Vice-chancellors and influential academics should be as prepared as church leaders to take a public stance on moral issues and to oppose policies that threaten the "fundamental values" of higher education, industry leaders have said.
Business representatives have called on universities to defend high moral and ethical standards and to do more to instil these qualities in students.
A report published this week by the Council for Industry and Higher Education argues that every higher education institution should have a code of ethics and build ethical, social and moral dimensions into all of their courses.
Business and industry would welcome such moves because firms are seeking more "well-rounded" and emotionally intelligent graduates whose behaviour will not put their reputation at risk, it suggests.
The report, Higher Education and the Public Good , pulls together views from industry and higher education gathered at a conference in March.
It says that recent debates about the Higher Education Bill and the Lambert review have focused on utilitarian and economic benefits of higher education, and have neglected its "deeper fundamental purpose".
Against this background, universities need to become more vigilant in defence of their "key virtues" and should pay more attention to the values that shape the student experience.
Courses should enrich students' lives and "help them to contribute ethically to society, local communities and to business, and contribute to the creation of a more just and tolerant society".
The report argues that universities and colleges do not exist solely to help students get better-paid jobs, but should be "the critical conscience of society and the repository of a moral authority".
But if institutions are to take on this role, then their leaders should be prepared to be "seen and heard".
Richard Brown, chief executive of the CIHE, said: "Leaders of higher education have a responsibility to stand up on a public platform and make comments about moral issues of the day. Why do we have to rely only on the church to play that role?"
Universities should follow the example of the private sector and develop their own codes of ethics that are publicly on show, the report argues.
And they should "seek to help students recognise the ethical issues that underlie all their courses".
Rosalind Scott, business conduct senior manager for PricewaterhouseCoopers, says in the report that in the wake of several high-profile corporate collapses, businesses are looking to recruit graduates with at least a "base-level understanding of ethical standards".
But she adds: "What is unclear is how you teach ethics. Studying ethics as an academic subject may not be the answer because what we are looking for is not knowledge, but personal qualities that give an individual the strength and courage to stand up for what they believe to be right."
'We don't want to start from scratch developing a graduate's ethics'
The Reverend Amos Kasibante , chaplain at Leicester University, believes universities should take more of a high-profile stance on moral and ethical issues and set a good example to their students.
"It may not be easy sometimes, especially as advances in science seem to overtake moral and ethical considerations. But this is an area we can't afford to leave behind," he said.
Many lecturers at universities visited by Mr Kasibante have complained that today's students seem to have little awareness or concern about moral, ethical and social issues.
He said: "Students' concerns seem to be more in the narrow sphere of acquiring competencies to get a job, or about fees."
An ethical code for all universities would be a good idea in principle, he said, but only if it was "more than just propaganda".
Elaine Marron , graduate recruitment manager for PricewaterhouseCoopers, said business and industry saw ethical and moral integrity as an essential "employability" skill, but one that many graduates lacked.
Institutions therefore need to make more effort to ensure that courses develop such qualities in students.
She said: "We do not want to have to start from scratch - which often we do - in terms of developing a graduate's sense of integrity and ethics."
Universities should draw up a "ten commandments" - a short code that reflects their ethical outlook, she said. "We are not going to come down from the mountain and impose it on them. They will have to consult internally and externally on what it should contain," she added.
Mandy Telford , president of the National Union of Students, said the "extra benefits" society reaped from having well-educated citizens had been missing from recent debates on higher education.
"We are pleased that the Council for Industry and Higher Education has recognised the important role that universities play in helping students develop ethically, morally and socially, as well as academically.
"The NUS has always encouraged students to get involved in as many activities as possible, the majority of which are led by their local student union. We hope more institutions will seek ways to improve the whole experience for students."
Baroness Warwick , chief executive of Universities UK, said universities and their staff already followed a wide range of codes of ethics, such as those relating to research and professional bodies.
She said: "A sense of ethics and values permeates institutional approaches to staff, students and communities, from the proper conduct of staff to appropriate behaviour on campus. Universities would welcome the opportunity to share experience with business for mutual benefit." firstname.lastname@example.org