation, etc.
- The U.S. undertakes to make fully available for use of the frozen or restricted funds and assets of Iran upon implementation of the MOU. Both parties will mutually agree on the procedures related to the release of these funds during negotiation.
- The U. S. and Iran agree that an executive mechanism will be established to monitor the successful implementation of this MOU and the future compliance of the final deal.
- After signing the MOU, and subject to the implementation of items # 1, 4, 5, 10, and 11 of this MOU, and continuing implementation of these measures, the U.S. and Iran will begin negotiations regarding the final deal exclusively on the other items.
- The final deal will be endorsed by a binding the UN Security Council.
- Total elimination of Iran’s nuclear program.
- Destruction and dismantlement of Iran’s ballistic missile program.
- Eliminating Iran’s navy.
- Rounding up Iran’s regional proxy network (i.e. Hamas, Hezbollah).
- Overthrow the brutal Islamic Republic that has terrorized and bedeviled the U.S. and its partners for nearly 50 years.
- What the war would mean for the American public. Obviously, gas prices have gone sky high despite Trump’s statements. He has cited $1.85 gas during his State of the Union address, but averages remain near $3 nationally,
- The MOU calls for the permanent termination of military operations, including in Lebanon. Trump has been saying that the agreement implies that Israel will end its war with Lebanon. The war is with Hezbollah, not the Lebanese government. The failure to include that Iran will stop its supplying of weapons to Hezbollah and Hamas is a grave oversight.
- Iran only commits to a 60-day period of not charging ships for passage through the Strait of Hormuz. Can you guess what will happen after the 60 days expire?
- The agreement leaves the Strait of Hormuz solely in the hands of the Iranians. This means the U.S. got nothing in return for ending its naval blockade.
- The MOU does not provide any details about who will contribute to the $300 billion reconstruction and development of Iran. It mentions the U.S. regional partners. What does he mean? Did he actually discuss this with the likes of Oman, Qatar, UAE, Kuwait.
- By agreeing to terminate all sanctions, Trump did what President Obama had done as well. The figure is under dispute, with some saying that we returned as much as $150 billion in a cash payment under Obama while others claim it was much less. Nevertheless, while Trump blames Obama for his deal with Iran, the JCPOA was stronger and better in terms of U.S. interests.
- The U.S. agreed to terminate all sanctions against Iran, including the UN Security Council resolutions. In other words, Trump abandoned the leverage that could make Iran more willing to sign the agreement, and with provisions more favorable to the U.S. The U.S. has imposed sanctions since the 1979 Revolution. Is this indicative of “The Art of the Deal?”
- The agreement to rein in Iran’s nuclear ambitions is nothing more than an agreement to reach an agreement within 60 days. Trump’s failure to have this included more definitively in the MOU is, arguably, the most glaring shortcoming of the deal.
Consequences of Learning and Working in an AI-Driven Environment
Why Students and Workers Fear the AI-Centered World
Well, the commencement season has come and gone. What have we learned? It seems clear that there is some trepidation on the part of students who fear that AI-generated information will lead to a reduction in available jobs as machines do the work of student/workers.
Commencement speakers at the University of Arizona and elsewhere were met with boos when they mentioned AI. As reported in a posting on the Inside Higher Education, “students have balked as commencement speakers have either told them to embrace AI, or have otherwise mentioned the ever-expanding role of the technology in a speech.”
It seems clear that a lot of students in the graduating classes of 2026 don’t want to hear about AI given that the job market for new grads is tough and many likely believe that AI is at least one factor. Still, it is a technology that affects workplace decision-making—and growing by leaps and bounds—and there’s nothing to do but learn to work with. Students need to learn how to embrace the benefits of using AI and deal with possible negative consequences of its application in the workplace.
Student Concerns
New data from Inside Higher Ed’s ongoing “Student Voice” helps map students’ complex feelings about AI and how their colleges are responding to its rise. Some 1,038 students from 203 institutions, public and private nonprofit, responded to a flash survey on AI taken in May, 2026. The upshot of this flash survey of four-year students is that most are neither AI evangelists nor outright opponents, and they’re actively using AI for coursework. At the same time, they wrestle with concerns about agency, a changing career landscape and more. Some four in 10 are explicitly concerned about dependence on AI tools, even as six in 10 see AI’s primary value to them in college as learning support.
Some 55 percent of students also expect AI to negatively impact their career prospects. Have colleges been successful in helping students navigate AI and what it means for their futures? Not really, as far as respondents are concerned: The plurality, 34 percent, are neutral on their institution’s efforts, describing them as inconsistent, while an additional 21 percent describe them as at least somewhat poor.
Student Perspectives
“Student Voice” is an ongoing survey and reporting series that seeks to elevate the student perspective in institutional student success efforts and in broader conversations about college. The six takeaways from the survey regarding AI are:
Takeaway 1: More students are using AI than ever for coursework, while a significant share—20 percent—remain resisters.
Takeaway 2: “Worried about dependence” is the most common student stance on AI.
Takeaway 3: A majority of all students expect AI to somewhat (39 percent) or very (16 percent) negatively impact their career prospects.
Takeaway 4: Just one in 10 students says that their institution is handling AI’s rise very well, in a thoughtful and proactive way.
Takeaway 5: Asked how AI can be most useful in their college experience, students are most enthusiastic about AI as learning support.
Takeaway 6: Students are somewhat split on their priorities for AI leadership at their institution.
Gen Z Say AI is Making Them Dumber
Gen Z’s distaste for AI can be seen in new research from “GoTo”, which specializes in cloud-based business communication, IT management, and remote support software. The results of the survey of 2,500 global employees conducted in partnership with Workplace Intelligence, tell a story about a workforce caught between the tools that help them and the habits those tools are forming as indicated in the study.
- 50% of employees say they rely on AI too much.
- 30% say they can no longer function without it.
- 39% believe their overreliance on AI is actively eroding their skills and making them less intelligent, a number that climbs to 46% among Gen Z workers.
Change is Omnipresent in Our Personal Lives
Wherever You Go, There You Are
I have previously blogged about the difference between morals and ethics. In this blog, I distinguished between how each achieves its purpose of guiding right behavior. While morals are concerned with principles of right and wrong in general, ethics are related to right and wrong conduct of an individual in a particular situation. Whereas morals are customs established by a group of individuals, ethics defines the character of the individual. While morals represent what a person, group, or society believes people should do, ethics are guiding principles that help the individual or group decide what is good or bad. Morals are expressed in the form of general rules and statements. Ethics are abstract. They need context to decide what is right or wrong.
