Accounting Ethics Pioneer Stephen E. Loeb to Retire

Accounting professor Stephen E. Loeb, a pioneer in accounting ethics education and an early adopter of active learning techniques, will retire in spring 2017 following a 47-year career at the University of Maryland’s Robert H. Smith School of Business.

“Steve's contributions to accounting and business are the stuff of legend,” says Smith School professor Charles E. Olson, who met Loeb 53 years ago when their PhD programs overlapped at the University of Wisconsin-Madison. “His research record at Maryland will never be equaled, and he’s still publishing.”

Among Loeb’s other accomplishments, he rose from assistant professor to full professor in six years, served twice as accounting department chair, taught all levels of courses in all programs, mentored PhD students and was a leader in launching the school’s Business Ethics Experiential Learning Module, which put full-time MBA students inside federal prisons to meet white-collar criminals.

“He pioneered Smith's prison trip and implemented it with passion,” Olson says.

Loeb was also the key faculty member in the development of Smith’s Master of Science in Accounting (MSA) program, now part of a menu of seven specialty masters programs at the Smith School. Loeb says the program is where he sees the future of accounting education. “I’m really proud of that program,” says Loeb, the EY Alumni Professor of Accounting and Business Ethics and an associate director of the university’s Center for the Study of Business Ethics, Regulation & Crime. “I was involved with the MSA program from day one, and we’re now recruiting for our 12th cohort.”

Ethics Education

Smith professor and former dean Rudolph Lamone says Loeb also led ethics education at the school from day one. “Almost from the very beginning of his appointment to the faculty, he was focused on finding a way to meaningfully develop a course on ethics,” Lamone says.

Loeb traces his passion for ethics to his childhood in Philadelphia, where his father was a clothing salesman and his mother had worked as a legal secretary. “My dad constantly mentioned that the most important thing was your reputation,” Loeb once told a reporter.

Ethics became a research interest at the University of Wisconsin-Madison, where Loeb combined sociology and accounting after taking a course in social control. A dissertation on accounting ethics led to other publications, including a 1988 landmark paper with more than 200 citations.

Steven M. Mintz, a colleague at California Polytechnic State University, published a 2007 article documenting the paper’s impact. “As Loeb pointed out years ago, ethics is not viewed as a primary area of accounting teaching and research, and that neglect is a risky career strategy,” Mintz concludes.

Loeb has worked to bring ethics into the mainstream of accounting education. As a result of his suggestion, Maryland became the first state to require an ethics course before applicants may take the CPA exam.

“Seeing ethics education take off in accounting — and also seeing ethics research beginning to develop more and more — has been gratifying,” Loeb says. “I was one of the people who really pushed it and was at the beginning.”

Teaching Innovation

Loeb was an early proponent of the use of active learning in accounting education. “When I first came here, I was almost pure lecturer,” he says. “But I’ve changed.”

Gradually he started bringing roleplays, guest speakers and interactive projects into the classroom. “Active learning means the students are involved in their own education,” Loeb says. “I try to stimulate creative and critical thinking.”

He included many teaching innovations in the Business Ethics Experiential Learning Module, which he led from 1996 to 2007. Campus speakers included dignitaries like former Sen. Paul Sarbanes, D-Md., who brought prestige to the series. But what really raised the initiative’s profile was the prison trips.

“Reading about white-collar crime or watching a video doesn’t make that much difference,” Loeb told People Magazine in 2000. “You’ve got to be in the environment.”

The People article, which documents an MBA trip to the Federal Correctional Institution in Cumberland, Md., shows the impact of seeing a former assistant district attorney behind bars. “It really makes you think,” one MBA student reported. “If it can happen to them, it can happen to you.”

Lamone says feedback from students and prisoners involved in the program was overwhelmingly positive. “Steve's strong feelings about the importance of providing exposure to ethical concepts continues today and has influenced many students,” Lamone says.

Birth of the Smith School

When Loeb started his academic career in 1970, the University of Maryland had no business school. “We were a department of business administration in the old College of Business and Public Administration,” he says. “We were essentially on one floor, the third floor of Tydings Hall.”

Charles Taff was department chair, everybody knew each other, and professors doubled as undergraduate advisers. “We didn’t have a lot of space,” Loeb says. “Some of us shared offices.”

His first officemate was Smith School emeritus professor Burt Leete. “When Steve was first hired at the university, the head of the accounting group came to me and asked if Steve could share an office with me,” Leete recalls. “He said that this was Steve's first tenure track job and that I should show him around.”

Leete says the arrangement led to many co-authored publications, which helped both professors earn tenure.