Message From Dean
Dr. Bala V. Balachandran
JL Kellogg Distinguished Professor of Accounting & Information Management, (Emeritus in Service) Northwestern University, Illinois, Founder and Dean, Great Lakes Institute of Management, Chennai, India.
The 3rd Union Bank Financial Conference on Systemic Risk was a grand success with eminent personalities and speakers including the likes of Dr K.C. Chakrabarty , Dy. Governor of the RBI and Shri. S.K. Jain, Executive Director of Union Bank of India. In reference to systemic risk, what if I gave you a set of companies which were No. 1 or No. 2 in the entire world in their respective industries at one point of time; companies such CompUSA Inc., Circuit City, Lehmann Brothers or Hollywood video. They were at the top of their game in 2007, in 2008 all went bankrupt. None of these companies, which were once at the top, exist now. Although there are several reasons, one of them is that they didn’t evaluate risk especially systemic risk mainly due to complacency. I have always said that if you are on the top floor of an elevator building, the elevator has only one arrow going down. There is no other direction, so if you want to stay on the top floor with sustainable growth, there can be no weakness or negligence on anything. There are multiple forces in play, and one of them can be completely analysed if they go under systemic research, but there are also few new things happening that I’d like to call “known unknowns” and finally there are several “unknowns”. Uncertainties are inevitable but worrying is optional and planning is paramount. Yes, you can plan, you can anticipate uncertainties and plan for those so called known unknowns. But there are also some “unknown unknowns” which are now a frequent occurrence. Who would have believed that a highest recorded earthquake of more than 9 on the Ritcher
scale followed by a huge nuclear disaster and finally a tsunami would all happen within just 28 hours in a country like Japan. In my opinion, if you want to be prepared for “unknown unknowns”, then certain fundamentals are absolutely needed and that is where careful analysis of systemic risk and an understanding of various financial trends is imperative. It is immensely useful and it needn’t be just for banks. It is a must for any organization and as a matter of fact, for every student who is graduating from this edifice as well. I do believe that we have to always be prepared and that is where the fundamental value of “Passion with Compassion” in everything we do is the need of the hour. Passion is however not sufficient. You need to have diverse abilities and knowledge and even these abilities aren’t good enough unless you have humility; ability with humility is extremely important. We should be able to think with a globalized mindset and that is why “Global Mindset, Indian Roots” is the motto of Great Lakes. And of course the most important ingredient for success is defined by YOU. You need to have that success with integrity. So study with integrity , prepare with integrity, work with integrity and then of course, succeed with integrity. Having said the above, I wi