In this blog, I discuss the journey one takes to achieve rightful behavior and the obstacles that make it more challenging to do. To start, we should remember that what we do matters. We can make changes in our own behavior and contribute to the betterment of society. It’s not easy. The destination has to justify the struggle to improve humankind.
Returning to a Moment of Time Once it Has Passed
One can never return to a moment of time once it has passed. Each passing moment represents a lost opportunity that can never be replaced. Don’t relive past problems. Don’t carry baggage. What’s done is done. This means if you have made a decision or chosen an action that you regret later on, don’t obsess about it. Move on and commit to changing your behavior. It can be done.
Sometimes we think that life is circular. We choose a goal; move towards it; a decision is made; and then we repeat the process again. Instead, think of life as linear. You choose a purpose; direct your behavior towards achieving it; and then, with laser focus, concentrate intensely on the specific task or goal you have chosen. The future is not locked into actions of the past. Christianity, Judaism, and Islam all teach that individuals can change their behavior over time to achieve moral decisions and actions. We can advance ethically.
Changing Behavior
Most people want to improve; become a better person. This is why so many self-help books are sold. Many of us promise to do better but fall back into the same pattern over time. It is a circular pattern of behavior that frustrates us over time. Why is it so difficult to change a pattern of behavior? It’s because we have made such behavior a habit and habits are hard to change.
I searched for a way to characterize the struggle to change behavior and lo and behold found it in AI. Ancient Greeks emphasized the importance of habits in shaping character and behavior. They believed that habits are crucial for developing virtues and achieving moral excellence. Aristotle, in particular, argued that virtues are essentially habits formed through practice, suggesting that a good life is achieved by cultivating positive routines. The role of habits in ethics then could be characterized as follows.
- Aristotle posited that ethical virtues, such as courage and temperance, are complex skills developed through habitual practice.
- The formation of good habits is seen as essential for living a fulfilling life.
- Ancient Greek philosophers also linked habits to health, advocating for balanced diets and mindful routines as pathways to longevity.
- They believed that maintaining a harmonious lifestyle contributes to both physical and moral well-being.
- People resist behavior tools that clash with beliefs about willpower and personal responsibility.
- We value internal willpower over external strategies — even when the latter are more effective.
- Designing effective interventions requires understanding the values people feel are being violated.
30th Annual Ethics Research Symposium
Public Interest, Ethics, and Sustainability Section of the American Accounting Association Sunday, August 2 in Las Vegas, NV
Speakers
Kathleen M. Hamm
Kathleen M. Hamm was appointed a Board Member of the PCAOB by the SEC December 2017, sworn in on January 2018, and served until November 2019. Since September 2018, Board Member Hamm served as Vice Chair of the IFIAR Global Audit Quality Working Group. Hamm served at the U.S. Treasury Department from 2014 to early 2017, as counselor to the deputy secretary on cybersecurity and related governance, regulatory, compliance, and risk management issues facing the financial services sector. She also assisted the deputy secretary in coordinating Treasury’s strategic policy initiatives, domestically and internationally, through a cybersecurity expert group impaneled by the G-7 finance ministers and central bank governors.
Joe Howie
Former EY Partner | 30+ Years in Audit | Fraud Risk Identification & Response | Whistleblower & Internal Investigation Consulting | Commentary on Audit Culture, Fraud Detection, and Investor Protection. Joe spent more than three decades inside the global audit profession, including as a partner at EY. During that time, I worked on complex multinational audits and served in the firm’s U.S. and Global Professional Practice groups, advising engagement teams on difficult accounting, reporting, and audit matters. Over time Joe became increasingly concerned about structural incentives within large accounting firms that can undermine the profession’s core responsibility: protecting investors and supporting the integrity of capital markets and has spoken out about these issues.
Rick Kravitz
Rick Kravitz is an award-winning author and publisher, a member of the American Bar Association and American Institute of CPAs. He is former President and Group Publisher of Panel Publishers/Wolters Kluwer [WK]. Later in his career, residing in the Hague, Netherlands, he served as International Legal/tax Publisher at Wolters Kluwer where his team covered the criminal law proceedings of the United Nations International Court of Justice. Rick is a former Editor in Chief of The CPA Journal including Managing Director of Content and Publishing with the New York Society of CPAs. Most recently he published The Crisis in Public Accounting. The book explores the many failures of the accounting profession to detect, deter and prevent fraud.
Moderator: Steven Mintz, Cal Poly San Luis Obispo
Posted by Steven Mintz, aka “Ethics Sage” on June 3, 2026
Dumbing Down American Education
U.S. Kids Are Falling Behind Their Global Counterparts
I have previously blogged about the failures of K-12 education in the U.S. The most recent National Assessment of Educational Progress, known as The Nation’s Report Card, found that barely a quarter or less of students are proficient in reading, and even less are proficient in math, geography, and U.S. history. U.S. 4th and 8th graders are performing worse not only compared to East Asian countries, but also to such places as Poland, the U.K., South Africa, Turkey, and Sweden, all of which have boosted their scores.
Math and English Skills Are Getting Worse
Joel Kotkin writes for amaericanmind.org that “America’s universities may be a disgrace, but the deeper problems with our education system lie with grades K-12. Higher education still ranks as a U.S. strength that other countries might admire—but our grade schools might even be inadequate for poor, developing countries. Overall, some 40% of all U.S. public school students fail to meet standards in either Math or English, up 8% from pre-pandemic levels.
A recent federal survey suggests that 28% of Americans now occupy the lowest level of literacy, up from 19% in 2017. Schools have abandoned phonics and other effective approaches for “whole language” and other trendy theories, producing a population where 60% of 4th graders are poor readers.
Bring Back the SAT or ACT
Recently, more than 600 University of California faculty members, led by mathematicians at UC Berkeley, have called on the system to reinstate standardized testing requirements for science, technology, engineering and mathematics (STEM) applicants, saying that six years of test-free admissions has not reliably assessed readiness and professors are often teaching middle school math to incoming students. UC faculty have observed there has been a 30x spike in students below high school math.
Without standardized testing in admissions, professors say they don’t know whether incoming students can handle college-level math. An open letter, addressed to top UC leaders, asks for SAT or ACT exams to be required beginning in fall 2027 and for STEM faculty to be given formal oversight of readiness standards in their majors.
“We now observe preparation gaps so severe that instructors must reteach middle-school mathematics while simultaneously teaching the material students need for sciences, engineering, economics, and other quantitatively demanding fields,” they warned.
