Schools of Business officially welcome Dr. Iftekhar Hasan
Areas of Study , Event Recaps , Faculty , Finance Stories | Feb 28, 2012 | Nicole Gesualdo
The following post is adapted from an Inside Fordham story by staff writer Patrick Verel. The text is reprinted here with gratitude to the university’s communications office.
In a special ceremony, Iftekhar Hasan formally took his place this month as the E. Gerald Corrigan, Ph.D., Chair in International Business and Finance. Dr. Hasan is the first to fill what will be a full slate of specialized academic chairs held by distinguished business scholars.
Here at Fordham since fall 2011, Dr. Hasan is a prolific researcher and speaker who brings additional renown to Fordham through his role as editor of the Journal of Financial Stability, which is ranked sixth worldwide among English-language digital economics journals for their reach and impact. The journal’s mission is to identify potential risks to financial stability and to develop methods to prevent, manage or lessen the impact of these risks, both within and across international boundaries.
It is extremely promising that the Journal of Financial Stability already has established such a strong presence online. Many scholars predict that the Internet will become the primary marketplace for academic research, eclipsing the print journal market that has long dominated academia. Dr. Hasan’s journal is well positioned as this trend continues.
Dr. Hasan’s most recent public lecture at Fordham, given during his February installation, was titled “More Than Connectedness: Heterogeneity of CEO Social Networks and Firm Value.” He asked the question, are CEOs with diverse social connections able to create higher value for firms? And can that value be quantified?
The answer, he said, was yes on both counts.
“In corporate finance literature, we find that the better the diversity is in the boardroom, the better the richness of the discussion in the boardroom, and the better the performance of the company,” he said.
Dr. Hasan conducted a study that measured different aspects of heterogeneity such as gender, ethnicity, education, occupation and country of origin of 3,650 CEOs from 2,682 companies between 2000 and 2007. The study assigned a ranking to each company and then used four different “channels” — innovation, new revenue generation, better investment and lower cost of financing — to measure company value.
By factoring in CEO turnover, Hasan also addressed for the possibility of what he called a reverse causality (where companies that are already successful are the ones that hire CEOs with high levels of heterogeneity). He concluded that a greater diversity of gender and international exposure had the highest effect on a company’s value.
“These sort of results will hopefully get our corporate management to think about how, given the changing society and the changing globalization of business, this sort of hiring process of upper management and board members can be value-added for the company,” he said.
“Diversity and heterogeneity are a tangible asset, and I’m happy to have some academic evidence, through the lens of the CEOs, to see that it matters to the corporate profit.”
The ceremony for Dr. Hasan was also a chance to honor E. Gerald Corrigan, Ph.D. (GSAS ’65, ’71). Corrigan, managing director at Goldman Sachs and chair of Goldman Sachs Bank USA, earned his master’s and doctorate in economics at Fordham. His generous gift was responsible for the creation of the chair.
Corrigan remarked that it was clear that the chemistry at the university is such that it is poised for greatness. He noted that the fields of economics and finance have come to focus too much on quantitative skills, and not enough on soft skills—such as governance, business and economic history, institutional adaptation and evolution, and ethics. These are areas where Fordham can make a difference, he said.
“Fordham University, by virtue of its Jesuit tradition, its culture, and to say nothing of its location here in the heart of New York City, is uniquely positioned to provide leadership in helping to stimulate constructive and creative thinking about the philosophy of business and economic education,” he said.
Photograph by Chris Taggart.