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This is the second in a series of interviews with Smith
School department chairs, designed to give Smith MBA students
insight into the views of faculty members in a variety of
disciplines. For this month's issue, Brian Wallace interviewed
Dr. Lemma Senbet, Chair of the Finance Department and the
William E. Mayer Chair Professor of Finance.
What resources outside of the Smith School do you use
to keep up on finance-related news and events?
 I
read The Wall Street Journal, Financial Times, and The Economist
regularly, as well as watching business television broadcasts,
such as CNBC and Bloomberg. I'm on the board of directors
of the Fortis/ Hartford Mutual Funds and obtain regular reports
on current economic and financial outlooks. I also work with
various institutions, through the World Bank, on emerging
market finance and economic issues in developing countries,
especially Africa.
Academic conferences are another place to pick up ideas and
insights. I'm a member of the American Financial Association,
the Financial Management Association and the Western Finance
Association. These groups sponsor highly competitive conferences
where people from all over the world can meet and exchange
ideas. In fact, we also hold a conference here at Maryland
every other year to bring together academics and practitioners.
Moreover, I get a lot of useful information from academic
journals, and I'm the executive editor of Financial Management,
the journal of the Financial Management Association, along
with Professor Alex Triantis, who is also an editor. We just
won an international award for originality and practicality
for articles we published last year in the category of accounting
and finance. It's very difficult to create a publication that's
both original in terms of research and practical, and hence
we feel honored by the award. Sometimes these journals publish
material that's only useful to other academics, but we try
to do something beyond this.
How do you see the Smith MBA finance program evolving
and improving over the next two to five years?
Let me begin with where we are. I recently spearheaded a
faculty review to see how our curriculum stacks up against
the competition, and we found that what we're doing is very
consistent with the top institutions. The only gap we discovered
was in the area of private equity and venture capital, so
there will be a new course in venture capital offered soon.
In terms of the current portfolio of classes, I'm very pleased.
My overriding philosophy is that we should help students
to improve their way of thinking. It's intangible, but it
should be the critical thing we provide. We need to help students
expand their ability to think and analyze, not just be technical.
Overall, we do a very good job in terms of the quality of
teaching. The entire department has been transformed over
the last decade, and we've assembled a world-class faculty.
I want to continue to build up the faculty with experts who
know what's going on at the cutting edge of the field. I'd
like to see more faculty involvement in enhancing placement
of students. We're building a critical mass to do more of
that, especially given that we have more faculty coming in
with real-world experience. We're also creating a separate
advisory board for the finance department consisting of outside
executives. This will allow two-way communication to help
us meet the needs of the market and measure the relevance
of the curriculum.
Looking further ahead, it's a good idea for programs in finance
to be cross-functional to capitalize on other areas of the
school. For example, we could combine elements of finance
and marketing, or create a financial consulting program that
could partner with management consulting. The issue of ethics,
especially in light of Enron, is one area where we might need
to do something more direct; we address it indirectly in some
of our classes now. We've also been looking at creating additional
graduate field projects that allow students to work directly
with companies.
Finally, apart from the group field projects, experiential
learning is provided through our highly successful Mayer Fund
and the newly established financial markets laboratory. The
two programs offer hands-on experience as well as staying
at a cutting edge of technology affecting the functioning
of financial markets. We plan to have more expanded space
and laboratory experience with the expansion of our building.
What aspect of finance do you see as most critical for
MBA students to know, both those planning on careers in finance
and those going into other fields?
Students need to realize that ours is a very interconnected
world, and they must have a global vision. You don't have
to go overseas, but I recommend that people take courses in
international economics or international finance to understand
how everything relates. Moreover, tools in risk management
require advanced understanding of derivative and exotic securities,
along with the requisite technical background. We have courses
that provide training in risk control mechanisms both in the
corporate sector as well as in the investment world. It is
also critical that students gain appreciation of effective
usage of information that drives corporate finance and securities
markets, especially in light of the Enron debacle. Finally,
staying abreast of the technology that is used in today's
finance is vital. Our curriculum attempts to provide opportunities
in these vital areas of finance critical for success in finance
careers.
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