UC gained national attention in May 2020 when regents unanimously voted to suspend SAT and ACT testing requirements and eliminate them entirely by 2025. Board members cited concerns the tests were biased against students of color and those from lower-income families — including students who did not have access to prep courses. At the time, some hailed the vote as a bold and visionary move to expand access and equity.
The real reason to bring back the SAT or ACT standardized testing is that these scores are a better predictor of college performance than high school grades. There are so many K-12 programs throughout the country that there is no way to know whether each of them is doing a good job in teaching basic Math and English skills, or whether student grades are comparable. Standardized testing evens things out. The idea that certain minority groups may be at a disadvantage, and their scores don’t accurately measure acquired skills, is just an excuse to rationalize poor education in K-12.
Yale University Brings Back the SAT and ACT
It was reported on May 27, 2026, that following a recent recommendation from the Presidential Council on Yale College Admissions, the College returned to a pre-pandemic policy mandating SAT or ACT score submissions. The change will affect applicants to the class of 2031. First-year and transfer applicants will be required to submit one or the other in the Fall 2026.
Writing in yaledailynews.com, Leo Nyberg quotes Yale College Dean Pericles Lewis as saying: “SAT and ACT scores are strong predictors of a students’ future Yale academic performance, and, when considered thoughtfully as part of a whole person review, they can help identify well-prepared candidates, especially those from socio-economically disadvantaged backgrounds.”
Other ivy-league schools have followed suit. Brown, Cornell, the University of Pennsylvania, Dartmouth and Harvard all require SAT or ACT scores for undergraduate applicants. Princeton will follow in 2028, while Columbia does not require standardized test score submission.
Harvard University’s Excessive ’A’ Grading
A lot has been written lately about Harvard’s change in its grading system. On May 20, 2026, the faculty voted 458-201 to limit the number of ‘A’ grades in undergraduate classes to 20%, in order to rein in grade inflation. The move is in response to years of data showing that A grades had become so common at elite universities that the grade was losing its ability to differentiate students. It also presents recruiters with the dilemma of how to distinguish one ‘A’ student from another.
Students’ Views
Opponents of the grade change argue that “marginalized students face structural disadvantages before arriving at Harvard, and that limiting top grades would compound rather than correct these inequities. An accompanying open letter described the policy as “blatantly racist” and warned it could heighten competition among students. Critics within the student body frame the reform “as part of a broader pattern of institutional harm toward students with marginalized identities.”
Some students argue the ‘A’ grade limit would disproportionately harm first-generation, low-income, and minority students. Student organizers say the change mirrors racial and socioeconomic hierarchies.
On April 8, 2026, I posted a blog that students at Harvard are protesting the proposed changes because it would increase stress, fuel competition and discourage academic exploration. I wondered, “When did these become bad things?”
U.S. Ranking Globally in the PISA Scores
PISA score assessments that evaluate the educational performance of 15-year-olds globally.
The Programme for International Student Assessment (PISA) measures students’ abilities in reading, mathematics, and science, focusing on how well they can apply their knowledge to real-life situations. Conducted every three years by the OECD, PISA aims to provide insights into educational systems and identify effective teaching strategies across different countries.
The 2026 scores are bad news for U.S. educators. The U.S. kids rank 18th on an aggregate basis, combining math, science and reading skills. These scores raise a red flag concerning whether U.S. kids are adequately prepared to tackle STEM subjects.
In case you are interested, the scores for all countries in the survey can be found here. It’s not surprising to me that kids from six Asian countries do better than U.S. kids. I have taught many Asian kids during my 40+ years of college instruction. They have a work ethic that is second to none. Moreover, kids from six European countries have higher scores as well.
Career Choice of U.S. Kids versus Chinese Kids
These days, I always look to AI to highlight factors relevant to my blogs. I find them to be generally reliable. Here is some of what it says about why U.S. kids increasingly aspire to be influencers, while Chinese youth focus on technology. This trend reflects differing cultural values and societal expectations between the two countries.
Influencer Culture in the US
- A significant portion of American youth, particularly Gen Z, views becoming an influencer as a desirable career. Reports indicate that about 54% of young Americans aspire to this role, seeing it as a modern embodiment of the American dream.
- Influencers are often perceived as having creative freedom and financial success, appealing to the entrepreneurial spirit prevalent in the US.
- In contrast, Chinese youth are more inclined towards traditional career paths in technology and engineering. This is influenced by a strong emphasis on education and stable careers within Chinese culture.
- The Chinese government also promotes STEM fields, leading to a societal preference for careers that contribute to national advancement.
- By age 2, 4 in 10 children have their own tablet (40%).
- By age 4, more than half (58%) of children have their own tablet.
- By age 8, nearly 1 in 4 children have their own cellphone.
- Overall, 51% of children age 8 and younger have their own mobile device (such as a tablet or cellphone).
- Children from lower-income households are spending nearly twice as much time with screens compared to those from higher-income households (3:48 vs. 1:52 hours daily).
- A lack of standardized testing, making comparisons of students from different K-12 programs unreliable.
- Grade inflation that pushes kids through the system even if they lack the necessary skills to go on to the next level of education.
- Lack of a work ethic to handle the more challenging subjects such as in STEM.
- Choice of career goals that navigate U.S. kids to social media—to be influencers—rather than STEM and other challenging subjects.
Are Morals and Ethics the Same?
How to Make Ethical Decisions
Ethics and morals relate to “right” and “wrong” conduct. While they are sometimes used interchangeably, there are differences.
While morals are concerned with principles of right and wrong in general, ethics are related to right and wrong conduct of an individual in a particular situation. Whereas morals are customs established by a group of individuals, ethics defines the character of the individual. While morals represent what a person, group, or society believes people should do, ethics are guiding principles that help the individual or group decide what is good or bad. Morals are expressed in the form of general rules and statements. Ethics are abstract. They need context to decide what is right or wrong.
Distinguishing Between Ethics and Morals
Moral principles include, among others:
- Always tell the truth.
- Do not cheat.
- Do not steal from others.
- Treat others fairly.
- Be kind to others.
- Respect others.
- Truthfulness
- Honesty
- Integrity
- Fairness
- Respect
- Kindness
- Empathy
- Loyalty
- Ethics is not the same as feelings.
- Ethics is not the same as religion.
- Ethics is not the same thing as following the law.
- Ethics is not the same as following culturally accepted norms.
- Ethics is not science.
- Truth vs. Loyalty This dilemma involves choosing between honesty and maintaining loyalty to a person or organization. For example, an employee may discover unethical practices and must decide whether to report them or remain loyal to their employer.
