Monday, September 14, 2009

On PhD Degrees and Honesty in Business

I found in my emails this morning, an occasional email from David Webb, self-appointed guardian of corporate governance in Hong Kong. As some may know, Mr. Webb, formerly a member of the board of the HK Stock Exchange runs his eponymous which exists to point out shortcomings in HK corporate governance.

His email this morning announced that the newly-appointed CEO of HK-listed Neo-Neon Holdings Ltd, Mr. Tseng Jinsui, had, at best, misrepresented his educational qualifications. Mr. Tseng claims to have earned a doctorate at Edendale University in the UK. The only problem is that no one, not even the South China Morning Post, seems able to find proof that Edendale University exists, or if it does, that it offers an accredited degree.

Based my own very unscientific survey, I have learned that in China there are doctorates, and then there are Doctorates. Some are real, and some are not, and this fact is pretty much an open secret.

Many high level political and business officials in China claim to have doctorates, and indeed, some of them do. But many others somehow managed to obtain doctorates with only a six-month gap on their CVs during which the doctorate was supposedly earned. They must either be super-brilliant, or their education was somehow lacking.

As a real PhD candidate from a Chinese university put it to me: "Some of these doctorates held by senior officials are earned by attending a few seminars and writing a paper. Everyone knows they aren't real. But there is pressure for leaders to have an advanced degree, so those who hope for promotion have to attend one of these programs."

None of this is to say that Mr. Tseng of Neo-Neon is an incapable leader. He appears to have been promoted from within the organization, so one could reasonably assume that he knows the business well.

Why the fake degree then?

This is something that baffles me. Why, in an age in which pretty much any "fact" can be quickly researched on anyone's mobile phone, would people risk damaging their credibility by making false claims, or paying for degrees without having to do any actual learning?

On the mainland, there seems to be a pretty good explanation.

One of my interviewees in Shanghai, talking about a completely different subject, explained this phenomenon. "Many of you foreigners think of China as the model Confucian society full of humble, hard-working people. What you don't know is that the Mao years instilled in many Chinese this need to brag and exaggerate -- to convince people they have achieved something that they have not really achieved. This tendency is hard for people to change, and we still see it often among the auto companies (when talking of their achievements in electric vehicle technology)".

Though the context was electric vehicles, I wonder if this explains the tendency of some to put degrees on their CVs that were either never earned, or earned over only a few months.

As to why this happens so frequently in Hong Kong, I am still at a loss.

Having a PhD does not make one smart. All it means is that you have the tenacity to stick out a long program of learning and research that offers little hope of a financial payoff. Surely a long history of successes in industry are worth more than that when it comes to demonstrating one's ability to run a company.