July 3, 2023Read More
As profiled on Stanford GSB’s website, Anat Admati, a professor of Finance and Economics, joined Stanford in 1983 after finishing her doctorate at Yale. Until the financial crisis of 2007-2009, Admati notes that she “lived in a bubble.” That bubble formed around fundamental assumptions of free markets and the notion that maximizing shareholder value fulfills a business manager’s social responsibility. Post-2009, Admati discovered, “she was not, in fact, in the stainless-steel models of the free market system.” That realization took her on a whirlwind journey that continues to this day and in parallel evolved the curriculum of Stanford GSB while challenging the overall view of business schools’ mission.
Starting in 2010, Admati pounded the pavement to uncover the false and misleading practices banks used leading up to the financial crisis. One of her first actions was publishing a paper entitled, “Fallacies, Irrelevant Facts, and Myths in the Discussion of Capital Regulations: Why Bank Equity is Not Socially Expensive.” That paper led to activism within both Washington’s Capitol Hill and New York’s Fed. From 2010-2013, she wrote numerous op-eds, letters to editors, and organized petitions to highlight continued awareness of disconnects within business practices and regulatory policy. In 2013, her book, “The Banker’s New Clothes: What’s Wrong with Banking and What to Do about It” was published and later led her to testify in Congress, participate in a sit-down lunch with then President Obama, and land a Top 100 spot in Time Magazine’s most influential people.
During Admati’s journey of activism, she revealed numerous examples of oversight by the government that enabled companies, including household names such as Boeing, Facebook, and Volkswagen, to cause significant harm to the public. She also questioned whether business schools are doing enough to address the challenges. In 2018, inspired by her MBA students, Admati created the GSB Corporations and Society Initiative, which engages on issues at the intersection of markets, businesses, governments, and society to promote more accountable capitalism and governance. That inspiration then snowballed into the development of several new interdisciplinary courses, including a new MBA elective class, Finance and Society. Additional MBA elective courses were subsequently created, from Is the Internet Broken? to Business and Government: Power and Engagement in the 21st Century World, which features visitors from business, policy, and media. Finally, in a 2019 Harvard Business Review essay, Admati urged business schools to practice and promote civic-minded leadership.