- Individual vs. Community This type focuses on the conflict between personal rights and the welfare of the community. An example is when an individual’s actions may benefit themselves but harm the larger community.
- Short-Term vs. Long-Term Here, the challenge is to balance immediate benefits against future consequences. For instance, a company might choose to cut costs now at the expense of long-term sustainability.
- Justice vs. Mercy This dilemma pits fairness against compassion. A classic scenario is when a judge must decide between enforcing the law strictly or showing leniency based on personal circumstances.
Gen Z Workers Continue to Be Criticized for their Lack of a Work Ethic
Reasons for the Disconnect Between Gen Z and Employers on Workplace Values
There are many surveys done about Gen Z’s beliefs and values that I decided to discuss some of them and share my thoughts. Like the Millennials before them, Gen Z have been criticized for the lack of a work ethic. In the case of Millennials, it was a sense of entitlement that prioritized their needs above those of the employer. In this blog I discuss whether parents are to blame, a failure of education to teach and train students for success in the workplace, employers, or themselves.
A survey by Resume Builder reports that that Gen Z workers are blaming their parents, not employers, the economy, or AI, for being underpaid, passed over, and disciplined at work. This got me thinking, whether Gen Z takes accountability for their actions, or always seek to blame others for what goes wrong in the workplace.
Resume Builder’s Findings
It’s remarkable to me that the blame could be shifted to one’s parents rather than taking personal responsibility. While the failure of parents to instill a work ethic may be true, there are so many other causes that to blame parent’s alone is misplaced. I have two questions: What do Gen Z learn during their education that could have better prepared them to succeed in the workplace? Should colleges and universities instill a work ethic? I believe they should by assigning work that requires the application of critical thinking skills.
The Resume Builder survey of 1,000 U.S. Gen Z workers (ages 18–29) documents what those workers themselves now say about their lack of a work ethic.
- 2 in 3 (67%) Gen Z workers say they’ve been disciplined, underpaid, or passed over because of skills they were never taught at home.
- 6 in 10 (60%) admit their parents coddled them more than prepared them for the workplace.
- 2 in 5 (40%) say they earned less than they should have because they were never taught to negotiate.
- 4 in 5 (80%) are turning to AI and social media to learn basic workplace etiquette, including professional email writing.
- The desire for self-care and personal pleasure; to be happy.
- The desire to express authentic individuality; to have a voice.
- The desire to help people; to make a difference in others’ lives.
- Work should prioritize their well-being, the number one thing Gen Zeers look for in a company. They’re the age group with the highest rates of anxiety, depression, and distress.
- Companies that seek inclusivity and ethical leadership, and have in the wake of social justice reckonings. They challenge the status quo, not because they don’t care, but they may see ways to make their workplaces better and more equitable.
- Gen Z want to feel passionate about their work, uphold their values, and reject what they see as the toxic work mentality.
- Respond better when they are involved in setting the strategy for achieving organizational goals.
- Seek involvement in the decision-making process and valued for their ideas.
- Desire to work for managers sensitive to their needs (i.e., work/life balance).
- Want to receive periodic reviews and learn what shortcomings they may have.
- Want to be paid fairly and been given an equal opportunity for advancement.
- Seek to work for a purpose-driven company that shares their views on the environment and sustainability.
- Care for things outside of work that affect their well-being and want these things built into the ethos of an organization.
Betting on Prediction Markets: A Cautionary Tale
The Human Element of Betting on Prediction Markets
Prediction markets are booming in popularity and facing scrutiny amid reports of market manipulation and insider trading. In the U.S., most betting, be it on prediction markets or on sports apps, is on the outcomes of sporting events. Indeed, betting on sports accounts for between 85% and 90% of the total betting volume on U.S. prediction markets.
Prediction markets are open exchanges online where people wager on future events, from election dates to economic outcomes. Participants can bet on anything from the price of an asset to how many times a public figure will tweet in a day, to the start or end of a war. Each bet shifts the market odds, which in turn reflect what participants collectively believe is most likely to happen.
How the Markets Work
Each Polymarket is a yes/no question, like “Will Putin meet with Zelenskyy by June 30, 2026?”. You buy shares in “yes” or “no” outcomes. Prices reflect crowd-sourced odds and probabilities. For example, if yes is at 30 cents, that’s a 30% chance. Markets resolve based on official results. For multi-outcome events, like “Nobel Peace Prize Winner 2026,” you simply trade on the specific outcome you think will win.
Prediction markets make it easy for people to bet on all kinds of events pertaining to finance, politics, pop culture, and sports. These markets are booming. The Wall Street Journal reported that the total trading volume on the two major prediction market platforms, Polymarket and Kalshi, has soared to $24.2 billion in April 2026, compared to $1.8 billion a year before.
Recently, there have been any number of stories about prediction markets that address the ease of using it, dangers of using it, and whether markets themselves are ethical. One way to make that determination is by applying virtues to the behavior.
Virtue ethics refers to a trait of moral excellence or goodness. It encompasses behaviors and attitudes that reflect high moral standards, such as honesty, integrity, and kindness. Virtues are often seen as essential qualities that contribute to an individual’s character and are valued in various ethical frameworks as foundational principles of a good life. The problem with betting on prediction markets is it challenges virtuous behavior.
How is all of this affecting young people, especially young men, who are the most impacted by the surge in sports betting? Some have become addicted to the activity and are being harmed by turning away from their studies, losing social connectedness, and losing money, in some cases a lot of money. Others participate occasionally, as entertainment or out of a need to feel part of social group. Still others do not know what to think but do have questions.
The Weirdest Bets on Prediction Markets
A story in the Wall Street Journal by Alex Goldenberg describes what could be the most egregious example of betting on prediction markets. Last month, federal prosecutors in New York indicted Master Sgt. Gannon Ken Van Dyke, a special forces soldier at Fort Bragg, N.C., for using his role in the planning of the January raid that captured Nicolás Maduro to win about $410,000 on Polymarket. The Justice Department called it the first criminal case in the U.S. arising from prediction-market wagers. Van Dyke used information about the strike to bet on the event. This misuse of nonpublic information is an example of insider trading.
To show you how crazy these bets can get, last month a Polymarket trader walked away with $21,398 on a $119 bet that the temperature in Paris would exceed a given threshold on a particular day. The bet depended on a single Météo-France weather sensor sitting near the perimeter of Charles de Gaulle Airport on a publicly accessible road. The sensor recorded a spike of 6 degrees Celsius (about 11 degrees Fahrenheit) in 12 minutes before dropping back, and no other station registered the same. A criminal complaint was filed leading to the theory that someone walked up to the sensor with a battery-powered hair dryer.
