Degrees of dishonour

The university grovelled in part:

Through the Pratt Foundation established in 1978, the Pratt family is among Australia’s most generous business families, giving directly and indirectly over $10 million each year to charity and other causes. Richard Pratt’s support for the University through the Pratt Foundation includes generous gifts to the Union Theatre redevelopment project (and the) establishment of the Pratt Family Chair in the Melbourne Business School.

Mr Pratt is (or was) associated with a wide array of organisations through his many activities including: Foundation Chancellor of Swinburne University of Technology, President of the Victorian Arts Centre Trust, Chairman of the Australia Foundation for Culture and Humanities, Chairman of the Australian Business Arts Foundation Chairman Mental Health Research Institute of Victoria, Chairman of the Finance Committee of the Australian United States Coral Sea Commemorative Council, and Breakthrough Appeal Chairman for the McFarlane Burnet Centre for Medical Research. He is also a significant donor to the Centre for Palliative Care Education, the Ian Potter Gallery, the Department of Fine Arts and Aboriginal health.

All noble endeavours, no doubt about that.

Some organisations have honoured him academically and others merely banked his handsome cheques. The University of Melbourne is guilty of the former, while its offshoot, the Melbourne Business School (arguably Australia’s second best b-school), is guilty of the latter sin. A good question to ask is: have the reputations of these two institutions suffered from their association with Mr Pratt?

The University of Melbourne Statutes allow for awards to be revoked if obtained by fraud, where “fraud” is defined as either an untrue or misleading certification by a candidate or appropriating the ideas or work of another person and passing them off as one's own.

A glance at the university’s web site indicates that there is no provision for revoking a degree where the recipient through his actions has impacted on the reputation of the university. How convenient indeed, for both the university and the recipient of an award.

So what exactly is a university’s reputation? And how have other institutions coped when an honorary degree recipient has done something that has impacted negatively on the university’s reputation?

Managing reputation is an essential responsibility of the governing board (for a company) or for the council (in the case of a university). The board or council must take into account all stakeholders, whose perception of the organisation will determine its reputation.

In many cases, when crises loom, organisations are either blind to the possible damage that could be done to its reputation, or the organisation believes that it can ride out the crisis.

Let’s look at a couple of examples.

In late May 2006, Enron founder Mr Kenneth Lay was found guilty of conspiracy and fraud in the mother of all corporate fraud cases.