by Gael O’Brien

Last week in Abu Dhabi, when former U.S. President William Jefferson Clinton gave the commencement address to the first graduating class of the New York University Abu Dhabi (NYUAD) campus, he cited criticism in the U.S. about his coming. A recent New York Times investigation exposed ongoing labor and human rights abuses of the foreign migrant workers who had built the campus. This was contrary to a code of conduct  New York University (NYU)  had pledged in 2009 would protect workers. The crisis hit several days before the commencement; NYU apologized  to any mistreated worker and said it would investigate with its Abu Dhabi partners.

New York University President John Sexton greets former U.S. President Bill Clinton at the NYU Abu Dhabi 2014 commencement ceremony

New York University President John Sexton greets former U.S. President Bill Clinton at the 2014 commencement ceremony for NYU’s campus in Abu Dahbi.

Clinton’s remarks about the crisis went further than NYU’s public statements to date. He said the university and government of Abu Dhabi have promised to look into the charges “quickly, honestly and transparently,” and if the charges were well-founded to take appropriate remedial action promptly. “NYU will make good on its word,” Clinton added.

What is particularly troubling about the crisis is that while both NYU and Abu Dhabi want to make an impact on the world through their vision for NYUAD, the focus of their institutional responsibility is on their big ideas, not ensuring that to achieve them, they do no harm.

In a 2008 speech at a United Nations forum on education without borders, NYU President John Sexton, speaking about NYU’s plans to open the Abu Dhabi campus, said,  “our mandate, as stated by the Crown Prince (of Abu Dhabi) publicly, is that by 2020 NYU Washington Square and NYU Abu Dhabi should be two of the world’s great universities and we are to magnetize talent from all over the world….”

The challenge, of course, is that in seeking to be great there aren’t half way measures on protecting human dignity, or ensuring that workers are paid what they earned (and were promised) and are not abused or kept in extreme poverty.

A pioneering code of conduct (Statement of Labor Values) would have brought Abu Dhabi labor practices into the 21st century. The labor values were agreed to by both NYU and the Executive Affairs Authority (EAA),  an Abu Dhabi government agency, and were applauded by Human Rights Watch, an organization that is historically critical of Abu Dhabi’s and the UAE’s violations of minimum international labor standards.

2014 commencement of NYU Abu Dhabi.

2014 commencement of NYU Abu Dhabi.

The crux of stopping abusive labor practices for migrant laborers is leverage NYU had and could have used with the Abu Dhabi government to help usher in a new era. The tipping point of leverage and moral authority was likely greater before the government bankrolled  building the campus, its operations, financial aid, funds for faculty and research and donated tens of millions of dollars to NYU for other purposes.

While NYU has apologized, it hasn’t stepped up to take responsibility and neither has anyone else. Given the caliber of NYU’s leadership and experience, two areas of vulnerability in the crisis make no sense – the process for implementing ethical labor standards and the vetting of a potential member of the board for conflicts of interest.

Ethical Standards

It seems unlikely, given Sexton’s longstanding experience as a college president and dean, that he would misjudge the level of education, leadership influence and execution needed to bring about change – in this case, pioneering ethical labor standards. The code was a start, but there is no evidence the government created a tone-at-the-top impetus for change in adopting new standards. Compliance reports for 2011  and 2012  identified Tamkeen, a group in the EAA, as the monitor to ensure construction employers knew they were required to adhere to the new labor standards. Tamkeen appointed Mott MacDonald Engineering  as an independent third party verifier with a second monitoring role. The reports said the labor values were taking hold and problems were quickly corrected but pointed to the need to focus on the lowest paid workers. Mott MacDonald’s independence needs to be clarified as a Google search indicated it is involved in many projects with Mubadala, a government development company.

Trustee Diligence

It also seems unlikely that the university’s 65-member Board of Trustees (which includes heavy hitters on Wall Street and in finance, law, and real estate) didn’t anticipate that others would raise questions on  and off campus  about a potential conflict of interest when they invited a leader in the Abu Dhabi government to join them on NYU’s board. Khaldoon Khalifa Al Mubarak,  CEO of the EAA, played a key role persuading NYU to come to Abu Dhabi. As Group CEO and Managing Director of Mubadala, he was essentially the contractor for building the campus. The investigation into the labor abuses the Times reported will be handled by NYU and Tamkeen, which connects with him through EAA.

Restoring Credibility

Pressure on Sexton and the trustees will continue regarding the transparency and credibility of how they handle the Times report, and what steps NYU and Abu Dhabi will take to address abuses and Mubarak’s role.

Sexton has been criticized by some on campus for his autocratic, corporate top-down style, while praised by others for his vision of a Global Network University and the bold risks he has taken to advance growth and expansion. The jury is out on how the NYUAD decision will play out. He announced his resignation last spring effective in 2016 after receiving a series of faculty votes of no confidence. This adds to the pressure on trustees.

Whether NYUAD can meet the Crown Prince’s mandate to become one of the world’s top ten universities by 2020, one thing is clear. While NYUAD says it offers a curriculum that “deepens reflections about the human condition….” the true learning lab here will be to understand how to take principled goals, like ethical labor standards, and leverage both voice and authority to correct situations where dignity, fairness and justice are absent.

Gael O’Brien, a Business Ethics Magazine columnist, is a consultant, executive coach, and presenter focused on building leadership, trust, and reputation. She publishes the The Week in Ethics and is The Ethics Coach columnist for Entrepreneur Magazine.