Here are other bizarre examples that make me shake my head and wonder why we are allowing such betting to be virtually unregulated.
- A user bet $100,000 on Donald Trump acquiring Greenland in 2026.
- Users bet nearly $200,000 in total trading volume on whether Trump would smoke marijuana with Joe Rogan on his podcast, after billionaire and Tesla Motors CEO Elon Musk did so in 2018. Trump appeared on “The Joe Rogan Experience” on October 26, 2025 — without consuming cannabis.
- In October 2025, the Nobel Committee announced that Venezuelan opposition leader Maria Corina Machado had won the Nobel Peace Prize. Hours before that announcement, Polymarket bets on Machado surged dramatically.
- Require prediction markets to monitor on-platform activity and the resolution sources their contracts depend on.
- Federal authorities should develop investigative protocols for manipulation campaigns linked to market positions.
- Congress should clarify how existing fraud and market-manipulation statutes apply to conduct designed to move prediction-market prices.
What I Have Learned from My Lifetime of Experiences in Accounting
Reflecting on My Career as an Accounting Professor, Educator and Researcher
I have been reflecting on my past accomplishments and current views of the state of the accounting profession for a while now, a function of getting older I suppose. In this blog, I will share some of my experiences and thoughts during my lifetime and observations that come with it. I hope it will provide guidance for young accountants entering academia and the accounting profession.
My Interest in Accounting Ethics
My interest in ethics first started about 40 years ago when I took a sabbatical leave from teaching at San Francisco State University. I decided to use my sabbatical to interview some accounting professionals about their most difficult situations and how they were resolved. I was fortunate to find many such professionals with the help of the California Society of CPAs, that facilitated these discussions. The end product of my sabbatical was to develop cases in accounting ethics that could be used to teach ethics to accounting students. My favorite case (“Giles and Regas”) was a story of a young female staff member of a firm who engaged in a dating relationship with someone of higher rank at that firm–the partner-in-charge of the engagement.
I presented my work at the Western Regional Meeting of the American Accounting Association in 1986. As luck would have it, an associate editor from Random House was in the audience and approached me at the conclusion of the program to see if I’d be interested in turning my cases into an accounting ethics casebook, and I jumped at the opportunity. About 40 years ago, my first accounting ethics textbook was published. I revised the book twice and started to become noticed by the academy.
Ethical Obligations and Decision Making: Text and Cases
Shortly thereafter, Random House was acquired by McGraw Hill, my current publisher. The first edition of my textbook with this publisher was in 1996. It was significantly expanded to include text material as well as cases. The issues addressed include both internal reporting, including culture, corporate governance, and whistleblowing, as well as external financial reporting including ethics standards, fraud in financial statements, whistleblowing, earnings management and more. Ethical Obligations and Decision Making: Text and Cases has become the leader in the field of accounting ethics textbooks. More than 100 colleges and universities use it in whole or in part. In the early 2000s, universities expanded accounting ethics education largely because of accounting frauds at Enron, WorldCom and dozens of other companies. Colleges and universities were looking for such a textbook to teach accounting ethics, a subject matter that had been expanding because of the 150-hour educational requirement to be a CPA.
The book has been quite successful and is in its 7th edition, now referred to as 2025 Release because of the advent of the digital product. Over 75% of book sales come from digital adoptions.
150-Hour Requirement
The event that will likely lead to a reduction in standalone accounting ethics courses, unfortunately, is that virtually all states have now created or will create an alternative to the 150-hour requirement to be a CPA, typically by gaining an extra year of practice. The need for the alternative option to become certified has been driven by pipeline limitations in students entering the accounting profession. We learned that students do not want to pay for the extra 30 units, and CPA firms really weren’t requiring the extra education for entry-level positions.
Looking back, virtually all states had required 150-units to be certified; however, business students started navigating to fields such as information technology, information systems and financial management. The reason for the shift has been the added cost of paying for 30-units above the traditional 120 units to earn a bachelor’s degree. Only time will tell whether student interest in accounting as a concentration regains its prominence as the leader in majors for all business programs. I think it will so long as accounting departments develop courses to meet the changing needs of clients and firms develop training programs to meet that need.
Service to Academe
I love writing papers about ethical issues facing business and accounting. My first publication, which carved out a reputation for me as an ethics expert, was “Virtue Ethics and Accounting Education” published in Issues in Accounting Education in 1995. That paper led to a stream of published papers by academics on the intersection between character, virtue ethics, accounting education, and accounting practice.
Upon becoming a senior at 65-years-of age, I started to think of retirement. I have accomplished a great deal during my academic career and really do not have a lot to prove. Still, the challenge of writing and publishing papers keeps me going. I have published over 40 papers in the field of ethics. I have been fortunate to have been interviewed and quoted in many stories about accounting ethics, business ethics, and even political ethics. I have developed a successful blog under the name “Ethics Sage.” My blog has been well received and is a joy to write.
I was fortunate to teach at Cal Poly San Luis Obispo from 2006-2016. Cal Poly is an exceptional university, known for its education in engineering and architecture. Based on my experiences, I would add business and accounting to the areas where a stand-out education can inform professional practice. I love their motto “Learn by Doing.” By the way, Victor Glover is the Cal Poly graduate who became a NASA astronaut. He graduated in 1999 with a degree in General Engineering and has made significant contributions to space exploration, including piloting the recent Artemis II mission to the moon.
Post retirement, I have turned my attention to service. The field of accounting education has been good to me. I decided to give back to accounting education and increase my activities with the Public Interest, Ethics and Sustainability (PIES) Section of the American Accounting Association (AAA). The Section has supported my work over the years, and I am deeply in debt to the AAA for that. To show my thankfulness in a tangible way, I have funded the “Excellence in Accounting Ethics Education” Award that is given out annually by the PIES.
The PIES has also recognized my work. I received the “Accounting Exemplar” award in 2015 and the “Distinguished Service” Award in 2024.
Reflections on the Accounting Profession
Accounting is an honorable profession, being relied upon by clients for a myriad of professional services and for being trustworthy. However, it’s become somewhat fashionable to criticize the profession for a lack of independence and allowing clients to call the shots rather than the accounting professional. This occurs, in part, because of the competition for professional services.
