FDIC Chairman Powell Inspires Smith Students

On Wednesday, April 28, the Smith School proudly welcomed Donald E. Powell, chairman of the Federal Deposit Insurance Corporation (FDIC), to deliver an address to its business students.

Chairman Powell's speech, "Leadership, Ethics, and the Free Market," captivated the audience of Smith undergraduate, graduate, and doctoral finance students. Powell defined leadership with five common threads: a sense of purpose, good relationships, self-discipline, competitiveness, and passion.

"Where do you want to be in life five or ten years from now?" Powell said that to be successful leaders, students must have a clear purpose of what they want to do with their lives. "Leadership also means developing good relationships and getting along with people," he declared. "It's critical to learn how to give and take." You may have an impressive academic background and great professional credentials, but if you can't get along with your fellow man, you won't get hired, he added.

"Self-discipline means aiming for excellence in our physical, spiritual, and intellectual lives," Powell explained. "Excellence is not an act-it's a habit. We are what we repeat. Strive for self-discipline in your actions and your thoughts, young men and young women. Get the junk out of your mind," he reiterated, urging students not to develop bad habits. "Spiritually, who you are is not in the mind," he warned, pointing to his head, "but in your heart and soul. Herein lies the wellspring of life," he declared, pointing to his heart. "Leaders are driven here."

Powell advised that "competition in the marketplace is very fierce today, so you must be technically competent to survive. Leaders love to win-they're competitive. Leaders aspire to be the best, so compare yourselves with the best," he encouraged. Don't be satisfied with average peer reviews; always aim higher, he said.

Powell saved the best definition of leadership for last-undying passion-and he embodied it. Leaning toward the audience, he proclaimed, "We're fighting a war on terrorism and two battles. 9/11 was a defining moment in American history, and this country will never be the same."

The first battle we fight daily is for free enterprise and capitalism, which are in jeopardy, Powell said. "It's good-not evil-to make money. In fact, making money is morally correct," he reminded the business students. "Mr. Robert H. Smith gave to this business school a $15-million check driven by profits he earned in the free enterprise system-and you are the beneficiaries of his profit margin," and his generosity, he implied. "It's not the government's role to dictate how much money you make," he cautioned. With unswerving confidence in capitalism, he added, "The free market will determine that."

The second battle we face is the one for moral clarity, Powell said. "What's important to you? What do you want to be remembered by?" he asked, referring to the prior financial economics discussion. "Money is not more important than your principles, so be clear about these and know your values," he declared. A passionate Powell motivated the captive crowd with these inspiring final words, "I believe in you-America believes in you," as the audience gave him a loud round of applause.

Powell fielded questions from the audience. One question concerned the intersection of free enterprise and its ethical implications-how do you reconcile them? "You must have moral clarity and proper values," he reiterated. "Create an accountability to your own conscience based on good friendships, trust, and integrity. And be strong in your convictions," he urged.

A doctoral student asked about current assertions that executive salaries and bonuses are exorbitant: "What are the industry benchmarks for CEO compensation?" Intrigued by the topic, Powell exclaimed, "The marketplace is the checks-and-balances for that. Transparency is the solution, and disclosure is a duty. I'm 62 years old, and I make $138,000 a year." With sound, practical advice, he recommended, "Read your proxy statements to find out which stocks your company invests in, your industry peers invest in, and what the management owns. These will tell you a lot."

"Leadership, ethics, and free markets are critical paradigms in the running of a market-based economy." said Haluk Unal, professor of finance at Smith. "Chairman Powell's talk on leadership and business ethics was quite timely and thought-provoking. Smith students had a great chance to meet an all-American business and public leader."

The event was co-sponsored by Smith's Finance Department and the Finance Banking Investment Society, an undergraduate student organization.

For Chairman Powell's biography, visit www.fdic.gov.