The Ethical Leader’s Decision Tree

You have recently landed your dream job working for a hedge fund that invests in domestic and international firms on behalf of college endowments, public and private pension funds, and wealthy individuals. You just learned of an opportunity to invest in a Dutch oil company that was granted exclusive drilling rights in an African country with a repressive regime that condones human slavery. This investment offers above-market returns not otherwise available. You know that the proceeds from the drilling will help keep this regime in place but you also know that the regime plans to spend part of the proceeds building badly needed schools and hospitals. Further assume, unrealistically, that no one will ever know that you invested in this company because it is buried under a number of private holding companies. Finally, assume that if your fund does not invest then the Chinese firm that has been aggressively buying oil reserves and investing in companies drilling in Africa will almost certainly invest. Would you invest or not? Does it matter whether you are investing for the hedge fund or your own personal account? Please join Constance Bagley, Senior Research Scholar at Yale Law School and former professor at Yale School of Management and Harvard Business School, in an interactive discussion of this hypothetical and the ethical considerations underlying it.