A Gallup Poll released on May 3, 2026, shows that accountants rank seventh out of 21 professions in honesty and ethics, trailing all healthcare professions and teachers, and clustering near other mid-tier trust occupations.
There has been a decrease in the ranking and overall percentage rating on ethics and honesty recently. I attribute this to the fact that professional services are expanding more rapidly than accounting education and training. It can’t keep up. Mistakes are made. Add to that the pressure imposed by CFOs and CEOs who seek maximum profits, and you have the perfect storm leading to the decline. One example is that unique entities have been established during the past dozen years, such as special purpose acquisitions (SPAs). These are companies created specifically to raise capital through an IPO for the purpose of acquiring an existing company. The transactions can be complex, and it could be that firms have not adequately trained their staff to handle the technical needs, judgment calls, and making sure the independence standard is met. Then there are the challenges that result from expansions in state-of-the-art fields which interact with providing professional services, such as technology and crypto currency transactions. These changes have, in part, created a talent gap between the knowledge and training needed to handle emerging clients’ needs and the abilities of accounting graduates and professionals, especially in their early years. In short, accounting education and practice has not caught up with the knowledge and training needed to handle such transactions.
Conclusions
I believe that accounting firms will close the gap between learning and practice over time. They have too much to lose by not doing so. This requires, among other things, for academe to update their curricula to meet the demands of a changing workplace. As I have observed before in my blogs, change in the academy occurs slowly.
I am concerned about the decline in ethics in all fields of practice, whether business ethics, accounting ethics, government ethics, political ethics and the like. This decline in ethics has infected all segments of society, and accounting is no different.
Finally, accounting students need to commit themselves to ethical behavior so that they can help to change the culture of those firms that all-too-often give in to client pressure. Accounting professionals must act in the public interest, and that means to be ethical and honest in everything they do so that clients can continue to call on them for current and future service needs.
Blog posted by Steven Mintz, PhD, on May 4, 2026. Visit Steve’s website to learn more about his activities.
What Can the Dignity Index Do for You?
Dignity vs Civility: Is there a Difference?
The Dignity Index® is a tool designed to score how political and public language promotes dignity or expresses contempt. It was created to address the growing problem of divisive speech in politics and public discourse, aiming to make “dignity” a measurable standard in communication.
Purpose and Philosophy
The following discussion is taken from the Dignity Index website.
The Dignity Index is based on the belief that words have political power — language rooted in contempt divides, while language rooted in dignity can unite. It was developed in partnership with behavioral scientists, political leaders, and communication experts, and tested by researchers at the University of Utah, the Kem C. Gardner Policy Institute, and the Hinckley Institute of Politics. Here is the way it works.
How It Works
Is the Dignity Index the Same as Civility?
Now that I have explained what the Dignity Index is, its purpose and application, and why it matters, it’s time for me to express my own views. I’ve blogged many times before about the lost art of civility in America. One reason is we tend not to think about it as a moral core value; instead, a behavioral characteristic such as kindness, empathy and compassion, which may differ for each individual. I’m not sure we need another tool to evaluate what should be common sense—to act with dignity in communication with others; to treat others respectfully.
I may be wrong—at least in view of the way AI explains the difference.
AI says that the “Dignity Index and civility are related concepts but differ in focus and application.”
Scope and Purpose
- Scale: 1 to 8 points.
- Lower scores (1–4): Contempt, mockery, dismissiveness, stereotyping — language that dehumanizes or divides.
- Mid-range (5–6): Disagreement with respect, recognition of others’ humanity.
- Higher scores (7–8): Curiosity, respect — treating others with full dignity even when disagreeing.
- Focus: On the words and tone, not the person speaking, to ensure fairness and objectivity.
- Increases polarization and division.
- Prevents compromise and problem-solving.
- Damages trust and can contribute to violence.
- Hold leaders accountable for how they speak.
- Improve public discourse in politics, business, and everyday life.
- Foster respectful, solutions-focused dialogue.
Is the Dignity Index the Same as Civility?
Now that I have explained what the Dignity Index is, its purpose and application, and why it matters, it’s time for me to express my own views. I’ve blogged many times before about the lost art of civility in America. One reason is we tend not to think about it as a moral core value; instead, a behavioral characteristic such as kindness, empathy and compassion, which may differ for each individual. I’m not sure we need another tool to evaluate what should be common sense—to act with dignity in communication with others; to treat others respectfully.
I may be wrong—at least in view of the way AI explains the difference.
AI says that the “Dignity Index and civility are related concepts but differ in focus and application.”
Scope and Purpose
-
- Dignity Index: This is a specific tool that measures political speech on an eight-point scale, assessing how language promotes dignity or expresses contempt. It categorizes speech from level 1 (most contemptuous) to level 8 (most dignified).
- Civility: Generally, refers to polite and respectful behavior in discourse. It encompasses a broader range of interactions beyond political speech, focusing on maintaining decorum and respect in various contexts. There is no measurement system.
- Dignity Index: Aims to foster civil discourse by providing a framework for evaluating and improving political communication.
- Civility: Seeks to promote respectful interactions in all areas of life, not just politics, and can sometimes prioritize politeness over truth.
Excellence in Accounting Ethics Education Award for 2026
Outstanding Educators Are Recipients of the Excellence in Accounting Ethics Education Award
The Public Interest, Ethics and Sustainability Section of the American Accounting Association has selected three academics for its 2026 Award, “Excellence in Accounting Ethics Education” including Scott C. Jackson from the University of Nevada, Las Vegas, Paul E. Ordyna, from the University of Missouri-St. Louis, and Srinivasan C. Ragothaman from the University of South Dakota. They published a paper in the November 2025 Issues in Accounting Education titled “A COVID-19-Related Fraud at Applied BioSciences Corp. What Are the Lessons?” The case presents a real-world Covid-19 fraud scheme that enables students to apply ethical reasoning, analyze fraud risks, and critically assess corporate governance failures. The case develops a useful approach to ethics education for other potential public health outbreaks like the COVID Variant Called ‘Cicada’ or the measles. Moreover, all of us, including our students, have lived through Covid and should find the case a good platform to evaluate social responsibility and what is in the public interest.
Find out more about the award by contacting Steven Mintz at smintz@calpoly.edu.
Posted April 21, 2026, by Steven Mintz, PhD, Professor Emeritus from Cal Poly San Luis Obispo. Find out more about Steve’s activities by visiting his website.
Do Businesses Need an Ethics Judgment Rule?
