In his view business schools themselves contributed to the 2008 crisis by teaching not too much but rather too little financials, he writes in the Financial Times. Instead of regarding finance as a central part of any business like leadership, innovation or strategy, far too many schools saw it as a narrow technical subject. This unsatisfying approach to finance had serious consequences: “In particular, a lack of finance knowledge made it harder for non-financial managers and independent board members to prevent the numerous corporate and financial collapses before and during the crisis.“ Unfortunately, six years on, the situation has not improved. Business schools urgently need to start educating a new generation of more financially literate executives, but very few are doing so. This means far too many managers are still frighteningly unaware of the financial consequences of their decisions.

Even experienced executives with profit-and-loss responsibility often cannot distinguish profit from cash. And the majority of executives from junior level to the C-suite do not know their company’s cost of capital – as revealed by Fernandes' surveys amongst managers. “Business schools must emphasise that financial literacy is a requirement for managers at all levels and not just for chief financial officers, accountants and treasurers. And this process does not just involve teaching basic concepts such as accounting ratios and terminology.“ Business schools can really add value by getting executives to apply these concepts to their daily work to make them understanding the financial impact of their decisions.

http://www.ft.com/intl/cms/s/2/eac4fa8a-c0c5-11e3-bd6b-00144feabdc0.html#axzz3Az09uoVS