The Pain of The Number

The Pain of the Number

Last summer, when I knew I would be moving out to San Diego, I reached out to several schools in the area that had graduate business programs to see if there was any interest in my credentials as a ten-year-member of the faculty at Cornell’s business school and a forty-five year Wall Street business manager. The folks at the University of San Diego showed interest and I went at the beginning of this year to the campus to meet with the heads of the finance faculty and the new Dean of the school. Things evolve slowly in academia, which is very much by design. Several months later the enthusiasm expressed at our New Year lunch took form with an offer by the new Finance Department Head for me to teach a small course in the Fall Semester. I agreed and we then agreed to a schedule and course title and description. I have even seen an email this week indicating that the school is doing a thorough background check on me and that the results of that check has come up all green lights (I will admit to a momentary increase in pulse as I looked through the report citing a search through the records of every court in the Western World). I was also asked several weeks ago by the Associate Dean who had shepherded my candidacy through the school to teach a guest lecture in her summer course in the Executive Leadership Program.

I very willingly accepted because the course is an Executive Ethics course in the Executive Masters Program. I have a deep interest at this stage of my life and career in trying my hand at an ethics and/or policy program. Those two important courses of study are necessary for graduate business programs and many want to teach what amount to the pinnacle or vortex of courses. I am to be a guest lecturer on the first day of class (this has shifted to being a virtual or Zoom course). The first day is the day when the class will discuss the pre-reading assignment and the 1,000 word ethics essay they will have each prepared and handed in the day before. To begin with, this program is for business people who have been working for at lest ten years, so they are a more than ordinarily mature student body of about twenty with half men and half women. The Associate Dean is, by specialty, an accounting professor who did her graduate work at none other than Cornell, under the tutelage of an accounting faculty that I know very well. She had even been to several functions at my house in Ithaca and knew a good deal about me before we ever met. The Academy is a small world.

The book which has been assigned to kick off this course is The Number by Alex Berenson, a well-regarded ex-journalist for The New York Times. The book can be summarized as a retelling of the history of how quarterly earnings, and the focus thereon, corrupted both Wall Street and Corporate America, culminating in severe market collapse in 2000 in the wake of the dot.bomb bubble bursting. The Associate Dean was right to assume that I had many stories about the lead up to 2000, since that was when I left Wall Street for the first time and launched a new media venture capital fund almost on the exact day that the NASDAQ died. My problem is not finding interesting ethical dilemmas to use in the storytelling for the class, the problem will be in selecting only a few of the stories that are pent up inside of me from those days of glory and disaster.

I have now read the book and have to say that I am surprised at how much angst it has dredged up in me. There is little in the history with which I was and am unfamiliar. I lived on the point of that sword, being on the management committee of a major institution like Bankers Trust and being the Chairman and CEO of Deutsch Asset Management, a big part of its successor firm. I had been the recipient of generous stock option awards, years of restricted stock, big bonuses and, ultimately, a very nice golden parachute award, all monetized in 1999, just before the markets collapsed in 2000. I suppose I could easily say that I have had my share of bad timing in my career and investments and that I deserve an occasional bout of good timing like this, but that moment and that timing was extraordinarily fortunate. Therein lies my conundrum. This book tells a story of excess and misadventure by those in charge of banking and Corporate America. I was not Kenneth Lay of Enron nor Dennis Kozlowski of Tyco, but I have stories that connect to both of them from this time. In fact one of my ex-staff went to jail with the Enron, Smartest Guys in the Room guys. And my ex-boss was the head of the Compensation Committee of Tyco when Kozlowski spiraled into overpaid oblivion.

There is so much in the tale that The Number lays bare that strikes at the heart of what I spent my career doing. And here’s the strangest part, as much as the episode in 1999-2001 has its imbedded ethical angst, it was far less turbulent, both financially and ethically for me than were the days a decade prior and a decade after. I have just started putting together my notes for my guest lecture and already finding amazingly plentiful good grist for the mill. I believe that the years I spent on Wall Street and the things I have seen and people I have encountered give me a unique and powerful perspective on critically important ethical issues. Since my studies of ethics, going back to my high school course in it taught by a seminarian preparing for the cloth in the halls of the Vatican, I have always found the subject fascinating and ponderous. I know that there is little black and white in the topic and I feel that I am prepared to explain the shades of grey to these students with a goal of showing them a few pointers about how to stay on the side of righteousness.

As I prepare I also have a brief bio on all the students and take great pleasure in the diversity of the students I get the opportunity to teach. Unlike at Cornell, where almost all of the students taking my courses aspired to being investment bankers or hedge fund managers, these students are widely diverse in both background and current vocation. There are perhaps only two or three financial executives, and while they still mostly share an ambition to rise to higher rank in their corporations or field, there is this one student that has caught my eye. Strangely enough, his name is hard to miss. I do not want to say his name but it is evocative to almost anyone of a name implying a querulous state of being. I will have to work hard not to make light of it since I am sure he has “heard them all” his whole life. He is a sole proprietor of a tree care business and he is in the program for pure self-enrichment and to become the best manager he can be.

I rarely run across someone who is studying for the sake of study and self-improvement. It is both curious and admirable. I look forward to understanding if his motives are as pure as they seem on paper. I suspect they will be. I also suspect that I will learn as much as the students will since I have never taught students of this sort and I look forward to their fresh and hopefully honest perspectives. I am hoping their insights and reactions will help ease the recollection and pain of The Number.