Fordham Professor Explores Whether Companies Are Allowed to Put Ethics First
I was fortunate to have taught an online Accounting Ethics class for Fordham University a few years ago. Since then, I’ve kept up with what’s happening on campus and in the community. Last week I received the Fordham Now newsletter online. The topic discussed is of great interest to me as an ethicist. It is: “Are Companies Allowed to Put Ethics First?” When I read the title, it made me think that ethics should always go first.
The article interviews Santiago Mejia, PhD, a professor of law and ethics in the Gabelli School of Business at Fordham, who wrote a paper that was published in the Business Ethics Quarterly. He prefaces his remarks by saying that companies may be foregoing profits to do the right thing, which could bring lawsuits from shareholders who expect the companies they invest in to put profits above all else. Professor Mejia raises an interesting question that addresses the tradeoff between ethics and profits, which is should a legal rule be adopted to protect executives who cite ethics when doing things that could hurt profits.
What is the Business Judgment Rule?
The Business Judgment Rule is a legal doctrine that helps to guard a corporation’s board of directors against frivolous legal allegations about the way it conducts business. A legal staple in common law countries, the rule states that boards are presumed to act in “good faith”—that is, within the fiduciary standards of loyalty, prudence, and care directors owe to stakeholders. Absent evidence that the board has blatantly violated some rule of conduct, the courts will not review or question its decisions.
Fiduciary standards include the “duty of care” and the “duty of loyalty.” The first is an obligation to act on an informed basis. The second requires directors to put the interests of the corporation over their own self-interest or the interests of others. That’s the problem with the Business Judgment Rule as it now stands. The problem with loyalty is it could be used to justify actions that might harm others, such as not disclosing a negative event that occurred in a company because the CEO said so.
What Should the Business Judgment Rule Look like?
I wondered, what should the business judgment rule look like? According to Mejia, there would be an ethics judgment rule. This got my attention. For years, I have been teaching the standard philosophical reasoning methods, including utilitarianism, rights, and justice as guides to ethical decision making. I was interested to learn that his research led him to believe that pursuing ethical initiatives under the guise of profit was a way to justify the decisions. In other words, it could be used as a rationalization for an ethical action. Ethics is much more.
I’ve always told my students that they should make ethical decisions, be a good person, and treat others the way they wish to be treated, not because it could lead to profit but because it is the right way to behave. The next question is what I mean by “right way.” This gets us back to the philosophical reasoning methods. However, the reason for being ethical is simpler than that. The answer lies in virtuous behavior.
Virtue is not always viewed by philosophers as a specific method of ethical reasoning, but it does have an innate value in contemplating the right thing to do. I like it as a method of reasoning because it is “character based.” If a person can lead their life in accordance with characteristic traits of behavior such as honesty, integrity, empathy, compassion and the like, it will give them a good feeling and maximize happiness. What could be a better motivator than happiness—which could be linked to gaining meaning in life or self-actualization.
So, my idea is to make “moral fortitude” the business judgment rule.
The Importance of Moral Fortitude
One reason I like moral fortitude as the ethics judgment rule is to speaks directly to the idea of whistleblowing and it can be applied to all endeavors—both personal and professional. We need more whistleblowers in society, especially in business and government. A good example is what happened to Congressman Eric Swalwell last week. Swalwell has now been accused by multiple women of sexual assault; at least two others claim he harassed them with unwanted come-ons and explicit photos. The women were reluctant to blow the whistle at first but ultimately did so. In other words, they had the courage of their convictions and acted with fortitude, informed by integrity, to call out Swalwell.
Aristotle emphasized fortitude as a virtue that helps individuals to confront challenges and difficulties with courage. It is part of his broader ethical framework, which emphasizes the importance of moral character and virtues in achieving a well-lived life. Saint Thomas Aquinas included fortitude among the four cardinal virtues in his works, discussing its importance in moral decision-making.
The bottom line is I agree with Professor Melia that: “Sometimes what ethics requires is not doing well but doing right.” My only concern is there appears to be a qualification in saying “sometimes.” It could be taken to mean that each individual might use their individual perspectives to decide what is ethical on a case-by-case basis. I agree with him if each individual comes by their decisions in an ethical manner—and with fortitude as explained above. Nevertheless, kudos go to Professor Mejia and Fordham for such a thoughtful piece.
Blog posted by Steven Mintz, PhD, professor emeritus from Cal Poly San Luis Obispo, on April 20, 2026. Learn more about Steve’s activities by visiting his website.
The Cancel Culture and Eric Swalwell
Should We Cancel the Cancel Culture?
I have previously blogged about the cancel culture including its good and bad points. We haven’t heard a lot about it for quite a while, so I have decided to discuss it once again in the context of what just happened to Congressman Eric Swalwell (D-California). In case you haven’t heard, Swalwell withdrew from the nomination for governor of California yesterday after a growing chorus from others in Congress to do just that. The allegations of sexual abuse from at least four women were more than his candidacy could tolerate. By withdrawing, he may create a boost for another Democrat to come in first or second in the California gubernatorial race. In California, the top two finishes from the primary have a runoff to see who will serve as the next governor of California. It doesn’t matter if the top two are from the same party, which is quite unusual as these runoffs go.
Two women who allege they were preyed on by the disgraced Swalwell say they decided to break their silence in a bid to prevent him from spending the next few decades harming “future victims.” The accusers, Ally Sammarco and Annika Albrecht, told CBS News they felt partly vindicated after Swalwell abruptly resigned from Congress on Monday and dropped out of California’s gubernatorial race following the wave of sexual assault and rape claims leveled against him. “He thought he was untouchable. He acted with total impunity. He never thought that the consequences of his actions would follow him,” Sammarco said.
As I wrote in my blog, cancelling someone is a manifestation of holding others accountable for their behaviors. Assuming the allegations are true, it is appropriate that Swalwell was forced to pull out of the race. The fact that there were multiple allegations against him, gives credence to the point of view that he is guilty as charged.
What is the Cancel Culture
The cancel culture is used to call out behaviors and actions of individuals and corporations that convey opinions or feelings which are objectionable to the perceived public good. The cancel culture is when someone or some organization is ostracized by another individual or group/community for something they said or done. It has become a social issue because some people allow it to affect what they say or do…which may not (or should not) be cancelable. A good example, worthy of consideration is that of Adam Smith.
Back in 2012, Chick-fil-A’s president at the time, Dan Cathy, spoke out against gay marriage and a fierce backlash ensued. The then Governor of Arkansas, Mike Huckabee, called for a Chick fil A Appreciation Day because he was “incensed at the vitriolic assaults” against the fast-food chain after Cathy’s remarks. Supporters of the fast-food company lined up to order from Chick-fil-A in a show of solidarity with Cathy, protesters decided to do the opposite — order nothing but free cups of water and voice their disagreement to the employees.
