Crises,Financial Leadership,and the Six Stretches for Financial Education |
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| Authors: | Robert F Bruner |
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| Institution: | ROBERT BRUNER is University Professor, Distinguished Professor of Business Administration, and Dean Emeritus at the University of Virginia's Darden School. |
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| Abstract: | The former dean of the University of Virginia's Darden School explores how business schools must adapt to prepare future business leaders to assume the leadership responsibilities necessary to respond effectively to financial crises. The article begins with a statement by Milton Friedman and Anna Schwarz in their Monetary History of the United States about the failure of U.S. policy makers to prevent the collapse of the U.S. banking system during the Great Depression. Then turning to the crisis of 2008, the author draws on recent accounts of the leadership—both effective and ineffective—provided by policymakers to support Friedman and Schwartz's contention that the success of countries in responding to crises “depends on the presence of one or more outstanding individuals willing to assume responsibility and leadership.” After citing Nassim Taleb's characterization of the financial system as inherently “fragile,” the article offers a number of insights about the kind of leadership that is likely to prove effective in protecting such systems. Using the responses of policymakers like Bernanke, Paulson, and Geithner as examples, the author observes that successful leaders rank priorities and set direction, mobilize collective action, choose whether and how to use the “panoply of tools” at their disposal, and attempt to respond in a comprehensive, coordinated way to all aspects of a crisis using a flexible set of approaches and methods that he identifies as “Ad Hoc‐racy.” With such insights in mind, the author goes on to suggest that changes in current research and teaching about leadership are likely to take the form of the following six “stretches”:
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