The meetings began in 1981. Four ethics professors at the Harvard Business School and Dean John H. McArthur joined Securities and Exchange Commission Chairman John S.R. Shad to discuss their ethics research over lunch. A B School scholar recalls hearing reports that, year after year, Shad "hadn't been sufficiently convinced that the school was serious about [ethics]."

This year Shad, a B-School alumnus, was convinced.

At a gala B-School gathering in New York City, McArthur announced in March that Harvard would be setting up a $30 million ethics endowment. Shad had provided two-thirds of the grant.

The gift from Shad, who is stepping down to become Ambassador to the Netherlands, comes at a time of unprecedented interest in classroom ethics stimulated by the recent Wall Street insider trading scandal. The SEC Chairman's donation coincides with President Bok's efforts announced last year to create the university-wide ethics program now run by Kennedy School Professor Dennis Thompson.

"The Harvard Business School is the preeminent institution in the field and it can and should lead by example," Shad said upon announcing his grant. "In effect, we're starting at the top of the pyramid--with the outstanding faculty and student of the Harvard Business School--but this experience will ultimately permeate the pyramid's much broader base."

Shad's purported prior skepticism regarding Harvard's commitment to the field of ethics is shared by many financial experts across the country.

"I do think it is ironic that the gift went to an institution that historically had done so little in the field of business ethics," says Manuel Velasquez, chairman of the Society for Business Ethics and the Director of the Center for Applied Ethics at Santa Clara University.

"I hope it will set the pace for a new wave of research and interest. Frankly, Harvard hasn't shown much of a commitment to business ethics in its business program at all," says Thomas J. Donaldson, Wirtenberger Professor of Ethics at Loyola University of Chicago. "I'm surprised" Harvard received the money, he says.

But R. Edward Freeman, a visiting professor at the Darden Business School at University of Virginia, says he was "not surprised," because of the Business School's prominence. Freemen works at the 20-year-old Center for Applied Ethics at Darden.

"Harvard is a place you love to hate, but you really pay attention to what Harvard does and you hope it would take advantage of this opportunity. I'm very disappointed that it hasn't done more," says Norman E. Bowie, a philosophy professor and director of the Center for the Study of Values at the University of Delaware.

Many scholars have criticized the B-School for showing relatively little institutional commitment to the field of business ethics. They point to the absence of any tenured ethics professors in its MBA program and required courses in the discipline. But others defend Harvard's record saying the University has kept pace with its rivals in its teaching of ethics, and addresses the issue regularly, although informally:

Most agree, however, that the new endowment will subject the B-School to widespread scrutiny, especially from rival business schools.

"Harvard has a tremendous responsibility now to set a leadership role. A required course in business ethics is an important first step. I am not saying one ought to not work ethics into other courses--I think we ought to have ethics interwoven into other business courses," says W. Michael Hoffman, director of the Center for Business Ethics at Bentley College in Waltham, Mass.

At the time of gift's announcement, McArthur said Harvard would definitely not be introducing a required ethics course into its MBA program. The changes would be more comprehensive, he added.

"I was somewhat taken aback that [McArthur] would say so bluntly that they had already made a decision not to require a course in business ethics. That seems a bit premature to say such a thing right on the heels of getting $30 million," says Hoffman. "It did not show a great deal of sensitivity and commitment to the responsibility."