February 16, 2005

By Dan Heuchert

Spend some time in R. Edward Freeman’s well-cluttered office, and you likely unearth several clues as to why the State Council of Higher Education for Virginia presented him with a 2005 Outstanding Faculty Award on Tuesday.

Leaning against a bookshelf is an electric guitar, which Freeman, the Elis and Signe Olsson Professor of Business Administration, co-director of the Olsson Center for Applied Ethics and professor of religious ethics, used to play in “Blues Jam,” a 16-piece ensemble made up of faculty, students and spouses that frequently entertains at Darden School events. These days, Freeman plays keyboard instead — for the first time since grade school — because there are too many guitarists, he said. He’s in it for the fun, not the ego boost.

On a table, there’s a picture of Freeman amongst a group of smiling Fortune 500 CEOs. His presence at Darden was one of the factors that led the Business Roundtable, a group of 160 chief executive officers, to establish its Institute for Corporate Ethics at U.Va. and install Freeman as its academic director, said Dean Krehmeyer, the institute’s executive director, himself a former Freeman student.

This past June, in one of the institute’s first programs, Freeman led a one-day seminar for CEOs. “I think there are very, very few instances where a group of 11 chief executives, all from Fortune 500 companies, spends an entire day to talk amongst themselves about issues of corporate ethics,” Krehmeyer said. “For Ed to be equally effective in front of chief executives as he is in front of MBA students is truly unique.”

Perhaps Freeman’s appeal is grounded in his unflinching resolve to be himself.
Freeman — reclining in the middle of his office dressed in a black T-shirt and suit pants, a wild mane of hair and beard ringing his round face — says he hasn’t shaved in a decade. And “I don’t intend to,” he said, hinting at a bit of eccentricity in the expectedly buttoned-down Darden world. Freeman came to business from the ranks of liberal arts; his Ph.D. is in philosophy, with a hint of mathematics.

When he finished his doctorate, a dissertation committee member suggested he apply to Wharton. “I said, ‘What’s that?’” he recalled. Once he discovered that the University of Pennsylvania’s renowned business school is in Philadelphia, then the residence of his girlfriend and future wife, Maureen, he warmed up to the idea.
“I went off to Wharton essentially for love,” he said, adding, “I am neither fish nor fowl. I’m not really a philosopher, and not really a business school professor. I’m OK with that.”

As he modestly deflected questions about winning the SCHEV award, a visitor briefly interrupted. She and Freeman were preparing to fly to Florida in an hour where they would lead a seminar for local school officials, part of the Darden-Curry Partnership for Leaders in Education.

They went over the materials they were going to need for the presentation. Freeman said he had the playing cards but thought it would be inappropriate to take the guns and cigarettes into a school setting. They still needed to locate a teacup and a lighter, but they could probably track down a coffee mug once in Florida.

“It’s for an improvisational exercise I do with my theater course,” titled “Leadership, Ethics and Theater,” Freeman explained. “They have to write, produce and do a Checkovian play the very next day, under impossible constraints.

“Theater is really about pure collaboration. All I’ve got is the line you give me. The students really learn about collaboration and working together.”

Among the huge variety of courses Freeman teaches are those in which he uses theater, literature and creative writing as ways to discuss business ethics. His goal is to start a discussion, then gracefully slip into the background as his students wrestle with the issues.

“Sometimes Ed’s silence is his best teaching tool,” wrote former Darden student Bidhan L. Parmar, now a research assistant in Darden dean Robert Harris’s office, in support of the SCHEV nomination. “Even with all of Ed’s talent as a teacher and his charisma, I’ve noticed that when the light bulb finally goes on, he’s usually sitting quietly among the group. ... He has an acute sense of when to step in to guide the conversation, by asking questions and clarifying claims, and when to step back and let things happen and let students learn for themselves.

“He has said on many occasions that, ‘what makes a good class is the same thing that makes a good play; it’s about the interaction between a talented group of people, not about any one person.’”

What they learn has great practical value, Kirsten Martin said. She earned an MBA from Darden, then worked for a telecommunications firm in Washington before returning to study for a doctorate under Freeman.

While in the business world, “I was constantly e-mailing him about little dilemmas I was in,” she said. “He would write back and say, ‘Can I use this?’”

She came to understand that ethical decisions don’t often come with red flags. Nevertheless, “All decisions are moral decisions,” she said. “They all have moral reasoning going into them or moral implications coming out of them.”

Lest one think that Freeman is all classroom and no scholarship, know that he is regarded in business circles as the father of “stakeholder theory,” Krehmeyer said.
Freeman explains: “Business is about how to create value for customers, employees, communities and stockholders. You’ve got to keep all of them going in the same direction; you have to create value for all of them.” He added, modestly, “The idea has been around a long time. I just wrote about where it came from.”

His 1985 book, “Strategic Management: A Stakeholder Approach,” is far from rehash, said Darden colleague Andy Wicks, another former Freeman student.

“Ed is the pioneer of stakeholder theory, at least as it is discussed today,” he said. “He was the first one to write it down and connect all the strains of thinking together and make it fit as theory and strategy.”

Freeman’s approach was revolutionary, not evolutionary, Wicks said.

“Ed is the architect, the designer who helps see the world differently,” he said, “and that’s an amazing gift.”