In Tucson, Arizona, Adam Smith decided to order a free cup of water himself. Smith, a successful young business executive, had recently witnessed the struggle his brother-in-law experienced coming out. He felt righteous joining in on the protest, and he decided to film the whole exchange and post it to YouTube. In the video, Smith is seen telling the drive-thru attendant, “I don’t know how you live with yourself and work here. I don’t understand it. This is a horrible corporation with horrible values.”
I can understand what protesters did and why. We have freedom of speech after all. However, I think Smith crossed the line when he admonished the drive-thru attendant. There is no way to justify such behavior.
The underlying cause of such behavior is the lack of tolerance for points of view different from our own. In today’s society, if you don’t agree with the particular point of view, you risk being cancelled. In other words, it’s “my way or the highway,” which signifies an ultimatum. It implies that we must follow a speaker’s preferences. It’s a non-negotiable point of view, often used by someone in an authority position. Their view is the only one acceptable.
Promoting Accountability
Cancelling someone can promote accountability for one’s actions. When people are accountable, and answer for their actions, it builds trust.
Accountability isn’t about being harsh. It’s about being fair. When celebrities break the law and face no or minimal consequences, it:
- Sends the wrong message to society
- Encourages a sense of immunity for the rich and famous
- Weakens the public’s faith in justice.
Should Harvard University Limit ‘A’ Grades?
Measuring Academic Achievement May Be Easier Said Than Done
I’ve been reading a lot about Harvard controlling the number of students who are awarded an ‘A’ grade. It seems too many are receiving that grade. A proposed cap on grading has students up in arms. Harvard’s faculty will vote next week on a proposal to cap the number of A’s per course, which now make up more than half of undergraduate grades. The plan also suggests getting rid of GPA as an internal metric, instead using percentile rank to calculate honors like cum laude recognition.
I read in the Wall Street Journal that students are protesting the proposed changes because it would increase stress, fuel competition and discourage academic exploration. I’ve got to ask: When did these become bad things?
An editorial in the Harvard Crimson, the student newspaper, referred to the cap as a “crude” quota. A survey conducted by Harvard’s undergrad student government found that about 94% of students oppose the policy.
The proposal would cap the number of A’s per course at 20%, plus an additional four A’s to account for smaller courses with more variability. The cap would reset ‘A’ grading at Harvard to 2011 levels, says the proposal which applies to the undergrad college.
It seems that the catalyst for the change is a report that about 60% of the grades were A’s in the 2024-2025 school year, up from about 25% in 2005-06.
Arguments for Capping ‘A’ Grades
Harvard administrators and some faculty suggest that the goal is to fix the culture and challenge students to work harder in their coursework. The belief in some quarters is that Harvard’s reputation may be suffering because of grade inflation. After all, how is an employer to know whether the ‘A’ grades are truly earned, which could be indicative of a strong work ethic, or assigned by professors who want students to pump up their evaluations of instructors or avoid the inevitable stress students feel when not assigned an ‘A’ grade.
Arguments for Not Capping ‘A’ Grades
It could be that Harvard students are so smart that they earn the ‘A’ grade. There really is no way to know for sure. Perhaps the old adage applies here: “The Proof in the Pudding is in the Eating.” In other words, Harvard students will graduate, get good jobs, and then we’ll see whether they truly earned the ‘A’ grade, although it’s not an exact science. Personally, I don’t go along with this line of thinking. The reason is there are a lot of factors that go into whether a graduate will be successful in the workplace and grade performance is only one.
Joshua Greene, a Harvard psychology professor and member of the committee behind the proposal believes the current system discourages students from exploring unfamiliar subjects [where it may be more difficult to earn an ‘A’ grade]. Moreover, at Harvard, where A’s are so common, anything less is stigmatizing. It could affect students’ mental health.
I suppose another factor could be the psychological effect of earning a grade less than ‘A.’ How will it affect the psyche of such a student?
Student Views
One student leader says student opposition to the cap isn’t just about undergrads complaining about grades getting harder. He says students are more interested in addressing course engagement and rigor, especially in so-called “gems.” Gems are slang for classes that offer a light workload and lenient grading. We used to call them a “gut” or “fluff” course.
Administrators have responded to the backlash by tweaking the plan. Earlier this week, Dean of Undergraduate Education Amanda Claybaugh announced a one-year delay, moving the earliest possible rollout to fall 2027, and introduced a new “SAT+” grade option designed to give instructors additional flexibility.
Turning to A- Grades
The proposal would not limit A-minuses; only A’s. Of course, this will make A minuses more common and, perhaps, less subject to ridicule by ‘A’ students. Greene is quoted as saying in defense of the A-: “We want to liberate students from the tyranny of the 4.0 and make them free to explore. We want to put the ‘us’ back in A minus.
Harvard may be making some progress already. The number of A’s last fall were 53.4% down from 60.2% in the prior academic year.
Trump is Everywhere
Harvard’s academic programs are under additional scrutiny because of the Trump administration’s investigations into the university and broader efforts to remake higher education in the U.S. Federal officials have asked universities to sign a “compact” that includes commitments to “grade integrity” and the use of “defensible standards” when evaluating students. No one knows where this is going, which is true of most things that Trump gets involved in.
My View
The talk about capping any grade is anathema to me. I taught at the university level for over 40 years. In some years, the students in my classes earned A’s at a higher rate than in other years. I graded them based on performance, not some contrived grading standards.
I can’t close this blog without addressing ethics. You probably remember Operation Varsity Blues where parents of rich kids made payoffs to get their kids into certain prestigious college. Back in 2019, five Harvard alumni were arrested and charged for conspiracy to commit mail and wire fraud in a nationwide scheme to fraudulently secure admission for their children to top universities through millions of dollars in bribes and falsified standardized test answers. Another alumnus, who allegedly took standardized tests like the SAT and ACT in place of college applicants, was charged with conspiracy to commit money laundering and conspiracy to commit mail and wire fraud. It would be interesting to know how many A’s they received from Harvard.
I think we have to remember that one indicator of a potentially valuable students ready to graduate and go into the working world is work ethic. By giving out so many A’s, Harvard is stifling that measurement indicator.
Blog posted by Steven Mintz, Ph. D, professor emeritus from Cal Poly San Luis Obispo, on April 9, 2026. Find out more about Steve’s activities on his website: