Solène Delecourt selected as ‘Best 40 Under 40 MBA Professor’ by Poets&Quants

A smiling woman with short blond wears a yellow blazer and stands with arms crossed. A badge reads: Poets&Quants Best 40 Under 40 Professors
Assistant Professor Solène Delecourt

Assistant Professor Solène Delecourt, who teaches negotiations to MBA students and studies business inequality, has been named as one of Poets&QuantsBest 40 Under 40 MBA Professors” for 2024.

Delecourt was selected from among 1,000 nominations from students, administrators, and faculty members at business schools around the world. The announcement comes just after she was honored with a Cheit Award for Teaching Excellence—the highest teaching honor at Haas—by students in the full-time MBA program.

“This has been a terrific year for me. I am thrilled to be chosen as one of the 40 under 40 MBA professors,” Delecourt says. “I want to thank my students wholeheartedly for their nominations.”

Just four years into her academic career, Delecourt is described by her students as a professor who changed their outlook on negotiations for life—a critical skill in our polarized times

Solène’s strongest message throughout my negotiations course was to create a win/win outcome, and assume we are all on the same side,” said Namit Singal, MBA 24, in his nomination. “I absolutely loved this learning and will take it away for life.”

Alex Berry, MBA 24, said he was going to switch out of an 8 am class section until he met her. “She brought an energy, vulnerability, and practicality to her classes that should be a model for every MBA professor.”

Besides her expertise and creative teaching methods, students also praised her sense of humor, positivity, and “infectious energy.” She earned a perfect score on her teaching evaluations—7 out of 7—last fall.

‘In love’ with teaching

In describing her path to becoming a business school professor, Delecourt says she accidentally “fell under the spell of this career path” after starting her PhD at Stanford, and “I am in love with it.” Her goal is for her students to learn while having fun.

“If they don’t have fun, I don’t think they’re going to remember much. At the same time, they need to learn because this is a class, it’s not a party,” she says. “And so for that, I design all of my classes to be packed with action.”

Some of those class activities include an improv-inspired negotiations tournament, and an open mic session where students share stories of a prior experience where negotiation skills could have helped them. She has a curated playlist—Beyoncé is a favorite—with lyrics that reinforce key learnings.

Delecourt also draws from her research passion to make students aware of power inequities, particularly for women and people of color. Her academic work has been gaining increasing recognition: A co-authored paper published in the journal Nature this year showed that googling for images rather than text amplifies gender biases. It received widespread media attention and won the Best Paper Prize at the 2022 International Conference on Computational Social Science, and was a semi-finalist at the 2021 Wharton People Analytics Competition.

Most of her research is at the intersection of entrepreneurship and gender. She recently ran a field experiment to test whether access to generative AI can boost success for small business owners in Kenya—and found it only helps people who were already high-performers. The paper won the 2024 white paper competition at the Wharton People Analytics Conference. Delecourt’s work has received funding from various sources, including a $250,000 grant from the Alfred P. Sloan Foundation this year. She currently serves as an editorial board member of the journalOrganization Science.

12th year of “Best 40 Under 40”

This is the 12th year that Poets & Quants has published the “Best 40 Under 40” list with the goal of “identifying and celebrating the most talented young professors currently teaching in MBA programs around the world.” The publication’s staff evaluated each nominee on teaching (weighted 70%) and research (weighted 30%).

Read the full article for more details.

Stripe co-founder and CEO Patrick Collison on “prizing the small details”

A man speaks into a microphone on a stage while a woman and man listen.
Professors Jennifer Chatman (left) and Sameer Srivastava (center), co-directors of the Berkeley Center for Workplace Culture & Innovation, interview Stripe CEO Patrick Collison.

Patrick Collison and his brother John conceived of financial services company Stripe as something that they thought should already exist. 

On the way back from a UC Berkeley-hosted startup event in 2009, John, who is president of the company, suggested that they turn their idea for an “easy way to move money online” into a reality by creating their first prototype. Now, Stripe is used by millions of businesses across almost 50 countries, from startups to global enterprises like Ford and Amazon, having reached a $1 trillion in total payment volume. 

Co-founder and CEO Patrick Collison shared his journey founding Stripe and the company’s mission to “grow the GDP of the internet” at a recent Dean’s Speaker Series, co-hosted by the Berkeley Center for Workplace Culture and Innovation. Professors Jennifer Chatman and Sameer Srivastava interviewed Collison in a fireside chat format.

Born and raised in rural Ireland, Collison grew up without a consistent internet connection, only reading about it in books. At age 13, he made his first pitch to his parents for satellite internet. It was from here that he discovered programming, planting the first seeds for one of the most successful software-as-a-service companies today. 

But the journey from startup to Fortune and Global 500 wasn’t always smooth. Between difficulty finding growth to feeling like he was misallocating time, Collison reflected that the first few years were a time of trial and error. He noted, however, that if the idea and the market are good, startups can actually be fairly resilient as management learns along the way.

“I think it’s much better to be right than to be consistent. And I think somehow getting yourself into the psychological frame where that’s OK, and you can swiftly recognize, ‘well, I tried this, it’s really not working, let’s do something else,’” Collison said. “As long as you get into that mindset, I think a lot of the actual errors themselves are recoverable.” 

With the success of the company dependent on handling people’s money, Collison likewise stressed the importance of ensuring a meticulous and diligent atmosphere at Stripe. 

“There’s this culture at Stripe of just really prizing the small details. And we talk a lot about craftsmanship and rigor and abstractions that can endure over decades and sort of really getting those right. So I would say precision is pretty deeply embedded,” he said. 

Stripe is also known for its early adoption of a writing-oriented culture. An avid reader and self-described “misanthropic introvert,” Collison said this came about partially as an accident. But he likewise reflected on its benefits, citing written work as valuable for its ability to be reflected and improved upon. 

In 2020, the company launched Stripe Climate, which allows users to direct a portion of their revenue toward scaling carbon removal technologies, leading to the implementation of the second-ever large-scale advanced market commitment (AMC) for carbon removal.

The company’s mission to do good hasn’t stopped there. Believing access to the internet is crucial for global development, Collison stressed the role Stripe has on aglobal scale. Citing his own experience witnessing the rapid expansion of Ireland’s economy, he stressed the “moral importance” of economic growth for parts of the world that have been left behind. . 

“I think the internet is one of the most important technologies ever created with respect to the enablement of global development,” he said. “Stripe’s mission is to grow the GDP of the internet.”


Read the full transcript 

– Good afternoon. It doesn’t seem like it’s on. Is it good? Good afternoon. Welcome to our Dean’s Speaker Series, co-hosted by the Berkeley Center for Workplace Culture and Innovation. My name is Jenny Chapman. I’m the associate dean here at Haas. Dean Harrison is actually traveling on school business, kind of around the world right now. She apologizes that she can’t be here, but we are here, and I’m so absolutely thrilled to introduce our guest today, Patrick Collison. Patrick has been an entrepreneur, I’m guessing since the day you were born. He created iPhone apps with his brother John and his teams, founding Auctomatic while at MIT, and co-founding his biggest venture Stripe, which we’re going to talk a lot about. Stripe was born when Patrick and John looked for a payment platform but couldn’t find all of the features they thought would be important. And Stripe debuted in 2010 and grew exponentially because the product is really simple for businesses to implement. Of course, the back end is anything but simple, but it’s easy on the front end for customers. Through Patrick’s leadership, Stripe has reached, listen to this, $1 trillion in total payment volume. So it’s really becoming a dominant methodology. And today—

– You can’t assume the causality, though, there. You can’t say, like, because of my leadership. It could be despite my leadership.

– I’m sure that that’s correct, but we will talk about the attribution, I’m sure. You will deflect it, and we will heap it on. So today, millions of businesses, from hypergrowth startups to global enterprises like Ford and Amazon, use Stripe to accept payments and payouts, manage complex business online. Patrick, we were back in our green room here, and Patrick was telling us about his biomedical research foundation, the Arc Institute, that he co-founded in 2021. Fascinating, fascinating work. Through the Arc Institute, Patrick and his co-founders are pioneering new model research in partnership with Stanford, UC San Francisco, and UC Berkeley, and hopes to enable passionate biomedical investigations to study and address complex diseases, which gives us all great comfort to know that brilliant minds are researching some of the most difficult health challenges that we face. So Patrick, we’re incredibly grateful to have you here today, to impart your learnings on our student body.

– No, thanks for having me. And it’s a particular honor to be here because the first time I tried to come here, you guys rejected me. So it’s… No, look, I might have rejected me as well.

– So did you land at your safety school, MIT?

– My first ever trip to America was to the Bay Area to… And I visited Stanford and Berkeley, and those are my first, literally, kind of two experiences of the U.S., and I just assumed all of the U.S. is like this. And so then, I, yes, decided to apply to college here, but I couldn’t get further than the East Coast.

– Oh my gosh. Well, that was a miss on our part. I can’t say it would be the first or last one, but… Anyway, let me do two more housekeeping things, and then, we can properly welcome you. The first housekeeping issue is: You notice that you have note cards on your chairs, and a pencil. And it’s not for keeping your golf score. But please, if you have questions, please note them on the card. We have collectors, Sarah and Audrey, who will be collecting them throughout the session and bringing them up here. And at around 1:15, 1:10/1:15, we’re going to start answering questions from the audience. So please, be sure to capture those questions. And second, I want to introduce my colleague, Sameer Srivastava, my partner in crime. We are the co-founders of the Berkeley Center for Workplace Culture and Innovation. And many of you probably have had Sameer for the power and politics class. So Sameer, welcome too. So let’s give now a proper welcome to Patrick if we might. Thank you so much for coming up. So let’s start with a kind of softball question, which is, if you could walk us through your kind of career progression, I think it would be of great interest to our students.

– Oh gosh. Alright, well you already heard an important detail in this, but, so I grew up in very rural Ireland, and our house was kind of far from the phone exchange, so it’s more detailed maybe than the career than you want, but you can push fast-forward at any any point. But just the relevant kind of consequence of that was, we couldn’t really get a proper internet connection. And so, I first learned about the internet by reading books and borrowed from the library, and to think, “Wow, this internet thing sounds great.” And there was no TikTok or anything. And then, actually, the first pitch I ever wrote was to my parents when I was 13, trying to convince them to get this kind of pre-Starlink satellite internet connection from Germany, and very, very graciously, and I don’t know, forbearing exceeded, and we got it, and it was 100 euros a month or something, which was a big deal. So once we got that, then, I discovered programming, and kind of fell down that rabbit hole. And then, when I went to MIT, and maybe you guys have had kind of versions of this experience, but I considered myself pretty good at math and physics and sort of science and things like that when I was in high school. And so, MIT had three different intro kind of freshman physics classes. And I thought, with great ambition and virtue, that like I’d go take the hard one, and I did, and it was hard. And they had this kind of particular midterm, and that, I guess they use this kind of weed out, I don’t know, the something… And I remember the average score on that midterm was like, a 43 or something. And I was feeling, initially, I don’t know, well kind of mixed feelings, but somewhat proud I’d scored like a 70 or something like that. And then, I saw that this… I don’t know if this is good for one’s psychological well-being, and maybe now this policy has been reconsidered in the intervening years, but at the time, they published everyone’s score publicly. And then, I saw that this guy, Yufei Zhao, had gotten like a 97. And that was like a big moment in my life where, to be clear, I’ve never interacted with Yufei Zhao, I don’t think he’s heard of me.

– But you certainly remember his name, don’t you?

– He is large in my life. And I thought, well, “If Yufei Zhao exists and can be so spectacularly better than me at physics, well, maybe I shouldn’t become a physicist. Comparative advantage, Ricardo, the whole thing. So I did some soul-searching, and by the way, I looked him up, and he’s done very well now in math and physics. So, I think we… And he now trains MIT Putnam team, and they’re doing… Anyway, so he found his thing.

– He didn’t found Stripe.

– Well, look, I think he’s not doing… I think Yufei Zhao has self-actualized with tremendous effectiveness.

– You both have.

– But anyways, so… But I done all this programming in high school, and so… And then, right around the time of that midterm, this was fall of 2009. Sorry, fall of 2006, excuse me. Reddit was purchased by Conde Nast for I think $12 million. And I knew the Reddit guys a little bit because YC started out in Cambridge, and they were based there in Cambridge, and they were just like normal people, or so I thought, and the idea that they’d just sold like a website, like anyone can make a website, for $12 million, just there, was a big kind of shift in my perspective. And so, I thought, “Well, not cut out to be a physicist, maybe this startup thing could be interesting.” And I really liked programming. And so, my brother and I, we decided to start a company. It did OK. It was acquired for a reasonably small amount. Went back to school. And something we learned over the course of that first company was… Cloud computing was just starting back then. I think EC2 launched in ’07, maybe ’08. And it was now getting incredibly easy to just launch a website, and you could do that in an afternoon. You didn’t have to call someone up and rent a server. But whenever you wanted to move money, it was kind of jumping back in time a century. You’d go to a bank and fill out paperwork, and the forms were in Latin—or so it felt. And so, it was just this kind of weird dichotomy, where certain aspects of setting up a business were becoming kind of so streamlined. And then other parts were, yeah, were so… There was such a high activation energy barrier and kind of so much inhibition, and we thought something like Stripe must exist, and we were Googling for it. Like, there must be, like… How could there not be an easy way to move money online? Like, it’s not an obscure need. But we eventually concluded there wasn’t. And so, we’re walking back from dinner, not that far from here, a restaurant in San Francisco, and John turned to me… We’d come out here, actually we come out here for a startup event at Berkeley. You guys hosted YC startup school in 2009. And we were feeling very inspired. And so, after dinner, John, we’re walking back, John said to me, “Well, we should just build a prototype of this Stripe thing. You know, it can’t be that hard.” Here we are.

– Wow, that’s great.

– Great, so we wanted to ask you also about the early days of Stripe, ’cause every startup faces challenges and hurdles. So, could you describe for us, like, one big challenge or hurdle that you encountered in the early days of Stripe, and how you overcame it?

– Well, I had breakfast this morning with another startup founder, and we were kind of reminiscing about or discussing the fact that people will sometimes ask us now, I mean, she’s been working on our company for, I don’t know, five or six years now. And people will sometimes ask, like, “Is it still fun?” And we were kind of making fun of this question because the early stages of the company are never fun. And so, is it still fun? Like, which period was fun here? So, look, the early days of Stripe, like, in hindsight, it’s now, like many maybe intense experiences in life, you look back on them with some kind of fondness, but when you’re living them, I mean, you don’t know the outcome. I mean, they’re just stressful. I remember very vividly just how intent, intently, and intensively we worked. And I don’t know if we kind of had to, but we felt like we had to, and we did. Like, we started out down in Palo Alto, and we hired this guy who lived in San Francisco, and he ended up deciding to move from San Francisco to Palo Alto because the last Caltrain left Palo Alto to go north at 11 p.m., and he felt guilty leaving the office early every evening. And that’s, like, again, maybe that was… We were kind of misallocating our time or something, but just as a descriptive matter, that’s how it played out. And then, of course, there are all sorts of undulations and tribulations. Like, I remember our first serious outage very vividly where people are using Stripe to move money, and if Stripe is down, their business is down. So we felt this very intense responsibility, and a rack blew up at a data center, and Stripe therefore was unavailable. And we had a kind of… We didn’t have proper redundancy at the time. And I was paged at 2 a.m., and very unusually I’d left… I mean, Stripe was five people at the time, and very unusually, I’d left my laptop at the office, so I had to get on my bike, pedal to the office, start trying to fix things. It took six hours. Eventually, 8 a.m., 10 a.m., it’s back online. I remember feeling so horrifically dejected because I realized, as Stripe recovered, that we hadn’t received a single complaint. Nobody had even noticed. Stripe was that inconsequential in the world. And then, of course, subsequent to that, we had production issues that were… In fact, there was no shortage of complaints. And you’re taught to be kind of careful what you wish for. But I would say overall that… And by the way, I think this is not… I don’t think Stripe was in any way an unusual experience here. Like, I don’t think it’s in any way unusual where the experience of the first five years were… It was fulfilling, but, yeah, it was just like difficult AF. And I remember Jensen recently saying publicly, Jensen Huang from NVIDIA, that, if he’d known what starting NVIDIA would be like, even knowing the outcome today, the hottest company in the world, whatever, that if he’d known in the beginning what it would actually take, that he wouldn’t have started it. And I think, even when you condition on success, you get sort of a surprising number of responses like that.

– So we’ve been—

– I’m sorry, I’m really encouraging you guys to start a company. It’s great. Such a motivational fireside chat here. But look, actually, OK, if I knew what it would take, I would still start Stripe. There.

– You’ve heard it here first.

– Maybe NVIDIA was just harder or something, and I’m just a wimp, but…

– Yeah. Maybe he was having a bad day. So we’ve been really intentional here at the Haas School at creating a deliberate culture, which our students know well. We have four defining leader principles. One of my favorites is confidence without attitude, which is why I think our students are so open to learning and not overconfident. But I’m wondering about your intentionality in designing the culture at Stripe, and what you did initially, how you’ve scaled the company. I think now you have something like 7,000 employees. What looks different now? How is the culture doing? How are you thinking about it? We would be super interested to know.

– Well, just, you mentioned kind of the culture, the values here. And actually, we did notice pretty early on, and I won’t mention kind of any other schools, but just, we noticed that Berkeley students were more humble. And that was something that… But gee, you can’t let that go to your heads. It’d be self-defeating. So you can’t be proud of that. But yeah, I don’t know if it’s the Irish thing or something, but somehow… I mean, Ireland has kind of a hypertrophic pernicious version, I think, of humility, where we start to get resentful of anything that’s successful. Like U2 or any other tremendous Irish export, we take a very dim view of those things. But anyway, so we, early on… I don’t know. Well, partly because we knew that Stripe, even if it worked, would take a long time, just ’cause it’s an infrastructure business. With Snapchat or TikTok or something, everyone can just kind of decide overnight, we’re going to adopt it, it’s going to become super popular, within two years it’s an overnight success, whatever. If you look at the internet, or if you look at… Take a company like Amazon, kind of companies that are operating more at the sort of infrastructure level. Like Amazon, within its first couple of years, was not growing 100% year over year or something like that. Amazon, within four years, was growing at about 30 points a year. And what’s remarkable about Amazon is just the durability with which they’ve sustained that growth, but the kind of the rate itself is not particularly noteworthy. And similarly, if you take the internet, the internet has grown at a compounded rate of around 30% to 40% year over year. But in no year after the first two, I think, did the internet double year over year. Again, it was just this remarkably sustained growth over the course of, now, more than four decades. And so, anyway, we kind of knew that Stripe would… Again, even if it was going to work, would probably have roughly that kind of character. And so, yeah, we wanted to figure out a sort of a cultural orientation that we thought would kind of befit that, and that that requires recognizing that we’re not here to build cars, we’re here to build roads, and it’s the kind of personality not of someone who wants to build some hyper-successful app, but the kind of person who would like to build a TCP stack. And that’s not everyone, and that’s fine. We need cars for the roads. And so, there’s kind of a diversity of different skills required. And again, it is very hard to separate that which is adapted for Stripe and that which is just kind of personal preference or something. But because Stripe’s domain is really complicated, and where the details really matter. Like, if we make a mistake, just one mistake, there’s a very good chance that that’s, like somebody’s paycheck is wrong or something. It’s even in a single instance… There’s this, I think, a culture at Stripe of just really prizing the small details. And we talk a lot about craftsmanship and rigor and abstractions that can endure over decades and sort of really getting those right. So I would say precision is pretty deeply embedded.

– So could you talk a little bit about your own leadership journey during that process? It’s one thing to be the leader of a small startup, another to be running an organization of the size and scale that Stripe is now. And thinking, in particular, about this idea of rigor or precision, how do you really try to embody that and reinforce it through your own leadership?

– Well, the good news about startups is, as far as I can tell, if the initial idea is good, and if kind of the market’s good, like, kind of those core characteristics, and if you’re willing to recognize your mistakes, the startups… So startups I think are actually quite resilient, and they can endure a lot of managerial malfeasance as you learn along the way. And I definitely didn’t come to Stripe with any kind of enlightened leadership expertise or sort of genetic muscle memory or something. Like, Stripe didn’t have any managers until we were 70 or 80 people. And that’s not a best practice. If we were doing it all again, I would definitely kind of invert colors on that one. And also, there’s lots of other things that I think in hindsight were ill-advised and mildly unhelpful but empirically survivable. And so, I think at a meta level, the question is, yeah, much more sort of the rate of adaptation, the rate of learning. And John and I, we’re… Stripe conducted layoffs in 2022, where… During the pandemic. I just said a moment ago that the internet, Amazon, whatever, didn’t grow that quickly. During the pandemic, it was such a crazy time that even though, again, Stripe broadly has that character, we roughly doubled in 2020 and 2021. And so, kind of our forecast, how big we would be and what we would need to sustain the service and everything got pretty out of whack. And so, in 2022, we were trying to kind of rectify this, obviously acknowledging a misprediction on our part and significant mistake. And John and I had this conversation, where we decided, imagine that we’re sort of marauding private equity raiders who’ve just purchased Stripe, and we’re horrified at the decisions the prior management has made. And the want and errors and mistakes and sort of grievous instances of mismanagement that have been committed. And somehow, I think it’s much better to be right than to be consistent. And I think somehow getting yourself into the psychological frame where that’s OK, and you can swiftly recognize, well, I tried this, it’s really not working, let’s do something else. I think, as long as you get into that mindset, I think a lot of the actual errors themselves are recoverable.

– Yeah. Better to be right. We agree with that. So…

– But it sounds like a… It’s easy to say. I think a lot of people, and to be clear, even myself, like, I think we all feel surprisingly strong kind of psychological pull to kind of intertemporal internal consistency.

– Well, there are huge biases. Actually, one of the deep experts in what’s called the escalation of commitment cycle, Barry Staw, was a professor here for many years, and it’s a very, very treacherous bias. That consistency, people really worry about having an external image of consistency, and even maintaining consistency internally, because in some ways consistency describes the essence of who you are.

– Yeah, and look, I mean, presumably there is some set of things about which one ought to be consistent, right? And so, it’s maybe wrong to toss consistency overboard wholesale.

– Right.

– But tying your self-conception and identity to specific management practices seems like maybe over-constraining the action space.

– Yeah. Well, I mean, the countervailing force is an experimental mindset, right? Where you’re actually discarding ideas that aren’t working because they’re not working.

– Yeah. And again, maybe the fact that we kind of came from the middle of nowhere in Ireland, like, it was… One thing that is, I think, helpful, a lot of different cultures around the world have kind of some self-conception of grandeur, right? The French people, English people, say Americans, one could occasionally accuse them of that.

– What?

– One thing that’s great about Ireland is, we never have delusions of grandeur. And Ireland never thought of itself as, like, the best country in the world by objective criteria. And very fond of it, to be clear. And so, anyway, it wasn’t that hard for us to think, “Well, we know nothing about this domain, and we should assume that 70% of the things we try will turn out, ex post factor, would be mistakes.”

– Yeah. Yeah, yeah. Well, an interesting issue. So switching topics a little bit, there’s a lot of discussion about… Well, we used to think about hiring people for culture fit. In fact, my dissertation was on culture fit and understanding all about culture fit. And in addition to finding people who can do the job, you want to find people who resonate with the culture that you’ve created. But people are now talking about culture add, and ensuring that you’re not just fueling a kind of homogeneous mindset in an organization. And so, I’m just interested to find out where Stripe is on this balance.

– Well, I think this question’s really interesting at the meta level, where, “How do we have more variegated and kind of heterogeneous cultures across an industry and across a society around the world so that people can find the place where, yeah, that that place is me, right?” And actually, one of the things that I really like about the internet… Like, Stripe’s mission is to increase the GDP of the internet. There’s sort of a fundamental question of like, “Why should you be excited about that?” Like, kind of, who cares? And I think part of it is, that enables increased access to goods generally, where, for most people in most parts of the world, it’s pretty difficult for them to benefit from the set of goods and services that, say, we here in the Bay Area might be able to purchase. And again, growing up in Ireland, there were so many magazines or newspapers or whatever we would get, and there’d be little fine print, “Offer not applicable in the Republic of Ireland,” where it was printed for the U.K., but they hadn’t figured out the shipping mechanics for Ireland or something. So something I think about the, just about this, kind of this global extension, global access. But maybe a second order aspect of the internet that personally appeals a great deal to me is, I think we want a… I think a richer society, not in the kind of pecuniary financial sense, but in kind of a… In the second sense of the word, is one where there’s a greater array and more complexity of goods and services, and that variety is in more abundance. And if you can aggregate more demand via the internet, well, then it can make sense to serve some very narrow niches, right? And part of what I love about Stripe is, I’ll stumble upon so many businesses where I think, wow, like, I would never have thought that that could even be a business, right? You know, people, a marketplace for sort of user designed and user-created action figures, right? Or CRM for Boy Scout troops. And these things would never make sense if you just had a village or you just had a town. It only makes sense where you can aggregate sort of the entirety of the internet’s demand. So anyway, I think that this also, with respect to cultures and if one can only work in one of 10 businesses, well, they’ll probably all… Like, by necessity, they’ll probably all have something approximating the same kind of culture just by virtue… Like, there can’t be that much self-selection going on if there’s only 10 places. And I love finding organizations with just very unusual and places where the central limit theorem doesn’t apply. And I visited the folks at Jane Street not that long ago, and I really think Jane Street would not be for most people. I mean, it probably wouldn’t be for me, but like, for the people at Jane Street, it seems awesome, and they stay there so long. Right? And my wife’s a scientist, and as you get a sense for the cultures of different departments at a university, or even across universities, you realize, well, some of these have very unusual cultures. And again, probably not even for most scientists in that area, but right for a little group of people who can affiliate. So anyway, just to your kind of point about culture add, I think figuring out mechanisms by which we can enable more of that structural diversity kind of across the board. I think that’s really helpful.

– So turning to unique cultures, I want to come back to Stripe. And one of the cultural tenets that you have talked about as being, “Continually paranoid at the prospect that we might be forgetting something important.” So I’m wondering if you could give us an example of that tenant in practice, but also, how do you keep it from going too far, from being too paranoid?

– Can you be too paranoid? What do you think? Well, if one can be too paranoid, then we might have to reconsider some things. So… The thing that makes me so paranoid, and maybe this is kind of more idiosyncratic to Stripe, is again, just the… Like, we handle around $1 trillion a year, that works out to around 1% of global GDP. And again, there’s just kind of basic point that, if Stripe is unavailable, that’s a lot of people and a lot of businesses and a lot of activity that isn’t happening. And during the pandemic, DoorDash, Instacart, Zoom, and Amazon, and so many of what kind of felt like load-bearing pillars of society, they were handling their transactions with Stripe. And so, we feel this extremely… I don’t know, solemn kind of custodial responsibility to be able to provide uninterrupted service to them, the way that they ought to expect. And so, it’s less a competitive paranoia, and more paranoia that we’ll screw something up with respect to our obligations to them. And again, I don’t know if you could take that too seriously, but for us, it’s very weighty.

– So I have a question. I used to teach a case about John Reed, who decades ago was the CEO of Citigroup, and he was one of the first to use a kind of metaphor of the back office being like a factory. You use a metaphor of front office, back office, in finance being more like a bicycle, which I find appealing. I’m a cyclist. So what does that actually mean, and how does that influence how you make decisions and how roles are thought about within Stripe?

– Well, I’ve forgotten I said that, so thank you for… It’s a good metaphor. But… The thing we spend a lot of time thinking about is necessarily in organizations you… Or maybe necessarily is a strong word, but the bureaucracies haven’t worked that well. So it appears necessary with current organizational practices to have some kind of a hierarchy. And I don’t have a better idea. So let’s just kind of take that as a premise. That necessarily involves some logarithmic game of Chinese whispers and information loss sort of through transmission. And so, the picture that the people making the most important decisions may have, might be meaningfully divergent from that which is actually true. And so, the thing I’m always wondering about is, just, “How do I know what’s actually true?” And not just how do I know, but how do leaders generally across Stripe know what’s actually true? And so, we built our own internal project management software. And it’s less because we want to be able to kind of customize the animations. It’s more that we want, like… Because it is so important that we know what reality is saying that, we want to be able to kind of figure out the optimal way of surfacing that context. And I mean, it’s true to some extent in every organization, but I think it’s especially true in knowledge work and in the creation of… Like, software is an interesting thing, where there’s mining, where maybe there’s just some kind of linear elasticity between the number of people extracting the rock from the ground and how much rock is produced in the economic value, whatever. It’s very kind of tailor-en. And then, you have movie making or novel writing, where, if you’re a publishing house, you can’t just kind of measure your likely prospective success on the basis of just number of writers, right? Like, it’s so sensitive to the specific efficacy of every individual person. I think creating software is sort of, in an interesting way, halfway between mining and novel writing, where look, there is just… There is some scaling in the amount of work and one person could not build all of Facebook, or choose your service, but it’s definitely not linear. And for us at Stripe, even though decisions have to get made, the work is not being done by the decision-makers. The software engineers and the designers and everybody involved in… The partnerships people, whatever. In the creation of the product, they’re our authors. They’re the people actually creating Stripe, and everyone else is in some sense playing a supporting role. And so, I think it’s important to have that kind of inverted mental model in mind. And it’s not sort of a feel good thing, it’s just, it’s a deep truth. Like, I don’t know how many support staff work behind J.K. Rowling to enable the books to get published. But J.K. Rowling is the one doing the writing.

– Yeah, right.

– So I’m going to turn to another facet of the culture at Stripe, which has to do—

– Can we talk about J.K. Rowling, or is she canceled? Alright, OK.

– Not yet.

– We’ll let it slide this time. So—

– We’re at a business school.

– Yes, exactly. So the other facet of the Stripe culture I want to talk about is the writing dimension. And, of course, it’s becoming more pervasive now, but my sense is you were one of the early adopters of a writing culture. So tell us a little bit about where that comes from, and then, how you reinforce it.

– It’s kind of funny. I know what you mean. It’s kind of funny to consider oneself an early adopter of writing culture for true to form tablets. What do I say? Well, partly I think it comes from… We were just kind of misanthropic introverts in the beginning and we, even when there’s only four or five of us working on Stripe, we would just communicate a lot in written form because it’s kind of less oppressive than having to talk to each other. So part of it was just that kind of predisposition of early people. And to be fair, if I must include myself. Like, John, my co-founder is much more extroverted and charming, and usually, he’s kind of… It’s rare that I’m wheeled out for public engagements.

– He’s the front man.

– You can see why. So if John didn’t exist, it’s unclear whether Stripe would have any customers. But I do like writing, and I like reading. I think it’s like a… I found very… Bruno Latour has this piece about… And he overcomplicates it because you have to for that kind of work. But he has this piece about kind of immutable, I guess, mobiles since he’s French. And he kind of makes this point that the printing press is maybe correctly associated with the advent of the scientific revolution. But maybe the sort of simplistic sense, in which we might perceive the causality there as, “OK, we have the printing press, we can distribute more stuff, and now just people have more information, whatever.” They come to more insight. He makes the point that before the printing press, manuscripts were necessarily copied by hand. And in the act of copying by hand, obviously there’s the prospect of the introduction of error. And so that means, when you kind of encounter or confront some observation where there’s a disparity between that claimed by the work or by the theory or whatever, and what is it you see, you can’t really tell. Is it because the theory is wrong, or is it because there was some boring mistake made along the way, right? And it’s kind of when knowledge became more rigid that it became easier to break in a way that is conducive to the rejection of false theories and inadequate explanations. I found that very thought-provoking. And I think there is something to that. And obviously, this also gets the difference between oral cultures and literary cultures, where, I guess back to this idea of assuming that 70% of what we believe is wrong, if we don’t write it down, it’s going to be harder to remember what specifically we thought and what specifically we believed because our minds will play subtle tricks on us. And so, I think part of the value in writing things down is, our past selves look stupider. And that’s actually very adaptive because we’re like, “Oh wait, we had these beliefs, and just, clearly these two are not true.” And I think, yeah, that robustness through time makes it easier to find our flaws.

– I was going to say, as a sociologist at a business school, I’ve talked to lots of CEOs. This is the first time someone has brought up Bruno Latour in a response to a question. So very impressive.

– Yeah. I’m going to skip around here ’cause we want to get to the audience questions. So actually, Sameer and I have a podcast because, like, who doesn’t? And our second episode just dropped today, and it’s about… CEOs have been, lots of managers have been asking us about work schedules and remote work and hybrid work and what’s working. So since we don’t know the answer, we’re going to ask you. So I understand that Stripe’s remote workforce increased from about 20% pre-Covid to almost 40% now. Is that about right? Yeah. So I mean, how has this influenced the company? What differences do you notice? Is it what you’re expecting for the long term?

– Well, I think the right answer is probably quite scale dependent and like, with Stripe now being 7,000 or 8,000 people, we can’t all fit in the same room regardless, no matter how draconian our in-office policy, right? And furthermore, we serve businesses and employ people all around the world. And so, we’re necessarily somewhat remote in that sense. Like, there is no universe in which we’re not having lots of Zoom meetings, just because of the globally distributed nature. And then, so the question is more something around the exact nature of the interactions we want people to have in the course of their day, but not, again, whether they’re conducting a lot of work that is distant from their colleagues. And so, I think for a large organization for whom that’s the case, there are considerable benefits to in-person work, just for boring reasons… I mean, everyone, this becomes such a religious debate, but I think there’s… A bunch of the kind of precepts are, I think, fairly uncontroversial. Like, there are some people who are really effective and really enjoy working in their cave. I think I would probably be one of those people, and sadly, I’m not in a role where that makes sense. But some people are, and that’s great. Other people, they get really bored, and they go, they get cabin fever, and they really want to be around other people. And just like, those people exist as well. And society probably has some mechanism for the provision of employment for both categories. It’s probably a significant efficiency gain to have more options for the kind of, the cave dwellers, the people who just want to sort of sit in the room and do the work by themselves. Again, like me. And then I think there… You have to think about it kind of longitudinally, where there’s a question of skill and culture and knowledge transmission. And so, I think some of the analyses that look at kind of short-term efficacy, they… I mean, that’s interesting, but I think you have to take… Ideally, you have to take a kind of a full life cycle view. And I think that sort of the cohorted change over a workforce. And Berkeley has a pretty strong culture, as I understand it. And they’re like, if Berkeley went remote, maybe Berkeley would be fine like next week or next month. But the idea of like four, 20 generations of Berkeley students being remote, I have to think that culture would at least be different, right? So yeah, I think all those considerations apply, but maybe relevantly for this room, I don’t know, I do notice that the 10-person, the 20-person, the 50-person companies, for whom being in room together is an option, the ones that exercise that option really seem to do better. And I think we all even intuitively kind of know it, where… I often ask parents, like, if your kid was considering two different jobs, one is kind of fully in person, resolutely five days a week, and one is kind of loosey goosey or fully remote or something, which, with your kid’s best interest in mind, which would you advise them to take? And no parent that I’ve asked has ever hesitated in answering that question.

– That’s right. OK, so, yeah.

– So I have the honor of doing the audience questions as well as my own. So—

– Austin, you want to introduce yourself?

– Sure, yeah. So I’m Austin Schoff, I’m a second-year MBA, I’m also a member of the Dean’s Speaker Series board. I think the first question we want to start with is the future of money movement. What do you think will happen? Will it be more real-time payments? Will it be more crypto type transactions? Will it still be T+2, and we’ll be stuck using Swift for eternity? What do you think is the future of money transactions and money movement?

– I think the short answer to your question, like, to each specific sub-question you asked, I think the answer to each one is yes, except maybe the T+2. But so, first off, the U.S. is actually one of the places in which payments are changing the slowest, where across most other… Not most. Many other major markets around the world, there’s been enormous changes over the last 10 years or so. So obviously, UPI in India. Everyone knows WePay and Alipay in China. But those are kind of famous ones. But like, Pix was launched in Brazil in 2020, and within two years, the majority of the Brazilian adult population was a weekly active user on Pix. It’s kind of UPI for Brazil. There’s Swish and TWINT in Sweden and Switzerland, respectively. And a whole host of schemes like this across in… Malaysia has its own. Japan is now finally starting to change pretty rapidly. So it’s happening, is the short answer. The Ron Paul GIF. And then, crypto, I think that… I mean, there’s kind of a fundamental question for crypto, like, these different lenses of analysis of store of value or some kind of risk hedge or kind of are talking like a means of exchange. But as a means of exchange, I think you should probably further disaggregate between stable coins and like, crypto crypto. I think the stable coin thing is happening, and the absolute numbers are sold reasonably small, but not that small. I think the outstanding tether volume is now, like, in the order of a $100 billion or so, like, it’s not nothing. And then, given the existence of stable coins, it’s not totally clear to me why you would ever use Bitcoin or some other kind of less convenient currency for a medium exchange. And Swift will still be a useful technology for interbank settlement, as it was initially designed. Or forfeiture was initially designed. And T+2, it’ll probably shrink, but you do have to… I mean it’s interesting to look at with FedNow in the U.S., this kind of new real-time payment scheme in the U.S. that has only kind of partially rolled out support, but we’re already starting to see that having instantaneous transactions… What about scams? What about fraud? What kind of oversight is possible? So it’s not a totally free lunch. And Bitcoin, of course, acolytes not unjustly, because for certain use cases this is important, but they often celebrate the fact that transactions are instant and irreversible. We also see some of the downsides of that with respect to other activities. But it’s all happening.

– Next question I want to hit on, how do you deliver constructive feedback while maintaining trust, especially given that a mistake in your organization could be the loss of a couple billion dollars depending on scale?

– I think people really want to… I think they really want to know what is… What is their interlocutor’s authentic view of them? And I think loss of trust doesn’t come from constructive feedback but comes from a divergence between what’s true and what you’re saying is true. And so, I would almost kind of invert it where it’s like, well, if you’ve constructive feedback and you’re not telling them, I think you’re really undermining trust. And, look, this is… I don’t know if it’s possible to teach giving good feedback. I haven’t heard of it being taught well anywhere. Maybe it is, I’m not saying it’s not. But I think it would be a very valuable skill to teach if, in fact, it can be taught well, and some of the people at Stripe… There’s, in fact, I think, even a causal relationship, a causal positive relationship, where the people at Stripe with whom I feel the greatest trust are, to a significant extent, those who give me the most critical feedback. And maybe just even kind of knowing… Like, maybe that fact should just be like on a billboard. Not about me, but just that these things, in fact, can go together.

– Could you talk a little bit about Stripe Climate and how we should think about your commitment to carbon removal as part of Stripe’s long-term goals?

– Yeah, so… If you look at the IPCC forecasts of what’s going to happen to the Earth’s climate over the course of the 21st century, basically, we’re going to significantly overshoot any reasonable target. Two, two and a half degrees, whatever. Unless we remove a significant amount of CO2 from the atmosphere, because the problem where, even if we fully decarbonize the economy, all the CO2 molecules, they don’t know about that. Like, they’re still there. And so, there’s this kind of overshoot and overhang, and we were looking at these IPCC reports a few years ago, and all companies are sort of announcing their sort of fancy climate whatever. And many of those are good and come from a good place, but not all of them are, and a lot of companies are pursuing kind of carbon offsets that we think are… Like, are just fundamentally kind of, almost necessarily fraudulent. Like, I think they’re fraudulent, they almost couldn’t not be, even if you were trying, where you’re kind of paying for counterfactuals and you’re like, “OK, well, I will not cut down this forest, please pay me.” But it’s like, were, are you going to cut down that forest? Like, how could anyone even know that, right? So anyway, we’re reflecting on those IPCC reports, and then kind of thinking about corporate programs in the context of climate generally. And I mean, because of this kind of precision rigor thing, we hate doing something that’s… Inauthentic is not quite the right word, but, if we say something, we want it to be literally true. And doing something kind of just for show really kind of rubs us the wrong way. So anyway, we noticed that no company in the world as of 2018 had ever purchased commercial carbon removal. So removal is totally different to offsets. Removal is like, I will give someone some money, and they’re going to have to bring back some actual CO2 molecules. But there’s this kind of, this proof of work involved, and more importantly, the molecules are no longer in the atmosphere. So no company had bought from any of these companies today. There were, or back then, there were, I think, only two companies even in operation. We thought, “Well, this will have to become a sector.” Again, the IPCC reports show you that. Like, they say we’re only not screwed if we remove a lot of CO2. And so, we thought maybe it’ll be helpful if we kind of… I mean it’s not like Stripe is Microsoft or IBM or something. Like, we’re not the most blue chip, legitimate, or legitimizing buyer you could have, but we’re something at least, and so, maybe it’d be helpful to these companies if we started to purchase from them. So we started to buy from them in 2018. Our first transaction was for $1 million of CO2. And kind of based on that, and learning more about the sector, we were very fortunate to have some really terrific people join. And they cooked up this really incredible AMC, the second-ever large-scale AMC. So AMC stands for advanced [market] commitment. And the idea is, you pre-commit to purchase something, something that doesn’t currently exist, as this was first pioneered for vaccines where there are all sorts of conditions we want to vaccinate people for, but like, the vaccines literally don’t exist. Of course, the vaccine manufacturer, the scientists or whatever, there’s market risk for them where it’s like, well, if I invent it, will anyone buy it? And so, this is a way to try to kind of bridge that gap. Worked quite successfully there. Gavi was the program. And so, we decided, “Hey, let’s do the same thing for carbon removal, where we want more of these companies to exist. We’ll pre-commit upfront to purchase $1 billion of carbon removal, at any price, from whoever will come along and sell it to us.” And so, we assembled a coalition that includes Meta, Alphabet, McKinsey, JPMorgan, a host of other companies, but Stripe committed the largest amount to it. And gosh, we’ve now, I think, purchased from on the order of 40 companies or so. And the stat that I’m proudest of is that, in most cases, we are the company’s first-ever customer. And so, we’re not like coming along to somebody who, we’re their thousandth customer, it’s already validated. Kind of, we’re through frontier, this organization kind of sticking our reputation on, “Hey, we think this technology is legitimate, we think it has promise, we’re going to contract with you today, and hopefully you can now use that contract to sell to others, and so forth.” So anyway, it’s early days. Most of the CO2 is still in the atmosphere, so it would be premature to declare any kind of victory. But some of the companies are now actually removing it, and yeah, we’ll see how it goes.

– How do you think technologies like Stripe can help businesses in developing markets, maybe even in places where internet connectivity is not as strong as it could be? What do you think the future is for the developing world?

– I think the… Well, I think the internet access problem is pretty quickly being solved, in that… Like, over Thanksgiving, I went to Brazil, and I was on a little boat on the Amazon, and I had perfect 3G reception. Across most… Like, India thanks to Reliance Jio, data is becoming super cheap in the most populous country in the world. And there’s kind of versions of this story playing out in so many places. So I don’t worry too much about the provision of internet problem. I think the… Look, I think the internet is… Is one of the most important technologies ever created with respect to the enablement of global development. And so, I was born in Ireland in 1988, and when my parents who were born in Ireland, Ireland was a kind of, was a deeply impoverished theocracy, and the Catholic Church kind of ruled with an iron fist, and we were a very kind of mercantilist socialist, closed little enclave. And there was a great deal of interest in sort of, how could Ireland be the… How could things in Ireland be working so badly? We’re right there next to England, why is Ireland so bad? And it turns out that it was bad policy. And some enlightened people like T.K. Whitaker and others, they proposed that, “hey, if we reformed and reconfigured ourselves in a kind of more free market direction, that good things could follow. And there was some propitious timing, where the EU came along, and we joined it, and American multinationals set up operations in Ireland. We benefited from that and so forth. But hey, point is, between when I was born in ’88 and when I left for college in 2006, Ireland had, I think, the fastest economic growth of any country in the world. And you can’t grow up around that and kind of fail to internalize the, like, the moral importance of economic growth. And it’s kind of avant garde, here in the U.S., the Bay Area, rich places, just sort of degrowth and the ills of capitalism, whatever. And for places that are already extraordinarily prosperous, I understand how it might be difficult to perceive the underlying imperative there. But having kind of seen some of the kind of… The longitudinal difference, it’s… And I’m sure many of you have kind of versions of this from your lives. The criticality is very apparent. And so, anyway, Stripe’s mission is to grow the GDP of the internet. And we think about this a lot with respect to those emerging markets where… There’s only one technology that we’ve ever found to enable impoverished places to become, or at least to get on the trajectory to kind of full developed world status. And that is a free market economy connected and integrated with the rest of the world. And Stripe’s obviously not going to solve that, but if we can play a very small role in enabling those transitions, we’ll feel good about that.

– Amazing.

– Fantastic. Are you done?

– We have one final question.

– OK, one final.

– Are there any founders that you strive to emulate? And then, conversely, are there any founders who give you the ick?

– We won’t tell.

– It’s not recorded or anything.

– Exactly, not being livestreamed. So… Look, it’s hard to single out individual founders. I think that, I mean, which, look, it’s kind of a bland answer, but also true. I mean, I’m kind of partial to… I mean, we culturally know a lot about the present day founders, right? I think it’s kind of interesting that the founders of kind of generations past, and like, not that many generations past, are so much less culturally conspicuous. And so, sorry, this is now going to become an infomercial, but there’s a book Stripe Press published called “The Big Score” about the semiconductor industry, primarily in Silicon Valley, in the ’70s and the ’80s. And those characters and firms like National Semiconductor, and so on, they’re kind of forgotten today. But they were incredibly impressive. Or Cypress, these sorts of businesses. And so, I found it fun to learn from them and to see kind of what’s similar, what’s different. And then, I don’t know, I really enjoy kind of founder-like personalities from non-startup domains, and just kind of, again, both the sort of the compare and the contrast. And so, a guy who really inspired me growing up was Ed Walsh, who started the University of Limerick when he was 31. And nobody… Limerick is a very small city in Ireland, and nobody at the time really thought that Limerick even deserved a university. And he couldn’t persuade anyone to kind of let Limerick have a university from Day One. And so, it was a national institute of higher education. My dad was actually in the first year of students there. But then, eventually acquired kind of full university status. But like, I don’t know, he was a 31-year-old, who before that was living in the U.S. and decided like, screw it, I think Limerick should have a university. And over the course of several decades, really realized that vision in an extraordinarily impressive way. So, I don’t, I like finding those personalities from the nontechnology domain.

– Yeah. Well, thank you Austin. Those were terrific questions. Patrick, a whirlwind of insight and things… Yeah. Citations—

– That was so disorganized that I’m having trouble even summarizing it.

– No, no, no. Well, you began with Ireland, and you ended with Ireland. I think it’s completely appropriate. We are so grateful for coming to share your thinking. We hope you will come again sometime soon. But let’s offer Patrick our deepest thanks for coming out.

– Thank you very much.

– Fantastic. And thank you all for coming. We really appreciate you attending. We hope you got a good lunch and lots of mushrooms, I think. We’ll see you again soon. Thanks everybody.

– Thank you. Of course, that was fun.

– Yeah, that was amazing. That was so fun.

Corporate sustainability reporting will move forward despite uncertainty, experts say

Viviana Alvarez Sanchez, former head of sustainability for Unilever North America, moderates the opening panel at the CFRM conference.

With the Securities and Exchange Commission’s long-awaited climate-disclosure rules blocked by litigation, public companies will continue to operate with a patchwork of laws and standards on sustainability reporting for the near future. 

But the consensus among the investors, corporate sustainability officers, accountants, CFOs, and standard setters who gathered at Haas in March was that markets have already moved,  with thousands of companies already disclosing information about their carbon emissions and climate risk exposures. In fact, many public and private companies are subject to new reporting regulations in California and the European Union, and investor pressure for increased transparency on climate risk disclosures and other sustainability issues will only continue. 

“We’re in a time of regulatory and macroeconomic uncertainty, but that does not mean corporate sustainability reporting is not marching forward,” said Professor Panos N. Patatoukas in his opening remarks at the CFRM 27th Conference on Financial Reporting. “What we measure is what we treasure. My hope is that improved measurement will lead to more efficient allocation of capital in society, which could, hopefully, accelerate the transition to a more sustainable economy.”

Professor Panos N. Patatoukas, faculty director of the Center of Financial Reporting Management (CFRM) and co-faculty director of the Sustainable and Impact Finance Initiative at Berkeley Haas.

The March 20 conference, organized by the Center for Financial Reporting and Management, was titled “Corporate Sustainability Measurement & Reporting: From Whether, to How.” It was co-hosted by the Sustainable & Impact Finance (SAIF) initiative. 

Former Haas dean and Professor Laura Tyson, former chair of the Council of Economic Advisers and a senior advisor to SAIF, gave opening remarks that stressed the importance of consistency for both companies and investors. 

 “This is incredibly important and it’s all happening right now,” Tyson said. 

Laura D. Tyson, professor of the graduate school and former Berkeley Haas dean

Tyson noted that in the United States, the discussion tends to be about actions that companies take that may have a financial consequence for investors—known as financial materiality. While materiality is the focus of the SEC’s proposed rules, it’s just one part of the discussion, she noted: The second part is non material items that may be important to society or shareholders.

“We have had for a very long time, organizing our financial markets, a set of acceptable standards for traditional financial measures,” Tyson said. “Every firm has to apply them. Every accounting firm has to make sure firms apply them. We need something like that in the standards for sustainability. I think we’ll get there, but Europe may get there before us.”

 The company perspective

The first panel of the day focused on companies’ perspective, featuring Joe Allanson of Salesforce, Claire Boland of Joby Aviation, R. Paul Herman, CEO of impact investing firm HIP Investor, Sydney Lindquest, ESG director for energy services company SLB, and Douglas Sabo, former chief sustainability officer for Visa.

“Concerns by society quickly turn into shareholder concerns,” Allanson, Salesforce’s EVP of Finance ESG, noted. 

One effect of the increased focus on sustainability disclosure is that accountants have had to move outside their traditional silos, communicating across companies more widely. He joked that the array of new rules from the SEC, California, and the EU amounts to a “full employment act for accountants.”

Assurance and verification

A panel on assurance included (from left to right) Anita Chan of KPMG, Marie Hache, ESG Partner at PwC, Deloitte Partner Laura McCracken, Mallory Thomas of Baker Tilly, and (not pictured) Trip Borstel of EY. They emphasized the importance of building trust through reporting that is relevant, reliable, and verifiable. 

The panelists emphasized the need to restore trust with a global baseline of corporate sustainability reporting that uses standardized measurements and definitions. 

“We’ve been on a journey, and the next five-to-eight years are going to be really interesting in terms of what happens with the SEC rules and the legal issues,” McCracken said.

Chan echoed Patatoukas’ remarks: “You can’t manage what you can’t measure.”

The panel discussion also highlighted the need for corporations to develop processes, incentives, and governance mechanisms that integrate traditional financial reporting with sustainability reporting.  

Andy Behar, CEO of As You Sow (above left), served as moderator. “Hope is not a strategy. We are starting to get action,” he said. 

Setting standards

Berkeley Law Professor Stavros Gadinis moderated a discussion on standard setting that included Verity Chegar of the International Sustainability Standards Board (ISSB), former U.S. Department of Energy advisor Kate Gordon, and Katie Schmitz Eulitt, of the International Financial Reporting Standards (IFRS) Foundation.

Despite the fear that we’ll end up with separate sustainability reporting standards—imposed by the SEC, the EU, and California—the panelists agreed that convergence on reporting standards is in everyone’s interest.  

“This is a global issue that doesn’t happen within boundaries,” said Gordon, who served as senior advisor to both U.S. Energy Secretary Jennifer Granholm and California Gov. Gavin Newsom. “There does need to be consistency for companies since they can’t parse the different rules.

Asked why climate risks should be singled out in audit reports above other risks—such as cyber threats or policy changes—Gordon emphasized that “climate risk is different because the risks are known, and they are predictable. They are already in the atmosphere from things we did 50 years ago or more.”

Even the election outcome won’t likely turn back the movement toward more disclosure, Schmitz Eulitt said. “Let’s just inhabit a world where the climate rule gets thrown out. My instinct is that if it’s a material issue, you have to disclose it. Investors are asking for it,” she said.

Gordon (center), with Chegar (left) and Schmitz Eulitt (right)

Investors’ perspective

The last panel of the day focused on the investors’ perspective and included Nuveen Senior Director Anthony Mark Garcia, Jonathan Hudacko, MBA 01, personal investing principal at Vanguard, Jamie Nulph, MSCI’s executive director of climate and sustainability, Anne Simpson, Franklin Templeton’s global head of ESG, and State Street’s Karen Wong, global head of ESG investing.  Patatoukas served as moderator.

Patatoukas emphasized that “climate risk, which includes both physical risks from environmental changes and transition risks related to moving towards a lower-carbon economy, is increasingly acknowledged as a significant investment risk.”

Wong said reporting standards are critical as more investors ask to incorporate sustainability metrics explicitly into their portfolios. “We have some investors who really care about climate change risk,” she said. “I think it’s important to provide a choice for investors. It’s their money, not ours.”

Asked about the strategy of divestment versus engagement, Simpson, who also teaches MBA, MFE and undergraduate classes at Haas, encouraged students who want change to embrace the complexity of the moment. “If you want to feel pure, roll up your sleeves and walk away,” she said. “If you want real change, you have to roll your sleeves up and get involved.”

Meredith Albion, FTMBA24 (right), worked for a credit ratings firm before attending Haas. She has focused much of her time at Haas on sustainable investing. She is currently a student principal of the Haas Sustainable Investment Fund and is a member of the SAIF Student Advisory Board.

Berkeley Haas experts launch ‘The Culture Kit’ podcast with insights to improve workplace culture

A man and woman sit at a table wearing headphones and speaking into podcasting microphones.
Photo: Jim Block/Berkeley Haas

Berkeley, Calif.—The world of work is a work in progress. Hybrid work arrangements, emerging AI tools, ongoing layoffs, and an increasingly diverse pool of workers who want a voice and a sense of belonging at work—managers have a lot on their plates.

Illustration shows a toolkit with monkey wrench, tape measure, level, and clue. Text reads The Culture Kit with Jenny & Sameer.In their new podcast “The Culture Kit with Jenny & Sameer,” organizational culture experts Jenny Chatman and Sameer Srivastava tackle questions from business leaders wrestling with the seismic changes underway in the world of work. 

Chatman and Srivastava are professors at UC Berkeley’s Haas School of Business who have dedicated their careers to studying and advancing workplace culture. In each 15-minute podcast episode, they draw on the latest academic research and their years of experience advising organizations around the world and share concrete strategies to improve workplace culture.

“What I’m most excited about with this podcast is that it brings together the worlds of academic research and industry practice,” says Srivastava, the Ewald T. Grether Professor of Business Administration and Public Policy. “Here, we get to take a deeper dive into a specific problem raised by a specific leader and really workshop it together.”

“Here, we get to take a deeper dive into a specific problem raised by a specific leader and really workshop it together.”

The podcast is an extension of the work that Chatman and Srivastava started six years ago when they launched the Berkeley Center for Workplace Culture and Innovation to bring emerging insights from academic research to business practitioners. 

“With our new podcast, we hope to expand the reach of the work we’ve been doing through a new medium with the goal of reaching more people,” says Chatman, Paul J. Cortese Distinguished Professor of Management and Berkeley Haas associate dean for academic affairs. “Business leaders can submit culture ‘fixit tickets’ laying out the topics on their minds. Our goal is to give them actionable steps they can take to improve their organization’s culture.”

Season 1 of The Culture Kit with Jenny & Sameer launched today and includes thoughtful questions from industry leaders such as WD-40 CEO Steve Brass, Hubspot CEO Yamini Rangan, and former Google SVP of People Operations Laszlo Bock. New episodes will be released every two weeks on major podcast networks.

The Culture Kit with Jenny & Sameer is a production of the Haas School of Business, the Berkeley Center for Workplace Culture & Innovation and Professors.FM, a new podcast network helping you make sense of the world with top scholars. Professors.FM is a collection of scholar-hosted shows that bring insights from research and make them relevant to today’s world.

About the Haas School of Business

As the second-oldest business school in the United States, the Haas School of Business at the University of California, Berkeley has been questioning the status quo since its founding in 1898. The school is one of the world’s leading producers of new ideas and knowledge in all areas of business. Located within the world’s top public university, Berkeley Haas is at the heart of what’s next in the Bay Area’s rich innovation ecosystem. Learn more about our six degree programs, our exceptional faculty members—including two Nobel Laureates in economics—and our community of big thinkers:

About the Berkeley Center for Workplace Culture and Innovation  

The Berkeley Center for Workplace Culture and Innovation aims to usher in the next generation of organizational culture research, one that draws on a wide range of data sources and computational methods to uncover different facets of culture within and across organizations and industries. The center partners with organizations and academics from a wide diversity of disciplines and industries to lead these efforts, with the ultimate goal of leveraging research insights to help organizations function more effectively and advance academic understanding. The Culture Connect Conference, held in January each year, convenes leading academic researchers studying organizational culture and company leaders to deepen the dialogue about how to address culture-related challenges. Lean more about the Berkeley Center for Workplace Culture and Innovation


Laura Counts, [email protected], 510-643-9977

New center aims to create healthcare innovation research-to-impact pipeline

The Center for Healthcare Marketplace Innovation aims to shape the future of AI in healthcare through groundbreaking economic research, data partnerships and more.

Associate Professor Jonathan Kolstad will serve as faculty director of the new center (Photo: Copyright Noah Berger / 2023).

UC Berkeley experts are developing a trailblazing infrastructure to translate cutting-edge AI and behavioral economics healthcare research into powerful real-world advances in patient outcomes and drastically reduced medical costs.

The Center for Healthcare Marketplace Innovation, announced today by the College of Computing, Data Science, and Society and the Haas School of Business, will act as a force multiplier for top-tier technological innovation and economic insights. Developing and using the research on healthcare innovation incentives will lead to the creation and deployment of interventions that meaningfully improve public health.

Artificial intelligence (AI) is widely expected to transform healthcare. The new Berkeley center aims to play an essential role in ensuring those innovations benefit the public. AI tools could enhance care quality by, for example, helping triage patients in emergency rooms, diagnosing diseases and coaching clinicians. These technologies can also help reduce the 15% to 30% of health care spending that goes towards administrative functions each year, said Jonathan Kolstad, the center’s faculty director. That means up to $250 billion less in annual spending and more time focused on improving patient care. Still, this moment also carries risk.

“AI is going to be central to healthcare delivery in 10, 15 years from now,” said Kolstad, a professor of economic analysis and policy at Berkeley’s business school. “We’re at this inflection point. By understanding the technology, the systemic incentives and the human abilities in the healthcare system, we have a tremendous opportunity to help shape those dynamics.”

“We’re at this inflection point. By understanding the technology, the systemic incentives and the human abilities in the healthcare system, we have a tremendous opportunity to help shape those dynamics.” —Professor Jonathan Kolstad

“I think it matters whether and how those tools get built to actually enhance care delivery and help patients, and whether they are built in equitable, ethical ways because they’re started in places like Berkeley,” he said.

The center’s faculty are the right experts to lead this charge. Kolstad and faculty affiliates like Ziad Obermeyer are already award-winning academics in their respective fields, founders of healthcare innovation startups, and experts called upon by California and federal leaders to inform healthcare policies and regulations. Obermeyer is an associate professor at Berkeley’s School of Public Health.

This expertise enables them to build unique research and data resources and foster interdisciplinary incubation and industry and policy collaborations. Berkeley’s all-around excellence amplifies their potential impact. With connections to ambitious initiatives like the UC San Francisco-UC Berkeley Joint Program in Computational Precision Health and the open platforms initiative recently launched by CDSS, the new center can support other leading thinkers in moving their research from breakthrough papers into impact for public good. 

“Berkeley’s leadership in disciplines across computing, public health and economics and dedication to making real-world impacts make it the obvious home for this exciting initiative,” said Jennifer Chayes, dean of the College of Computing, Data Science, and Society. “The Center for Healthcare Marketplace Innovation will enable those at the intersection of healthcare economics and policy to join together with clinical and computing researchers to redefine success in healthcare outcomes.” 

“Harnessing AI to make our healthcare system work for people and ensure patients get better care requires a truly interdisciplinary approach,” said Ann Harrison, dean of the Haas School of Business. “I am very excited to see some of Berkeley’s great minds and cutting-edge resources come together at the new Center for Healthcare Marketplace Innovation.”

The center’s foundational development was made possible through a generous philanthropic donation by an anonymous thought partner. CHMI will be housed within the Institute for Business Innovation at Berkeley Haas.

A ‘bench-to-product’ runway

As society shifts to a new era of healthcare where AI plays a larger role, understanding human decision-making will remain central to discovering and applying useful solutions. The center aims to connect expertise in behavioral economics with the advanced research and development being executed at Berkeley to help develop healthcare solutions that people and companies want and will harness.

The center will focus on three pillars: conducting research to advance the science of innovation incentives in healthcare; encouraging interdisciplinary collaboration on projects and solutions; and partnering with healthcare providers, insurers, government agencies and others to test and refine the novel interventions.

Kolstad hopes this will be the “bench-to-product runway” that the increasingly technical and interdisciplinary AI, computer science and behavioral science need to be translated from research into impact.

“There’s a lot of really cool computational stuff happening, but it’s being built with very little understanding of the actual function of the healthcare system – of the complicated incentives of what it would take to have an algorithm, a prediction model, a solution be deployed to really change either healthcare outcomes or costs,” said Kolstad. “This kind of center that works to bridge these mechanisms can be very, very influential.”

“We want to take all of this intense energy and interest in AI and health and make sure that’s turning into benefits for patients and for the healthcare system.” —Ziad Obermeyer

Obermeyer’s work offers a blueprint of what the center’s impact could look like in practice. Through his research, Obermeyer found there was a need to improve physicians’ diagnoses of a patient’s probability of heart attack, an action that can trigger tests and other urgent care. Working with a major healthcare system, he developed an algorithm that could support doctors in emergency rooms as they screen patients and make crucial life or death decisions.

But will that algorithm work in practice? Obermeyer intends to find out. He’s now conducting randomized trials to see if the machine learning method he developed for an academic paper can become a real-world medical solution used in emergency rooms.

“We’re seeing so many papers come out in this area. I don’t think we’ve seen the impacts we want to see from those academic projects,” said Obermeyer, an affiliated faculty member of the Computational Precision Health program. “I think it’s because of that different skill set and because of the difficulties of translating academic ideas into the world.”

“We want to take all of this intense energy and interest in AI and health and make sure that’s turning into benefits for patients and for the healthcare system,” he said. 

Increasing access to industry data, feedback

The Center for Healthcare Marketplace Innovation is just getting started, but already its docket is stacked with ambitious projects. 

For example, the center is close to signing multiple large-scale, multimodal data access agreements with healthcare partners. The data is typically tightly held, and it can take years for academics to access it, Obermeyer said. That limits what research can be done to tackle health problems and the usefulness of related AI, which is only as good as the data it has access to train on, he said. Making it easier to access that data – and keeping it secure and used ethically – will unleash possibilities for research and impact in computational health. 

The center is also setting up an industry feedback platform, where large healthcare providers and others can share with researchers what problems they’re trying to solve for their patients, clinicians and systems. This input could lead to research and provide on-the-ground insights to inform the center’s efforts.

Additionally, the center will soon begin piloting a new generative AI model that offers clinical coaching to medical professionals. And it’s hosting an economics and policy conference – the Occasional California Health Economics Workshop – on March 8. 

These initiatives offer a glimpse of the new path forward the center is trying to create at Berkeley for this research, these industries and society.

“The future of AI and healthcare needs behavioral incentives, technological breakthroughs and data,” said Kolstad. “We’re working to bring those together.”


This article was also published by the College of Computing, Data Science, and Society with the headline “New center aims to create healthcare innovation research-to-impact pipeline.”

Media contact:

Laura Counts, Haas School of Business, [email protected]


Economist Thomas Marschak, UC Berkeley researcher and teacher for 60 years, dies at 93

Professor Emeritus Thomas Marschak, an economist who influenced generations of students during almost 60 years of active research and teaching at Berkeley Haas, passed away Jan. 31 at his Oakland home. He was 93.

Professor Tom Marschak (Photo: Jane Scherr)

Marschak, the Cora Jane Flood Research Chair Emeritus, was known for his dry humor, his generous mentorship, and his research into the design of efficient organizations.

“In so many ways, Tom was way ahead of his time,” said Professor Rich Lyons, UC Berkeley Associate Vice Chancellor for Innovation & Entrepreneurship and former dean of Berkeley Haas. “When you think about the center of gravity of his work—the informational and incentive aspects of the design of efficient organizations—you realize quickly that these topics are becoming ever more important.”

As a member of Haas’ Economic Analysis & Policy Group and Operations & IT Management group, Marschak continued his boundary-spanning research into his 10th decade. Just two weeks before his death, he had a paper accepted to the Journal of Institutional and Theoretical Economics.

“Tom was one of the sharpest, most insightful, and most admirable economists I have ever seen,” said Dong Wei, PhD 20 (economics), an assistant professor of economics at UC Santa Cruz who co-authored the recent paper with Marschak. “He had a tremendously successful academic career, and at the age of 90, he was still developing novel research ideas, conducting economic analysis with advanced mathematical tools, and writing academic papers with extreme rigor and clarity.”

“In so many ways, Tom was way ahead of his time. When you think about the center of gravity of his work—the informational and incentive aspects of the design of efficient organizations—you realize quickly that these topics are becoming ever more important.” —Professor Rich Lyons

Fleeing Nazi Germany

Marschak was born in Heidelberg, Germany, in 1930. His father, Jacob, who was Jewish and from Kyiv, Ukraine (then part of Russia), was a notable figure: As a 19-year-old student opposed to Lenin and the Bolsheviks, he served as labor secretary in a separatist republic in the Caucasus that lasted less than a year. When the Bolsheviks prevailed, Jacob Marschak—who went on to become a prominent economist—fled to Berlin. There, he met Tom Marschak’s mother Marianne, a journalist who earned her PhD and became an influential psychologist, developing the Marschak Interaction Method for observing the relationship between caregivers and children.

Although Tom’s early life in Germany was sunny, the looming threat of Nazism cast a shadow. In 1933, when Tom was 4 years old, his father insisted they flee to the United Kingdom. It was a prescient move as the family escaped the horrors of the Holocaust.

Marschak spoke about his father’s foresight in an oral history he recorded in 2005. “That was amazing foresight because all the other Jewish people with that kind of position said, ‘It’ll pass, it’s nothing, it’s a civilized country,’” Marschak said in the oral history. “He knew better.”

Tom Marshak in Canada in 2017. (Photo courtesy of Merideth Marschak)

In England, Jacob Marschak was made a fellow of All Souls College at Oxford University while young Tom and his sister were put into school—taught in English, a language he had to learn quickly. In 1939, as the war spread, the family decamped to the United States. As they were not British citizens, and Germany had withdrawn citizenship from Jews, they were stateless for a time. Still, with the help of Tom’s father’s academic friends, they settled in New York, where Jacob Marschak took a position at the New School for Social Research.

In 1943, the family moved to Chicago, where Marschak went to University High School—an experimental school attached to the University of Chicago where students could graduate high school in 10th grade and get a bachelor’s degree by 12th grade. The Marschak home during that period was host to a circle of prominent émigrés, including Leo Szilard, the physicist who discovered the nuclear chain reaction process; atomic physicist Hyman Goldsmith; violinist Isaac Stern; and Edward Teller, the father of the hydrogen bomb.

By age 17, Marschak was a college graduate, with honors. He landed on economics as his field of study and headed to Stanford for his doctorate, followed by a job at RAND Corp. in Santa Monica under Charlie Hitch (later president of the University of California).

In 1960, he was hired as an associate professor at Berkeley Haas. “Things were very different then,” he recalled later. “You dressed in a white shirt and a tie, I can’t believe that. I was one of the very first to grow a beard—almost unheard of.”

Marschak lived in Berkeley with his first wife, Dorothy, and their children Debbie, Madeline, and Timothy. In 1968, Marschak’s life was scarred by tragedy when his eldest daughter Debbie, age 10, died in a car accident.

In 1979, he remarried, and he and his wife Merideth had sons Anthony and Daniel. He was a devoted and deeply involved father. “He took us to film festivals, summer backpacking and river trips, enrolled us in summer programs, monitored our education, and kept us in close contact with his side of the family,” recalled daughter Madeline Marschak. “He offered all four of his children unconditional love and support equally. …Tom Marschak was my hero and the best father anyone could hope to have.”

Academic boundary spanner

Academically, Marschak made his mark in economics theory, studying information gathering, information technology, and network mechanisms—complex work that was ahead of its time, Lyons said.

“Tom was an intellectual boundary-spanner from the get-go, having spanned two academic groups at Haas and having spanned in his work even more areas than these two groups traditionally have done,” Lyons said. “His work covered IT, data science, use of data to drive enterprise value: These are some of the defining issues of our current time.”

Marschak was the co-winner of the Koç University prize in 1996. He was an elected fellow of the Econometric Society and the recipient of both a Fulbright-Hays research award, a Guggenheim Fellowship, and a Ford Foundation faculty research fellowship.

“Much of Tom’s work addressed foundational issues of organizational design, such as how the degrees of hierarchy or decentralization affect an organization’s communication costs and ability to achieve its objectives,” said Professor Emeritus Michael Katz, Sarin Chair Emeritus in Strategy and Leadership. “Although this work was abstract, it has important implications for business organizations.”

‘Dry and delicious humor’

A woman with short gray hair and black dress smiles at the camera. A man in suit jack sits at a table holding an hor d'oeuvres on a skewer.
Tom Marschak with Merideth in 2017. (Photo courtesy of Merideth Marschak)

His colleagues at Haas remember him as a generous instructor with a wry sense of humor. “Tom taught microeconomics to a generation of Haas undergraduates,” said Professor Emeritus Jonathan Leonard, George Quist Chair in Business Ethics. “If you could get him to raise an eyebrow, you knew you had said something interesting.”

Merideth Marschak also recalled her husband’s “dry and delicious” humor, as well as his love for outdoor hiking adventures and walking the Bay Area hills up until his last months. He was “unbeatable at trivia and could summon up historic facts and arcane knowledge on request” and also loved to cook for friends and family. “A crowded dinner table was the best fun,” she added. He was delighted when he became a grandfather at age 88.

“He was incredibly generous with his insight and his kindness,” Merideth Marschak said. “He taught us all the value of slowing down, enjoying life, and keeping an open mind.”

Marschak is survived by his wife, Merideth; his children, Madeline, Timothy, Anthony, and Daniel; his granddaughters Lucy and Alice; and nieces Emily and Julie Jernberg. He was predeceased by his sister, Ann Jernberg.

Professor Nancy Wallace wins top honor for work in real estate & urban economics

Professor Nancy Wallace, a national expert on real estate finance and strategy, mortgage-related securities, and pricing models, has received the 2024 John M. Quigley Award—the highest honor of the American Real Estate and Urban Economics Association (AREUEA).

Berkeley Haas Prof. Nancy Wallace
Prof. Nancy Wallace

The award, named for the late Berkeley Haas professor emeritus and leading urban economics scholar John M. Quigley, recognizes scholars who best represent the ways in which Quigley advanced the academic fields of real estate, urban economics, public finance, and regional science. 

The medalist must have produced a record of scholarship that opens up new avenues of inquiry, have a demonstrated record of mentorship of young scholars, have supported institutional advances within these fields, or have been particularly effective at dissemination of these fields to public and professional practices,” said Stijn Van Neiuwerburgh, outgoing president of AREUEA. “Nancy embodies all of the ideal traits of the Quigley Medal winner.”

Wallace has been at Berkeley Haas since 1986, where she is the Lisle and Roslyn Payne Chair in Real Estate Capital Markets, chair of the Haas Real Estate Group, and co-chair of the Fisher Center for Real Estate and Urban Economics, and directs the Real Estate and Financial Markets Laboratory. She is a national leader in her field, having served as an advisor to the Federal Reserve and the U.S. Treasury on financial crises and reform. Her research focus includes residential house price dynamics, mortgage contract design and pricing, securitization and asset backed security pricing and hedging, lease contract design and pricing, methods to underwrite energy efficiency in commercial mortgages, and valuation models for executive stock options. 

On campus, Wallace received the 2021 Williamson Award, the top faculty honor at Berkeley Haas, and earned the Berkeley Faculty Service Award in 2019 for work helping the campus navigate complex financial and real estate issues.

Wallace will receive the award and discuss her scholarship as the keynote speaker for the 2024 Midyear National AREUEA conference in May. 

Dean’s Speaker Series: Author Michael Lewis on Sam Bankman-Fried’s unusual org chart and ‘Going Infinite’

It should have been a red flag that FTX’s organizational chart was created behind Sam Bankman-Fried’s back by his personal psychiatrist. Or that Bankman-Fried didn’t even want an org chart in the first place. 

Those were among the anecdotes that financial journalist Michael Lewis shared from his new book in his Dean’s Speaker Series talk, co-sponsored by the Berkeley Center for Workplace Culture and Innovation, with Acting Dean Jennifer Chatman. 

Lewis’ new book, Going Infinite: The Rise and Fall of a New Tycoon, was published Oct. 3, one month before Bankman-Fried was convicted on seven counts of fraud and conspiracy.  

Lewis is one of the most acclaimed authors in the investigative business world, with his nonfiction books having earned two Los Angeles Times Book Prizes and countless No. 1 spots on The New York Times Best Seller list throughout his career. But before he was known for acclaimed investigative works such as Moneyball, The Big Short, and The Blind Side, Lewis was once a businessman himself. 

Inspired to write his first book, Liar’s Poker, after starting his career on Wall Street as a bond salesman at Salomon Brothers, Lewis has continued to cover financial crises and behavioral finance, including in positions at The Spectator, The New York Times Magazine, Bloomberg, Vanity Fair, and more. 

Yet, when Lewis first met with Bankman-Fried in the process of writing Going Infinite, he wasn’t sure what to make of the situation. “It can often take me a year to figure out if there’s a book in something,” he said. 

It was after spending more time with Bankman-Fried that Lewis realized there was a story to be told. Bankman-Fried considered himself to be an “effective altruist,” Lewis said, and aimed to become the “the most important person” in this cult-like movement. Originating around the same time as BitCoin, effective altruism emphasizes one’s duty to serve others and “earning to give.” The problem with this utilitarian-like movement that “aims for good,” according to Lewis, is that it strips out human sympathy and justifies incivility toward colleagues. 

As a result of expecting everyone to “manage themselves,” Lewis explained, Bankman-Fried became more of a “figure” than a leader. In fact, despite having 140 venture capitalists investing, FTX neither had a CFO nor a board of directors. 

“The reason that he was able to just run through the world without having the ordinary checks imposed upon him is that the thing was actually so successful,” Lewis said. “The venture capitalists looked at it and said, ‘Alright, this is different. And yes, something bad might happen, but the bad thing happening is not nearly as bad as us missing out on the next Google.’” 

It was in this context that FTX came crashing down. As a reaction to the financial crisis, the cryptocurrency movement aimed to organize a financial system without the intermediaries and regulators of traditional financial institutions. Coupled with Bankman-Fried’s distrust in org charts—believing they created issues of status—FTX lacked any sort of oversight, instead thriving off of its monetary success with a peak valuation of $32 billion. 

According to Lewis, one of the main takeaways from the story is that “you can’t have financial markets without regulators.” Ultimately, Lewis said he hopes that those who read the book, if anything, take away pleasure from the incredible story of what he describes as a “comedy with a tragic ending.” 

Watch the full Dean’s Speaker’s Series talk.

Read the full transcript:

Professor Jennifer Chatman: Welcome to the Dean’s Speaker Series.  Yay. Go Bears. This is an event that’s actually co-sponsored by the center that I co-direct with my colleague, Sameer Srivastava, the Center for Workplace Culture and Innovation. And I’m Jenny Chatman. I am the acting dean at the Haas School of Business, and I am absolutely thrilled to welcome today Michael Lewis, the renowned author. We know him well. He almost needs no introduction. This morning I was thinking about my favorite book of yours, “Flash Boys.” Is that a weird choice?

It’s a weird choice. I remember I bought it, I was coming back from a large eastern school, and at Logan Airport, I picked it up, and I had all this work to do on the plane, and instead, I opened the cover, and I read it from coast to coast and did zero of my work; so it was, as usual, a gripping book. So Michael’s style, as you know, is to use real-life characters to kind of open up a world of mystery and intrigue. His books are stranger than fiction, and they are so gripping that many of them have been made into Hollywood films, including, pick your favorites, “The Blind Side,” “Moneyball,” which I use in my classes, and “The Big Short.” So Michael, thank you so much for spending some time with us and visiting us here at Haas. It’s great to have you.

Michael Lewis: I’m surprised you didn’t explain how far back we go. I mean, our kids were in school together starting, what was it, preschool? Or was it kindergarten?

Chatman: Well, so we were actually, if truth be told, we were the host parents, and actually, my husband Russell and I, we were host parents to your family coming into the school that our kids went to in kindergarten. And I had no idea who Tabitha was or Michael Lewis. Coincidentally, I had the book “Liar’s Poker” on my nightstand, and they came over for dinner, and I’m asking like, what do you do for a living? And he’s like, “Oh, I write books.” I’m like, “Oh, have you written anything I would know?” “Yeah, “Liar’s Poker,” “Moneyball.” And I’m like, “Oh, you’re that guy.” And I didn’t bring my book down because for some reason my Amazon order came back, sorry, it was Amazon. It came back as the easy-read version. And I’m like, look like I’m 900 years old with this easy read. It was a mistake. But, so we do go way back. And I think you and Russell have cooked pancakes together in—

Lewis: Many times.

Chatman: Various camping sites. So let me just offer some logistics here. We have cards on your seats. If questions occur to you, please pass them to the side. I think, Audrey, if you want to raise your hand, and Sarah. They will be picking up those cards and later we will have time to read those. Be sure to write your name and what program you’re in or what kind of member of our Haas community you are so that we can acknowledge you. And then, finally, before we dive in, I just want to thank a few people for putting these events together. Ooh. One is Sarah Bottger, who does a fantastic job in putting our whole dean’s series together. Thank you, Sarah. Carrie Hults and Audrey Jones have been instrumental in putting this together. So thank you guys so much. OK, so let’s talk about “Going Infinite,” and I—

Lewis: We can talk about anything.

Chatman: Yeah, I know—

Lewis: But, yes. This book is—

Chatman: Because I’m obsessed.

Lewis: Yeah.

Chatman: With this book, so, you may notice that it’s like not even really been opened, but that doesn’t mean I haven’t read it. I actually listened to it for the last two weeks. Michael is the narrator of the audiobook, which is unusual. And they keep saying, when they do the credits, they say, “performed by Michael Lewis,” which is so fun. So you’ve been in my ear for my long runs for the last two weeks, and it’s really a fascinating book; and, of course, has coincided with the events of Sam Bankman-Fried’s fate—emerging fate. And so, why don’t we start with that?

Lewis: Sure.

Chatman: I have some other questions.

Lewis: Yep.

Chatman: OK. So, if you’ve read the book and if you’ve gone to business school, you have thought a lot about expected value calculations. And so my first question is, why did Sam let you write a book about him? What do you think his expected value calculation was for that?

Lewis:  So, I think it was complicated. Is everybody, I mean, I don’t know how much background we need to give people. Does everybody know who Sam Bankman-Fried is in here?

You know, it’s funny, I was in Portland this weekend at a literary festival. It was people who read novels and even poetry. And there were 1,200 people in the auditorium. And I thought, and the person started with this a question that just presumed that the audience knew what FTX was and crypto trading. And I said, “Well, just stop a second.”

Chatman: Yeah.

Lewis: “Does anybody here not know who Sam Bankman-Fried is?” And they go, they all go, “No, we all know.” And it’s just amazing.

Chatman Yeah.

Lewis: The reach of this story.

Chatman: And so if they know, these guys definitely know—

Lewis: These people definitely.

Chatman: OK.

Lewis: These people are ready. So, I’ll tell you how I came about. Came about right here in Berkeley. And he came over to my office because a friend, the Brad Katsuyama, the hero of “Flash Boys,” the main character of “Flash Boys,” called me and said, “I’m about to swap shares with FTX.” And I said, “What’s FTX?” He said, “It’s the fastest growing financial business I’ve ever seen, and we’re going to exchange $300 million of shares in IEX.” Our stock trading, stock exchange with this guy. And he says, “My problem is, I don’t know this guy. I mean, I met him, but he’s odd, and I can’t, I don’t, I’m having a hard time getting a kind of read on him, and nobody knows who he is.” Eighteen months ago, he had no money, and now, he’s worth $22 billion, and he’s in Hong Kong. He says, “Could you sit down with him and just give me a view?” And I took him on a walk up til then for two hours, almost killed him. I mean, this whole scandal could have been avoided if I just took him on a three-hour walk. But he, I mean, he shows up, he showed up, but he comes out in his hiking shorts and his T-shirt. I thought, “He wants to go for a hike. He’s never been on one.” You know, he’s always dressed for one and never taken one. And, he, we go on this walk, and by the end of the walk I was already, I already thought character and situation is as good as it gets. He was—the situation was so bizarre. So I, we can get into why I got interested, but why he was interested is a different question. Because at the end of it, I said to him, “I didn’t know there was a book, I didn’t know what there was.” It often takes me, it can take me a year to figure out if there’s a book in something. But I said, “I just want to come, can I just come along and watch?” I don’t know why I said, “I don’t know what’s going to happen to you, but I want to watch, ’cause what’s happened already is incredible.” And he said, “Fine.” Now, he never once explained to me why he said “fine.” He never once asked me what I was doing or why I was interested. He never once asked, when I’d ask a question, “Why do you want to know that?” He never once asked to see—he didn’t see the book until he got it smuggled into him in jail a week after it came out. So he had no idea what I was up to. But I think what he thought, what he would’ve told his colleagues who were saying, a few of whom were saying, “Why are you letting him in?” was we are on a quest to be the legitimate crypto exchange. The big, the holy grail is to be regulated in the United States to get the approval of the SEC or the CFTC to open a crypto futures trading platform, and those people read Michael Lewis’ books. Now, this was, so that’s the official answer. I think the answer is, he read “Moneyball” when he was a little kid. He was a completely isolated nerd among nerds. He was a person who could read “Moneyball” and think, “Oh, there’s a place for me in the world.” And for some months in his childhood, he wanted to be a baseball general manager, and he got obsessed with baseball statistics. I know this not from him; I know this from his parents. And I think that because I reached him when he was a little kid, he felt some odd connection, and so that he was interested for that reason. But then, of course, what happens is that I become a nuisance in his life. I mean, I spent, I don’t know, I commuted to the Bahamas. I was commuting from here to the Bahamas. I spent 60 nights there over the course of, and I insisted on traveling with him around the country here, and so on and so forth. And I think then, what happened was, what happens with all the subjects, they’re three months in, and they realize it’s too late to turn around. Like they, I’ve seen too much and know too much and like I may be a pain in the neck to have around, but we’re too—it’s too late.

Chatman: Yeah.

Lewis: I had a number of subjects give me that look, like, “How did you do this?” Like, “How did you get this far in?” And we can’t just chuck you out now. I remember Billy Bean actually saying that to me, and, but I think, so I think it just got to the point where it had its own momentum and he let—and som I was there. I mean, where it gets particularly odd is last November, exactly a year ago, almost today, when FTX is imploding, the only people, all the employees have fled the Bahamas. And it’s me, his psychiatrist, him and his parents, and one employee with the COO who’d stuck around to kind of investigate him. But, and that was kind of, I was that kind of in, so it was a privileged ring. It was a privileged view of a bizarre story.

Chatman: Yeah. Yeah, I mean, you write about this effective altruism movement that Sam kind of identified with.

Lewis: Yeah.

Chatman: Right?

Lewis: More than identified with. I mean to appreciate the weird, the media sort of flattens the story.

Chatman: Yeah.

Lewis: And the trial certainly flattens the story. Like, I don’t think the phrase effective altruism was uttered in the courtroom. The jury never would’ve learned that all these people they were hearing from were united by a cult-like belief in this thing. And, so they never got them, the motive. But if you want to understand Sam Bankman-Fried, you’ve got to understand the movement.

Chatman: Yeah.

Lewis: And the movement starts basically when Bitcoin is created. Same kind of year period. And it’s a movement that grows out of work that was done. I mean, it grows out of utilitarianism, but papers that were written by an Australian philosopher named Peter Singer, who was at Princeton when I was actually at Princeton.

Chatman: Yeah.

Lewis: And had a mesmerizing effect on students because he was sort of asking young people, “What’s your obligation to the world? And he would, he started, I think the first paper he wrote the story that kind of hovers in the background of the effect of altruism movement. It’s an anecdote that Singer has in this first paper, where he says, “I’m going to put you in a moral quandary. You’re walking by a pond and you see a small child drowning. You’re wearing your brand-new, $300 shoes. Do you hesitate to take off your shoes before you jump into the pond to pull the child out, who’s drowning out of the pond? Of course, you don’t, you just, you go in and you, the shoes are ruined. So why do you hesitate to, instead of buying those shoes, take the $300 and send it to some poor country in Africa where it would save a child’s life?” And he, so he creates, he created a lot of moral discomfort in a lot of young people, but it never led to any action. I can remember hearing about this guy and people kind of coming out of his class thinking, “I’m rethinking my responsibility to like total strangers.” This, these Oxford philosophers in 2009, a particular one named Toby Ord start to write papers where they say, “We’re going to make, we’re going to take action on the back of Peter Singer’s work,” and Ord writes this paper where he says that, he shows that if he just took half his salary, which he said he intended to do, his academic salary over the course of his lifetime.

Chatman: It’s huge, absolutely huge.

Lewis: Huge, giant Oxford salary, right? I mean, look at you. You’re I mean, you put it into clothing. He was putting into, he—

Chatman: But I would actually take my shoes off because, right? You could swim better if you didn’t have your shoes on. So you could kind of do both.

Lewis: Oh that’s very funny. And you’d be so much faster that the time, yeah.

Chatman: Spoken like a Claremont member swim club.

Lewis: Yeah. Right. Right. Yeah. But they make this argument that they make this, they start essentially proselytizing the idea to young people that it’s a combination of your duty to the world, to other people. And also the twist that really gets inside of the heads of the mathy, sciencey kids that they attract, is that: “We are going to be rigorous about the altruism.” We’re going to actually start to measure the effects—

Chatman: Right.

Lewis: Of the various things you might do with this money. And we’re going to measure it in terms of, I mean, they developed some pretty kind of obstruent units of measurement, but quality life years saved or whatever it is. So you can start to do analysis about, you can measure your performance as an altruist. And Sam Bankman-Fried hears one of these philosophers give a talk when he’s a junior at MIT. And he just thinks that’s right. And they’d done it by, this is 2012, but they, what the philosophers had done at that point, was started to make an argument to especially young American college students—college students in the typical was like math or science at MIT or Harvard or Stanford or here. And the argument was: “If you’re thinking about what you’re going to do with your life, and we’re going to be rigorous and analytical about this, stop thinking about the direct good you would do.” Like, don’t think about, oh, I don’t know, going to be a doctor in Africa. Think about earn to give.

Chatman: Right.

Lewis: Think about this idea that you, hey, “You’re appealing to high frequency trading firms. You can make millions of dollars in the course of your career. Go do that to give it away.” And what I remember when I first heard about this, I was at some Wall Street Conference, and someone came up to me and said, “You’ve got to know about this. You know, we’ve hired a couple of kids, and they’re here because they say they want to make money to give it away.” And this was so perplexing to this Wall Street guy. It was like, no one, I, and it was like the first time in the history of Wall Street.

Chatman: Yeah.

Lewis: That people go to Wall Street to give it away. And actually quite seditious in a way, the point where it actually makes the firm that Sam Bankman-Fried goes to work for.

Chatman: Right.

Lewis: And a bunch of other effective altruists go to work for.

Chatman: Right.

Lewis: Uncomfortable.

Chatman: Right.

Lewis: ‘Cause they sort of, the lever they usually have on the employees is not there anymore. They’re doing it for a different kind of purpose. But, the high frequency trading firms who are recruiting people like Sam Bankman-Fried are sort of fishing in the same pond as the effective altruists philosophers. That they’re looking for mathy, sciencey—

Chatman: Yeah.

Lewis:  You know, analytical young people. And so a lot of these people end up doing what Sam does, going to high frequency trading firm, and with it to earn, to give.

Chatman: Yeah.

Lewis: Now, there’s a whole, we don’t probably want to go off on this too much longer, but there’s a whole turn that that movement—the effective altruism movement—takes, which amplifies the ambition of the people in effective altruism, amplifies it beyond, it’s, they stop thinking about, it’s, so, there’s this cult-like quality, the people—

Chatman: Right.

Lewis: Who become effective altruists. But it’s a kind of anti-cult cult because it’s a cult that’s based on reason and argument. And if you, and unlike a lot of cults, if you win the argument, you can change the cult. And at some point someone wins the argument and the, an argument, and the argument is, “OK, you, we’ve been talking about maximizing the number of lives you’re going to save with the money you make, doing whatever you do. But we’ve been talking about saving the lives of people who are here, now.” There is this problem with existential risks to humanity.

Chatman: Right. Right, right.

Lewis: And it takes many forms. There’s all these risks, this climate change and artificial intelligence and some really horrible pandemic. Something that would wipe out the species, asteroid strikes. If you could do anything to, the argument goes, “If you could do anything to reduce the risks of any of one of these things, you will have saved many, many more lives in the future. Then you could by just focusing on the here and now.”

Chatman: Right.

Lewis: And this decouples even further.

Chatman: Right.

Lewis: The actions that people are taking to do good from the recipients of the goodness.

Chatman: Yeah.

Lewis: It sort of completely strips the action of human sympathy.

Chatman: Yeah.

Lewis: And this is perfect for Sam Bankman-Fried, ’cause he has no human sympathy.

Chatman: Yeah, yeah, yeah.

Lewis: And it’s, but you can’t understand why he’s doing what he’s doing, unless you understand he’s completely, this isn’t phony. He’s complete, he eats, sleeps, and breathes this movement. And his ambition is to be the most important person in this movement. But it’s not like he’s just faking it.

Chatman: Well, I mean, in some ways, I wonder if that was a way that he felt invulnerable. Right, because these grandiose means just, ends justified the means. And in a sense, you could justify—

Lewis: Anything. Yep.

Chatman: Almost anything, including buying most of the luxury housing in the Bahamas and being uncivil to your immediate colleagues who are in front of you. If you imagine you have the greater good in mind and you have the, I’ll call it con—

Lewis: It does let you off hooks.

Chatman: I’ll call it confidence for the moment. But it could border on arrogance to be the one who decides what those existential problems are and how you’re going to prioritize them. I mean, that’s a pretty—

Lewis: You know, he reminded me of somewhere in the middle of kind of figuring out what the story was before I’d start writing it. So I didn’t start writing this ‘til January. So I—

Chatman: Wow.

Lewis: I didn’t really, and I didn’t commit to do it until after it all collapsed. But somewhere in the middle of it, I thought, “I’m watching some odd prelude to the dystopic, some odd foreshadowing of the dystopic artificial intelligence story,” where you, one dystopic artificial intelligence story is, you tell artificial intelligence to do something that you think is good, but you don’t tell it how to do it.

Chatman: Yeah.

Lewis: And so there are no guardrails. So you say, “Could you get me a reservation for dinner tomorrow night at Chez Panisse?” And you don’t say anything else, and it goes and finds that all the tables that Chez Panisse tomorrow night are booked and starts murdering the people who have tables.

Chatman: Right. Yeah.

Lewis: To get you a reservation.

Chatman: I’ve done that.

Lewis: This is Sam, but I thought this is Sam Bankman-Fried. This is just like—

Chatman: Right.

Lewis: You told him what to do—

Chatman: Yeah.

Lewis: But you didn’t tell him how to do it.

Chatman: Yeah.

Lewis: And there’s a, there was a whiff of that about him that was—

Chatman: So—

Lewis: Fun to watch.

Chatman: So, let me try this out on you. So, we have four defining leader principles at Haas that we hold one another accountable for. I don’t know if you saw those when you walked in on our building. We etched them in stone to show that we’re quite serious about them. And I tried to kind of analyze Sam using our four defining leader principles.

Lewis: I knew this was going to happen. This is good. I’m glad this is going to happen, but I knew that eventually my book was going to be a business school how not to book.

Chatman: Well, I know I’m not even sure that’s not actually where I’m going.

Lewis: OK. OK. Go ahead, I’ll listen.

Chatman: But—

Lewis: I’ll try to listen. I’ll listen. Alright.

Chatman: And I am using “Moneyball,” I’m not using—

Lewis: OK.

Chatman: “The Big Short” or any of those in my classes. So yeah. So, OK, so let’s try this out. You all keep me honest, ’cause you know about these four defining leader principles. So he was a student always, right? That’s one of ours. He was a puzzle solver and clearly learning over time as he was going through this journey in the cryptocurrency world. He was thinking beyond himself, we could say as an effective altruist. He was questioning the status quo. He was trying to bypass traditional institutions and regulation, which he had no—

Lewis: Completely true.

Chatman: No interest in.

Lewis: Right.

Chatman: But alas, the last one, which is—

Audience: Confidence without attitude.

Lewis: Wait, what is it?

Audience: Confidence without attitude.

Chatman: Confidence without attitude.

Lewis: Oh.

Chatman: So we like to think of ourselves as a contrast. There’s institutions that have confidence with attitude, right? We have confidence without attitude. And we think that that combination is important. And that’s the one I think you could observe Bankman-Fried as falling short on. And I have to admit I do research on narcissistic leaders, and I have to admit that I could see a narrative in which Bankman-Fried is a narcissist. He’s also sort of an unassuming cult leader, right? That he didn’t intend, but we’ll hold that aside. So narcissistic leaders often prioritize their own success over the success of others. They forego collaboration for their own grandiose ideas. Like, I noticed his advisors would give him advice, and he wouldn’t necessarily take it. And sometimes they would engage in even ethically questionable behavior. They believe that pedestrian rules that apply to other people don’t apply to them. And I think his intellect caused him to think he kind of rose above that. So, do you think there’s anything to the idea that Sam Bankman-Fried is a narcissist?

Lewis: You know, yes. But it, there’s something to the idea. It’s, so, let’s a little, here’s a, is a fun exercise that I engaged in, he and I were talking about. He was obsessed with Donald Trump. I used a, he on the list, to the list of existential risks to humanity that he was handed by the Oxford philosophers. He adds Donald Trump because he thinks that if Trump is president, American democracy is at risk. And without democracy, you’re not going to solve all these other problems. They are much less likely to solve all these other problems. And so he was constantly kind of trying to get inside Trump’s camp. Trump’s mind. He’s trying to pay Donald Trump not to run for president.

Chatman: I heard the number was $5 billion.

Lewis: $5 billion is where they were. But you know, when Trump was—

Chatman: For Trump not to run.

Lewis: And I’m almost certain that they were negotiating, I don’t know this, but I’m almost certain with Donald Trump Jr., because Sam’s, one of the senior executives at FTX, was friends with Donald Trump Jr., and I think that was their path into the Trump world. I’m not sure if the numbers ever actually got to Trump, but I, when he’s, when he was telling me about that, my first thought was, “You don’t really think Donald Trump’s going to take your $5 billion and then not run for president.”

Chatman: Yeah.

Lewis: You know what he’s going to do? He’s going to take your $5 billion and run for president. And so, but—

Chatman: Call it a witch hunt.

Lewis: But that, but yes, whatever. But that part, but it was interesting to watch Sam talk about Trump, ’cause he got Trump, and he got Trump because he rhymed with Trump.

Chatman: Yeah.

Lewis: But he was a little different from Trump. So, Sam’s behavior can read from a distance as narcissism, because in the narcissist, he looks like he’s thinking because he’s not thinking about other people. Sam Bankman-Fried is born without the natural complement of human feeling and is completely aware of this fact. He replaces the, I mean the normal mechanisms that you or I use to get moved through the world. A lot of emotion, a lot of intuition, a lot of feeling. He replaces it with a kind of mathematical calculation.

Chatman: Right.

Lewis: Does it very consciously. Because he’s sort of like, it’s almost like being colorblind. He’s lacks empathy. He lacks—he doesn’t feel pleasure. It’s like there’s something he’s born without some equipment. I’d say the difference between, so that reads as like he doesn’t care about you.

Chatman: Yeah.

Lewis: And that feels like a narcissist. You default to, “Oh, he cares just about himself.” But he actually doesn’t spend a lot of time thinking about himself either.

Chatman: Yeah.

Lewis: I think he cares about himself almost as little as he caress about other people. And so, whereas Trump cares about himself constantly, thinks about himself constantly—

Chatman: Right.

Lewis: Sam didn’t spend any time, when you were with him, he wasn’t talking about himself all the time. In fact, almost never.

Chatman: Yeah.

Lewis: He was always out, he was outer-directed. But it could read as narcissism because—

Chatman: Yeah.

Lewis: Because of the consequences for other people were almost the same.

Chatman: Yeah.

Lewis: But the, it was not as, it wasn’t as un-charming as—

Chatman: Yeah.

Lewis: As what you’re imagining.

Chatman: Yeah.

Lewis: Because he was, it was never about, it never seemed to be about him. It always seemed to be about problems or other things.

Chatman: Yeah. Well, and actually, you’re doing some recording. You know, Michael has a podcast called “Against the Rules.” And this season has been about the trial.

Lewis: Well we did, you know what we did is cheat. So “Against the Rules,” the interesting part to me is, there are these scripted, we do scripted seasons, and that’s work and writing and performing all this. This was just the gabfest about the trial.

Chatman: Yeah.

Lewis: That was more run by, sort of my producer, more than me. And I jumped in a few times.

Chatman: Yeah, but one of the—

Lewis: But I was in the—I was at the trial.

Chatman: Right, but one of the things you said was that you noticed how the judge was even becoming more and more interested in Sam Bankman-Fried. He’s a complicated character. And you—

Lewis: There were a couple of moments where I thought the judge was going to toss everybody out just so Sam could explain Bitcoin to him. Because, Sam among, so almost all my, all my characters have certain traits but one of them is for sure, is they’re all good teachers. They’re— you can learn a lot from them.

Chatman: Yeah.

Lewis: And now, in addition, they’re often also in situations that teach you things inadvertently. They aren’t explicitly teaching you. They’re just kind of, like, the way they move through space is educational. But Sam is both. And when he gets talking, I mean this, that, he’s going to be mesmerizing. And the judge—this is a complicated subject. The judge obviously didn’t know what a computer was and was quite open about it. And I mean, he’s 80 years old, and he does, but he’s smart. And so here he had someone who could actually start to explain in ways he understood—

Chatman: Yeah.

Lewis: What this was and there were just a couple moments where you could, thought you could, see that, “Wow,” the judge thought, “This is interesting. I would like to just learn more here.” And it was a, it was a counterweight to the other thing that was going on pretty clearly in the judge’s head, going all the way back to when Sam was put under house arrest and started to do things that annoyed the judge is that the judge just hated him. Like, just, he was so annoyed by him.

Chatman: Yeah.

Lewis: So you could see the annoyance sort of fade a bit when Sam was allowed to talk at length. And so, he was for, took it to judge just a beat to stop him from doing that. You’re not really supposed to do that in the courtroom.

Chatman: Yeah.

Lewis: Because he was interested.

Chatman: Yeah.

Lewis: Yeah.

Chatman: So, I actually, I want to turn around ’cause I was thinking about the comparison between Bankman-Fried and Trump, but from the other side, which is what we look for in our leaders. And why Trump’s, well, I’ll leave Trump aside, but—

Lewis: Yes, leave Trump aside.

Chatman: Yeah, because Bankman-Fried sort of skyrocketed and was best friends with Tom Brady, and people were flocking to him, but his star dropped quickly and definitively. Right, he was convicted within four and a half hours on seven counts. And we don’t see that happening as quickly with Trump, right? It’s a much, much more complicated situation. But what does that tell us about what we look for in people who we want to influence us?

Lewis: That’s an interesting question. Like, what it is, what was it about Sam? Well, so Sam was a, more of a misleader than a leader, that he was not a, he—the leadership was almost accidental. It was, I mean, he, up until the point, he creates Alameda Research here in Berkeley. You know, this whole thing starts in downtown Berkeley with 20 effective altruists, only two, one of whom Sam has any experience trading anything. Like most of them can’t tell you the difference between a stock and a bond. And they’re starting a high frequency trading firm.

Chatman: So I’ll tell you about that rental. Is Mike Riley here? Mike, are you here? So, our executive education director rented the space to them, but he was so worried about what they were doing that he took it all cash upfront, which he had never done before. I just learned that, so.

Lewis: That’s very funny.

Chatman: Yeah.

Lewis: I wish I’d known that.

Chatman: Yeah.

Lewis: So, it’s very funny.

Chatman: You can footnote that in.

Lewis: Yeah. Footnote. But so—

Chatman: No script.

Lewis: So Sam is leading 20-, 24-year-olds who share his effective altruist. It’s a kind of religion. And he’s the only one who’s really traded successfully and can kind of, seems to know what he’s doing at first. But even then, it only takes four weeks before people are running for the exits. That, like this, that he’s got, I mean, he had the advantage of having fellow cult members and being the only one who knew what he was doing supposedly. And it takes a month before half the firm leaves because they’re terrified of him, of what he might do.

Chatman: Yeah.

Lewis: I mean the whole foreshadowing of what happens, no lab, in the, over, with FTX is right in downtown Berkeley where, he seems to know what he is doing then he’s so unbelievably careless with the money. You know, they’ve raised money from effective, $175 million from rich effective altruist, and they seem to have squandered it. And these other people who were, he’s supposed to be leading, start to wonder what the hell he is doing. And he himself has no ability or to connect with people or interest in managing them. His view is basically: You need to be able to manage yourself. And what happens is, in the Sam Bankman-Fried environment, this is a long way of saying, I don’t think Sam actually was exactly a leader.

Chatman: Yeah.

Lewis: He was a figure, it’s different, and in his environment because, look, he built his house on a gold mine. It was true that becoming a high frequency trading firm in crypto in late 2017 was a really good idea. And if you did it well, you made a lot of money. And they did it well enough, so they made, they did end up making a bunch of money. And it was also true that if you created a crypto exchange that people wanted to trade on, that was just a money machine. So there is, he, and it’s kind of accidental that he even does that, that part of it. So he builds his Beverly hillbillies. He builds his houses on an oil field. So there is a mechanism, there’s conditions for success actually building an organization he had no ability to do. And people around him were forever compensating for his—

Chatman: Right.

Lewis: I mean, look, you have the book, right?

Chatman: Yeah.

Lewis: Can you, if you didn’t read the book, it’s funny, you missed something that’s fun. You want to pull the jacket off. If you pull the jacket off—

Chatman: You mean versus your, versus the audiobook.

Lewis: Versus the audiobook, ’cause you don’t see this, pull the jacket off the hardback. So, and show—

Chatman: Oh, there’s the org chart.

Lewis: There’s the org, so—

Chatman: I was looking all over for that.

Lewis: So this is the world, this is the world that Sam Bankman-Fried creates.

Chatman: OK, this we would not teach in our classes.

Lewis: No, this, but this is so when the whole, so to backtrack this is an anecdote, but it’s an anecdote that there are 40 versions of this anecdote in Sam Bankman-Fried land. When the firm collapses and the bankruptcy people move in, one of the things they say is, “Oh my God, there’s not even a list of employees. There’s no org chart. We don’t know who’s here or who did what.” And it doesn’t exist. And the prosecutors even said, they’re like, “We can’t figure out how this place,” they’re trying to figure out how this place worked. And Sam, so Sam had this principled objection to job titles and organization charts.

Chatman: Yeah.

Lewis: He thought that job titles became excuses not to do whatever your job title was, as opposed to fix a problem. And he thought that org charts created status problems between people. And so he just, he forbid there being an organization chart. However, people in organizations need to know where they are. They need to know who reports to them. They need to know who they report to. They need to know where this, the level of seniority, all that stuff makes people, not having that makes people uncomfortable, especially makes Chinese people uncomfortable. And half the employees were Chinese, or a whole bunch of ’em were. I mean they’re like, in the Chinese companies, the org charts are a really important thing. He, so Sam, as a result of not having any of this organization and not managing anybody, not conventionally leading anybody, Sam has all these psychological emotional issues in his company. Like, everybody’s kind of unhappy.

Chatman: Yeah.

Lewis: And so, to solve them, he solves the problem in a very Sam Bankman-Fried way. He moves his personal psychiatrist, his shrink from here to the Bahamas to be the shrink to everybody. And so sort of like George, his name is George. You deal with all these problems that are caused because of the way I run my company. George, who in the Bay Area had become shrink to the effective altruists. So he was the world’s authority on the inner life of effective altruists. George moved to the Bahamas, and within about six weeks, 100 employees of FTX are on his couch.

Chatman: Yeah.

Lewis: Like, that many people, all wanting to share their problems and the problems all kind of went back to like, there’s no—

Chatman: And he drew the chart, right?

Lewis: So George in therapy starts to ask people where they are.

Chatman: Right, where they are. And what you can see here is that there’s just one box at the top, one box. And all the other boxes are below that one box, which is Sam Bankman-Fried.

Lewis: And he’s got 24 direct reports, none of whom he talks to. And he’s got a CTO who’s over here, Gary Wang, who has no one underneath him because Gary doesn’t speak. And it’s like, and George is figuring out like a psychiatrist, trying to think about t. is thing. And George does this completely in secret because he’s worried Sam’s going to be angry if he finds out that he’s created an organization chart. So before George fled, he’s now hiding in the jungles of Vietnam, I think. But before he fled, he gave this to me on a thumb drive, and my publisher said, let’s stick it on the inside of the jacket cover.

Chatman: Oh my God, that’s so funny.

Lewis: But that’s like, the best picture of the organization. And it’s a little warped because it was done by the shrink based on therapy sessions. But it was, this is like, I don’t know, I what do you do in a business school with this story? You like, hand it to somebody or say read it and never do any of this.

Chatman: Yes, that’s what you do.

Lewis: It’s kind of like—

Chatman: Yeah.

Lewis: I think it is the way you think about it.

Chatman: There are lessons. I mean, I have so many more questions, but I want to get to some of the audience’s questions. So let me finish with this question, which is sort of unresolvable. But you know, on the one hand, we’re a school that embraces entrepreneurship and pushing the boundaries and questioning the status quo and doing what hasn’t been done before. And there’s a way in which you want the Sam Bankman-Frieds of the world to succeed and to push new frontiers and try new things. And the promise of blockchain—there’s something idealistic there. On the other hand, there was essentially zero regulation, which seems to be, at least in part, responsible for all of the negative things that ensued. And so, what have you learned about that balance, right? Should the investors have been much more wary? Is it their own fault that they invested in this operation? Should the government regulators have been on top of it sooner? Should we have clamped down on Sam Bankman-Fried and FTX sooner? I mean, where does that happen in the world of evolution and progress?

Lewis: Well, crypto, I mean, all crypto is created in an opposition to regulation.

Chatman: Right.

Lewis: It’s created an opposition to institutions, to governments, to banks. It’s a reaction to the financial crisis, right, in the beginning. So, it was explicitly anti-regulatory. It had this libertarian streak, and it was in theory, a different way to organize a financial system without all these trusted intermediaries and without the need for regulators, right? But then, what it did very oddly and tellingly, is it recreated the financial system.

Chatman: Yeah.

Lewis: The traditional financial system inside of crypto but without the regulators.

Chatman: Yeah.

Lewis: And so what has resulted is scandal after scandal after scandal. And presumably a lot of things, bad things going on that nobody’s caught because there’s nobody there watching and policing.

Chatman: Well, and it looks kind of like, when you boil it down, it looks like old-fashioned fraud, like commingling funds and investing with your clients.

Lewis: What’s amazing, I mean, this story is so amazing. I regard, I didn’t know quite what to do with the structure of the story because, so Fitzgerald once said, “What Americans really want is a tragedy with a happy ending.” What this was was a comedy with a tragic ending.

Chatman: Yeah.

Lewis: It’s like the opposite of what, the whole thing felt so comic until it, until what happened, you know—

Chatman: Right.

Lewis:  The last year, but, when they start they start, it doesn’t even, I don’t think it even occurs to them that the fact that there’s no distinction between Alameda Research and FTX is that big a deal. They’re an Asian Crypto Exchange. I don’t think any of the Asian crypto exchange has instituted these kind of controls that you would have—

Chatman: Yeah.

Lewis:  In a U.S. exchange. I mean, just the idea that the exchange custodies the traders’ funds, that’s something that’s alien to the U.S. markets, right? You just wouldn’t be allowed here. It’s much less, you can own the biggest trader on the exchange at the same time that you’re custoding the funds on the exchange. All the whole structure’s nuts. And nobody even really questions it. What, if you want to, I’m trying to think of the best way to answer your actual question though is like, “What does it tell us about the, like what should have happened?” And probably what should have happened is the minute serious grownups started to turn up on the scene, venture capitalists, for example, 140 venture capitalists invested in this business, valued it at the end at $40 billion without insisting on there being a board of directors.

Chatman: Yeah.

Lewis: There was no board of directors.

Chatman: I mean, there was no CFO, right?

Lewis: There was no CFO.

Chatman: No CFO, OK.

Lewis: In fact, there’s a line in the book I asked, I was asking Sam about all this right away. And it was, he was, it was comic. He says, what, he says, “They tell me I need a CFO.” I asked him, “What does a CFO do?” And they said, “The CFO keeps track of the money.” He says, “I keep track of the money. Why do I need a CFO?” Well, we saw how well he kept track of the money.

Chatman: Yeah. Right.

Lewis: Right. And, but, no, but the reason that he was able to just run through the world without having the ordinary checks imposed upon him, is that the thing was so actually successful.

Chatman: Yes.

Lewis: That the revenues generated—

Chatman: That’s right.

Lewis: By the exchange were so crazy that the venture capitalist looked at it and said, “Alright, this is different,” but if, and yes, “something bad might happen, but the bad thing happening is not nearly as bad as us missing out on the next Google.”

Chatman: Yeah.

Lewis: And I had, I don’t know how many venture capitalists tell me this might be the next trillion-dollar company.

Chatman: Yeah.

Lewis: And Sam may be the first trillionaire.

Chatman: Yeah.

Lewis: That they thought it had that kind of scope. And so, it tells you about like how loosely the, our conventional world holds its principles.

Chatman: Right.

Lewis: That if when they’re faced with an incredible—

Chatman: Right.

Lewis: Temptation—

Chatman: Yep.

Lewis: That you drop the principles. And it wasn’t just the institutions that did this. Everybody, the celebrities did this, politicians did this.

Chatman: Yeah.

Lewis: There was a kind of a fear of missing out on a thing. And the thing was fun, and it was going, moving fast. And Sam was kind of delightful to be with every time—

Chatman: Yeah.

Lewis: He walked into a room. Everybody wanted to listen to no one but him. And—

Chatman: And the numbers were enormous. I mean, so they were thinking the money in Alameda was like—

Lewis: They were thinking—

Chatman: Rounding error.

Lewis: Yes.

Chatman: $8 billion. What? That’s nothing. We could cover that in 10 minutes.

Lewis: So, but the, so the, it does, I guess one of the takeaways, it’s one of the boring takeaways, but it is a takeaway from the story is, “Yeah, you can’t have financial markets without regulators.” I mean, they’re not going to work. They, you’re going to have violation of trust after violation of trust.

Chatman: Yeah.

Lewis: And funny, if you look at our financial market, at the traditional financial markets, we’ve done a pretty good job at minimizing the amount you have to actually trust somebody, right. Because the regulators—

Chatman: Right.

Lewis: They’re watching them for you, because you’ve got things like deposit insurance and crypto, oddly born out of complete mistrust of—

Chatman: Right.

Lewis: Of the existing financial system. Born out of a kind of mistrust of other people, created to sort of end the need for trust, creates these institutions that require us to trust them even more.

Chatman: Yeah.

Lewis: It’s a strange event.

Chatman: It’s ironic.

Lewis: It is ironic.

Chatman: Yeah.

Lewis: Anyway, I, the, if I wanted to convey to an audience, like, who hadn’t read the book, the main thing I wanted them to take away from the book, is just pleasure. The story is so incredible.

Chatman: Yeah.

Lewis: I don’t know what lessons there are in here.

Chatman: Yeah.

Lewis: But it’s just like an amazing story.

Chatman: Yeah. Well as a psychologist, he’s such an interesting character.

Lewis: Yeah.

Chatman: Yeah. Is this Austin here? Austin.

Audience 1: He’s over here.

Chatman: Oh, Austin. Hey. Austin’s going to ask some questions from the audience.

Lewis: Are these curated?

Audience 1: Maybe.

Chatman: By Austin in real time.

Lewis: Right. Good.

Chatman: He looks trustworthy.

Austin: I would not say the same. So, we’ll change that just a little bit. We’ll switch over to “Moneyball” for a bit. You mentioned that Sam was part of the “Moneyball” generation—also included in that is me. I was 8 when the book came out and then ended up spending some time working for the Milwaukee Brewers. And one of the things I noticed, and granted I had never worked in a front office before, but compared to what you described in Oakland to what I experienced in Milwaukee, the front office was very white. It was very male. Didn’t have, instead of it being all ex-players, it was a mix of some ex-players and people like me, who had maybe played in college, but were, there’s totally to do analytics. Over the past few years, and from some of my buddies who’ve worked at the Dodgers, we’ve seen this change into becoming almost the Ivy League Boys; Club, instead of it being the Baseball Boys’ Club, it’s the Ivy League Boys’ Club. That’s still problematic in my view. So, what would you recommend baseball do to try and fix it to be more representative of maybe just the fan base of the game?

Lewis: Yeah, I don’t know. I don’t know if it has to be representative of the fan base of the game to be good management, but you’re touching on something that’s really interesting to me. So, it is true. in 2002, when you walked into the front office, it was, the dominant culture was the scouting culture. You, it were kind of people who had played in the Minor Leagues, very seldom actually former Major League players, but people who were college players, people who hadn’t valued their formal education very highly. And the, and it was an old boys’ club as opposed, and it’s become a new boys’ club. The problem with the old boys’ club was that it was impervious to like new ideas. It didn’t have any that, the amazing thing about the “Moneyball” story was that it was available to be written in 2002 when most of the ideas that were going to transform the game had been cooked up in 1977. And that for 20-something years, or little, until the Oakland A’s started to grab these ideas that nobody thought they were worth paying attention to, ’cause they were hatched by people who were outsiders. So there was, the revolution happens outside the game. The inside is arrogant, smug, all kind of the same, monoculturey, and so doesn’t assimilate these new ideas. What’s happened? It’s like, “Yeah, the management’s now smarter. It’s, it is better managed.” It is true that relying on better data and better analytics gets you a better outcome than just relying on the intuition of the old boys. But you do lose something, and you, there is sometimes something to that intuition and you lose, you do create an environment where everybody’s kind of thinking the same way all over again. It’s just a, it’s a different way, but they’re all thinking the same way. And I think introducing, I mean the important thing is a kind of intellectual diversity, and you can get that a lot of different ways. But opening what has become the, I mean the nerds are now running the show in baseball, opening that room to some people who aren’t, it seems really important to me. And I think even Oakland A’s would tell you that right now. Yeah.

Austin: Perfect. So then one final question, we’ll build off of effective altruism. It’s something we’ve kind of seen before throughout the, I guess the Silicon Valley mindset. We’ve seen with Elizabeth Holmes thinking that Theranos was going to be this revolution that would change health care forever. Andreessen Horowitz uses the word techno optimistic manifesto. Does this just seem like a rationalization of Silicon Valley save the world, and maybe Sam kind of fell into that? Or do you see Sam as a different character who fell into something completely unique?

Lewis: So I don’t think Sam is principally a Silicon Valley character. I think of him as a creation of Wall Street. That if Sam, virtually any other period of human history, Sam would either have been someone’s food or would’ve been like a high school physics teacher or a math teacher or maybe a college professor. The—

Chatman: Hey now, come on.

Austin: Continue.

Chatman: It’s OK.

Lewis: Not a good college professor.

Chatman: Yeah, no, he’s super smart.

Lewis: No actually, I think he’d been a great college professor.

Chatman: We currency—

Lewis: No, I think he’d been—

Chatman:  Intelligence.

Lewis: I think, think he was born, his parents were professors, kind of assumed he was going to be a professor. He ends up disdaining professors like he just disdains every other grown-up and everything that’s ever been thought or said, including Shakespeare. I love that Sam Bankman-Fried, when he is in high school, argues that Shakespeare sucks. And you can—

Chatman: Yeah.

Lewis: You can prove this statistically.

Chatman: Yeah.

Lewis: It’s just like, it’s just a different way of thinking about the world. So, why isn’t Sam Bankman-Fried just in that role as opposed, and it’s because Wall Street evolved to, got to a point where, has gotten to a place where the things that Sam Bankman-Fried’s mind can do, are highly valued on Wall Street. And there are these institutions, especially the high frequency trading firms, that have become machines for turning math people into money people. And he, I don’t think Sam Bankman-Fried, would’ve ever have landed in Silicon Valley and started a company. People would’ve left after two days. You know, that I didn’t have the company, he didn’t really have that management creator sort of gene. What he had was the trader in him. And so, yeah, he interacted with Silicon Valley ’cause he was raising venture capital. He didn’t think much of it, but that doesn’t, there’s a long list of things he didn’t think much of. So, but I don’t think, I don’t think that’s where, that’s he doesn’t really, he’s not a creature of the place even though he is born out here. He’s a creature of modern Wall Street, and it’s modern Wall Street that has a bit to answer for in him. Not really Silicon Valley.

Chatman: Yeah. Great. Well with that, before you leave, I wanted to, so Michael is actually a big swimmer, and he’s actually pretty fast.

Lewis: So that’s, neither one of those things is true.

Chatman: You know for, he’s pretty—I see him in the pool—he’s pretty fast. I was going to say for people of our generation—

Lewis: So—

Chatman: And so we’re a public university, and we don’t have a lot of cash, but we do have a ton of talent. So, I brought a great crew here to thank you for visiting with us today. We have three of our world class swimmers. We have, and you guys come up as I call you, we have Bjorn Seeliger. Bjorn is a Haas undergrad student. He’s on the Cal Men’s Swim Team, who, they’re two-time defending national champions. So, and I’m just going to go through this for a second. So Bjorn swims—

Lewis: Hey, good to meet you.

Chatman: Michael, you need to listen to this.

Lewis: I’m listening.

Chatman: Because this is going to humble you. So Bjorn swims, Bjorn is a sprinter. He swims free, fly, back, and was an Olympian for team Sweden in the 2020 game. And I just wanted to give you some time. So his, the fastest, and I may not be right about this, but the fastest 50-meter free. And actually Bjorn helped me with backstroke, not, it’s didn’t really help that much but, his fastest 50-meter free is 18 seconds and 71 10th. Is that right? Is 18.71, is that your fastest?

Seeliger: 18.21.

Chatman: 18.20, Oh, sorry. So much lower. Right. OK. So think about your time compared to that. Then we have Tyler Kopp, who is also a Haas undergrad, also on the men’s team, also part of our NCAA Championship Team. He was a finisher at the U.S. Olympic trials. He’s a long distance swimmer. That’s more of my world. So he swam a 16.50. That’s if you have a, like a regular sized pool. My pool, 75 laps. He swam that in 14 minutes and 58 seconds. OK. Seventy-five laps. Right. Takes me up to three days or so to do that. And finally, we have Will Roberts who transferred to swim at Cal. You were at Michigan before, right? Is that right? So Will transferred for graduate school. He was part of the NCAA team as well. He is also a distance swimmer and I saw a 500-free time, which is 20 laps of 4 minutes, 17 seconds, 20 laps. He’s now working in San Francisco and helps athletes start businesses. So, the three swimmers have some gifts for you to thank you for coming to visit.

Lewis: Thank you, so—

Seeliger:  I liked to mention something. So you’ve mentioned that you almost killed, you almost killed Sam Friedman on a two-hour walk. So, we want to make sure you don’t die on a two-hour swim. And we got a little bit of things for you here today. So thank you for coming with you talking.

Lewis: Thank you. Thank you.

Chatman:  Thank you, Michael.

Lewis: Thank you.

Chatman: It’s so great to see you. Thanks for coming. Bye, great to meet you. Hey, thanks everybody. We’ll see you next semester.

Berkeley Haas launches O’Donnell Center for Behavioral Economics to lead the next generation of research

Established with a philanthropic investment of almost $17 million from Robert G. and Sue Douthit O’Donnell, the new center will bring together the best minds from a wide range of fields.

An aerial view of the Haas School of Business campus showing a wide staircase leading up to an arched entry between two buildings.

Berkeley, Calif.—Ever since Nobel laureates George Akerlof and Daniel Kahneman created a 1987 UC Berkeley course that broke the rigid barrier between psychology and economics, the university has led the way in bringing the once-disparate disciplines together into the field of behavioral economics.

More than 35 years later, the Haas School of Business is launching the Robert G. and Sue Douthit O’Donnell Center for Behavioral Economics to advance the field toward its next stage of evolution.

Portrait of a woman with shoulder-length dark blond hair and purple blazer.
Professor Ulrike Malmendier (Photo: Copyright Noah Berger)

“We went from neoclassical economics that considered humans to be perfectly rational, to behavioral economics that brought in social psychology,” says Ulrike Malmendier, the Cora Jane Flood Professor of Finance, who will serve as the center’s faculty director. “Now we want to move the needle further, bringing together the best minds for rigorous research on human behavior from the sciences more broadly—including neuroscience, cognitive science, biology, medicine, epidemiology, and genetics.”

Funded with a philanthropic investment of almost $17 million by Bob O’Donnell, BS 65, MBA 66, and his wife, Sue O’Donnell, the center aims to become the preeminent hub for the maturing fields of behavioral economics and finance, bringing together leading researchers from a wide range of disciplines for collaboration, conferences, and bootcamps, as well as funding promising PhD students and postdoctoral scholars. The center will also host the prestigious Behavioral Economics Annual Meeting (BEAM), co-founded by Malmendier, every three years.

A nexus for cross-disciplinary research

O’Donnell says he was inspired by the pioneering work of Kahneman, Akerlof, Malmendier, and others who gave Berkeley its leading position in behavioral economics. “UC Berkeley is dedicated to integrating business education with other disciplines on campus, which is essential in this area,” he says. “It should have a center devoted to continuing this work.”

The center, says Berkeley Haas Dean Ann Harrison, will create a far-reaching impact across UC Berkeley, a research powerhouse with many areas of strength. “The goal is to cut through barriers that traditionally hinder research across disciplines, such as different ways of presenting data and publishing results, and bring people together in a different way than what’s usually done,” she says. “The O’Donnell Center will be the nexus of a new form of cross-disciplinary collaboration that pushes behavioral economics toward the future.”

Beyond ‘homo economicus’

Traditional economics was based on the assumption that human beings are perfectly rational, profit-maximizing “robots”—sometimes referred to as “homo economicus” or “economic man,” Malmendier says. Behavioral economics brought in insights from psychology and human behavior to explore the predictable foibles in our thinking, such as decision-making biases, fears of losing out, lack of self-control, and overconfidence. A classic example is Kahneman’s pioneering work with Amos Tversky on loss aversion, which showed that people are willing to take greater risks to avoid a loss than to secure a gain.

These ideas have been integrated into economics and finance departments around the world and have deeply influenced public policy and practice. For example, after Nobel Laureate Richard Thaler and Cass Sunstein developed the concept of the “nudge”—interventions that spur people to act in their own self-interest, such as enrolling in a retirement savings plan—hundreds of “nudge units” were established in governmental and private-sector organizations around the world.

Many other Berkeley Haas researchers helped pioneer this intellectual revolution, including finance professor Terrance Odean, BA 90, MS 92, PhD 97, the Rudd Family Foundation Chair, who was convinced by Kahneman to pursue a doctorate in finance rather than psychology and whose work reveals investors’ flawed decision making.

O’Donnell, the center’s founding donor, says he often applied insights from behavioral economics during his career as a portfolio manager for a large mutual fund group. “It represents a further step in the evolution of financial theory comparable to the development of the efficient market hypothesis,” he says. “When combined with existing financial theory, I believe that its insights enhanced results for my clients.”

Yet, during the 17 years he taught an investment class in the Berkeley Haas MBA program, O’Donnell says he sometimes encountered skepticism when he introduced ideas from the field. “Indeed, one student asked, ‘Isn’t all this kind of woo-woo?’”, he says. “Several years later, that student told me how perspectives from behavioral economics had helped her career in finance.”

Experience effects

Now, after more than three decades of foundational work, it’s time to move behavioral economics past its adolescence, Malmendier says. “Behavioral economics made progress by including psychology, but we didn’t include all the other sciences.”

Malmendier, whose groundbreaking work on “experience effects” earned her a Fischer Black Prize in 2013 for the top economist under the age of 40 and a Guggenheim Fellowship in 2017, has focused on complex economic behaviors. She has studied how stressful experiences with recessions, layoffs, inflation, housing bubbles, and political repression make consumer and investor behavior more cautious and risk averse for years afterward, and she has explored how stress can affect our health, careers, education, and other aspects of life in dramatic ways.

To further that work, Malmendier aims to bring a wider range of researchers together and break down silos. For example, collaborating with neuroscientists, neuropsychiatrists, biologists, medical researchers, and epidemiologists who have studied stress and trauma could more precisely demonstrate how past experiences shape our actions today and across generations. Stress impacts the big variables that economists study, such as completing an education, choosing an occupation, and deciding to have a family, she says.

“As we walk through life, our outlook on the world changes, especially if we suffer trauma,” she says. “Neuroscience says our brain gets rewired. There may be a long-term impact of stress on our longevity, on our aging, and on our health.”

Questioning the status quo

Malmendier, who now serves on the German Council of Economic Experts, is passionate about the potential of behavioral economics to help leaders create better solutions to the most complex and urgent problems of our time—from fighting climate change to battling inflation and avoiding financial crises. “If leaders keep in mind people’s emotions, their personal histories, and their psychologies, they can engineer ways to make things more predictable and give people more control over events help them live better lives,” she says. “That is our ultimate goal.”

Photo of a man with light skin, short brown hair, and glasses, wearing a navy blue jacket with white collared shirt.
Professor Stefano DellaVigna

Moving the field forward will also involve rigorous research to reexamine what has come before. For instance, a recent paper by center co-founder Stefano DellaVigna, the Daniel E. Koshland Senior Distinguished Professor of Economics and professor of business, with Elizabeth Linos of Harvard, suggests that leaders should get more realistic about nudge policies—and better at incorporating them into practice. Two government nudge units opened their records to allow the researchers to look at all their interventions. By examining 126 randomized controlled trials of nudge policies involving 23 million people in the United States, the researchers found that nudge interventions are on average effective, increasing the desired outcomes by about 8%. However, the effects are less than those in published academic papers—about one-fifth the size. The authors attribute the difference to publication bias, or the tendency toward publishing only large, surprising results.

“Our study stresses the importance of research transparency,” DellaVigna says. “This transparent access is quite unique and shows a further innovative impact of behavioral economics, which has led to more evidence gathering within governments.”

In a second paper, DellaVigna and Linos, along with Department of Economics doctoral student Woojin Kim, found that even when nudge policies are found to be effective, public agencies implement them only about a quarter of the time, often due to organizational inertia.

In addition to Malmendier and DellaVigna, the center will include a host of affiliated researchers from Berkeley Haas and Berkeley Economics, as well as from across the university. They include Berkeley Haas professors Ricardo Perez-Truglia, Ned Augenblick, Don Moore, and Gautam Rao, PhD 14—who will join Haas in January from Harvard University—as well as Dmitry Taubinsky of Berkeley Economics and others. The founding gift will establish a permanent endowment to support the center and some of its ongoing activities.


Media Contact: Laura Counts, [email protected], 510.205.9570

Japan’s top economic minister visits Berkeley Haas to spur innovation, collaboration

Photo of three people on a stage. The man in the center is speaking.
Minister Nishimura Yasutoshi (center) speaks with Acting Dean Jennifer Chatman (right).

Nishimura Yasutoshi, Japan’s Minister of Economy, Trade and Industry (METI) visited UC Berkeley and the Haas School of Business this week to spread the message that Japan is making significant investments to transform its economy through entrepreneurship and innovation.

While Japan may be best known for its big companies like Toyota and Sony, “They began as startups first of all,” said Minister Nishimura, speaking through an interpreter in a conversation with Haas Acting Dean Jennifer Chatman. “Entrepreneurship is really in the DNA of the Japanese people.” 

Invited to campus by the Clausen Center for International Business and Policy as part of events surrounding the Asia-Pacific Economic Cooperation (APEC) Summit in San Francisco, Minister Nishimura’s visit also expanded the collaboration between UC-Berkeley and the Japan External Trade Organization (JETRO). During the event, Caroline Winnett, Executive Director of the Berkeley SkyDeck accelerator, signed a memorandum of understanding with JETRO to further advance entrepreneurship, innovation, and scholarship.  

Minister Nishimura also toured SkyDeck, which to date has hosted about 60 Japanese startups through its JETRO partnership. 

In addition to the SkyDeck collaboration commemorated at Minister Nishimura’s talk, Berkeley Haas has a long tradition of partnering with Japanese companies and universities to promote innovation and entrepreneurship. In the past year, the Berkeley Haas Entrepreneurship Program has worked with Tohoku University to train top startups from the Sendai region in Lean Launch methodology. Haas has also hosted leading Japanese companies at the Berkeley Innovation Forum to explore building their innovation and entrepreneurial ecosystems.

To achieve its goal of a tenfold increase in the number of startups over the next five years, the Japanese government plans to send 1,000 entrepreneurs to the Bay Area over a five year span, and to invest in university partnerships, noted Haas Continuing Lecturer Jon Metzler, who helped organize the METI visit to Haas.

“The government of Japan is taking a number of measures to stimulate entrepreneurship, increase new venture formation, and nurture entrepreneurs with a more global mindset—including sending promising entrepreneurs to acceleration programs like Berkeley SkyDeck,” Metzler said.

‘Unicorns and decacorns’

METI Minister Yasutoshi Nishimura spoke to the Berkeley community on Japan’s innovation goals.

After an introduction by Associate Professor Matilde Bombardini of the Clausen Center, Minister Nishimura delivered prepared remarks and sat for Q&A with Acting Dean Chatman. He said everyone who has visited Japan in the past few years is surprised by how much it has changed. 

“In terms of macroeconomy, over the past 30 years because of deflation, it has been a challenging time for Japan. But now we are in an era when big changes are about to take place,” Nishimura said. Within the population of about 125 million, many entrepreneurs have been content to find success within the country. But Nishimura is encouraging young entrepreneurs to think big and “go global.”

“We are looking toward the emergence of many unicorns and decacorns,” he said. 

Nishimura also talked about plans to build a next-generation semiconductor fabrication facility in Hokkaido, which will adopt a 2 nm fabrication processa major technological leap compared to current fabs in Japan.

In addition to the Haas’ Clausen Center for International Business and Policy, the event was hosted in partnership with the Berkeley APEC Study Center, the Institute for East Asian Studies, the Center for Japanese Studies, and Berkeley SkyDeck, with support from the Haas Asia Business Club. The Japan Society of Northern California also helped promote the event. 

Left to right: Chris Bush, executive director of the Institute for Business Innovation; Berkeley Haas Lecturer Jon Metzler; METI Minister Yasutoshi Nishimura; Acting Dean Jenny Chatman; and UC Berkeley Executive Education CEO Mike Rielly.


In TEDx talk, professor Juliana Schroeder shares ways to fight loneliness

With approximately 44 million Americans having reported daily feelings of loneliness, U.S. Surgeon General Dr. Vivek Murthy earlier this year declared that we are facing a “loneliness epidemic.”

Juliana Schroeder, the Harold Furst Chair in Management Philosophy and Values Professor and Barbara and Gerson Bakar Faculty Fellow at Berkeley Haas, explored this crisis in a recent TEDxMarin talk, sharing strategies to fight loneliness and live a more connected life. Schroeder is a behavioral scientist who researches the psychological processes behind how people interact and make social inferences about others.

In fact, Schroeder herself once felt plagued by loneliness. She shared that while riding public transit early in her career, she used to feel particularly disconnected from those around her. Technology is only exacerbating our loneliness, she added.

“Avoidance is easier for us than ever,” she said in her talk. “Online avoidance feels convenient, but it carries an inconvenient consequence.”

“Avoidance is easier for us than ever.”

This “inconvenient consequence” extends beyond the emotional impacts of loneliness. In fact, Schroeder noted a meta-analytic review in the journal PLOS Medicine that found sustained loneliness is potentially as harmful to human health as smoking 15 cigarettes a day.

When people refuse to interact with others and instead retreat into their tech devices, Schroeder explained, the cycle is only perpetuated.

“The paradox of loneliness is that people who are lonely don’t want others to think there is something wrong with them,” she explained. “So they further isolate themselves, creating a cycle of loneliness.”

“The paradox of loneliness is that people who are lonely don’t want others to think there is something wrong with them. So they further isolate themselves, creating a cycle of loneliness.”

Strangers on a train

Schroeder, who also holds affiliations with the Social Psychology Department, Cognition Department, and Center for Human-Compatible AI at UC Berkeley, has explored this paradox in her own research, looking at not only the causes behind the loneliness epidemic but also at potential solutions. When completing her doctorate in social psychology at the University of Chicago, for instance, she ran an experiment inspired by her own experiences on the train.

She found that people expected that talking with a stranger on the train would result in the least positive commute experience—but, in reality, it did the exact opposite. Those who engaged with others on the train reported having the most positive commute experience, leading her to beg the question: Why do people choose to avoid each other if they’d be happier connecting?

One of the main reasons, she finds, is that people tend to overestimate the social risk that comes with connecting with others. Citing the rule of social reciprocity, however, Schroeder noted that nearly all participants received a response when engaging with another person on their commute.

Fostering deeper connections

Curing loneliness is about more than just making small talk—it also requires establishing deeper connections with colleagues, friends, and more. In another study published in the journal Psychological Science, Schroeder found that the medium through which communication occurs is crucial to its quality. That is, voice-based communication like in-person and phone conversations—as opposed to text-based communication like texting, emailing, or DMing on social media—changes how words are received and understood, influences word choice, and affects the synchronicity of exchanges.

In fact, research suggests voice conversations enhance brain wave and heart rate synchrony—the neurological and cardiovascular evidence of psychological alignment.

“Combating loneliness means making the deliberate choice to connect when all you want to do is avoid,” Schroeder concluded. “These choices might feel small, but in aggregate, they have the power to change us from feeling lonely to feeling connected.”

Berkeley Haas launches new Climate Solutions Fund 

Aerial view of a massive array of solar panels
An aerial view of Dominion Energy’s Scott Solar farm in Powhatan, Va. (AP Photo/Steve Helber)

The Haas School of Business is launching the first student-led Climate Solutions Fund, the latest addition to its comprehensive curriculum to equip the next generation of business leaders with the financial skills to accelerate the transition to a low-carbon economy.

Beginning in fall 2024, MBA students can enroll in a new course where they serve as investment managers for the $2.37 million fund, learning how to structure financing in complex private markets by co-investing in real-world deals focused on solutions to climate change.

“As the world moves toward a goal of net-zero carbon emissions by 2050, we need financial leaders with the skills to navigate the economic revolution we are facing,” says Professor Adair Morse, co-founder of the Sustainable and Impact Finance Center (SAIF), who conceived of the fund and will lead the course. “This economic revolution will be staggeringly disruptive yet will also be a source of more business opportunities across all parts of the country than we’ve seen in 250 years.”

“As the world moves toward a goal of net-zero carbon emissions by 2050, we need financial leaders with the skills to navigate the economic revolution we are facing.” —Professor Adair Morse

The new fund was made possible by a lead gift from Allan Holt, MBA 76, along with generous founding donations from Larry Johnson, BS 72, Charlie Michaels, BS 78, and his wife Doris, Scott Pinkus, and Professor Laura D. Tyson, former Haas dean and co-founder of SAIF.

“I am thrilled to help Haas take the lead in training leaders in the emerging area of climate finance,” says Holt, a Senior Partner and Managing Director of The Carlyle Group. “Decarbonizing our economy is the critical issue of our time, and I am committed to supporting future leaders who can spur this transition.”

“Decarbonizing our economy is the critical issue of our time, and I am committed to supporting future leaders who can spur this transition.” —Allan Holt, MBA 76

The multi-asset class private Climate Solutions Fund augments Haas’ unique curriculum under SAIF, which teaches investment management with hands-on experiential learning. It rounds out the public markets-focused Sustainable Investment Fund—the first and the largest student-led sustainable investing fund within a leading business school—and the Haas Impact Fund, a seed/startup capital offering.

A new area of finance

The Climate Solutions Fund curriculum will teach students new designs and uses of finance not traditionally taught in mainstream finance courses, where there are dire needs for leadership, according to  Morse, who saw the need for this financial expertise while serving as deputy assistant secretary of Capital Access in the U.S. Department of the Treasury from 2021-23.

Financing the climate transition requires a diverse and technical tool kit: An estimated $4 trillion to $5 trillion per year will be needed to reshape global energy, transportation, food, and waste infrastructure, and to help companies reinvent supply chains and integrate new technologies, Morse says. 

This level of reinvestment will require every finance tool available, including designing financial structures to mobilize government programs and work with community and industry partners,” she says. “Our goal is to expand how we teach students to provide the leadership and expertise that corporations, financial entities, startups, governments, and philanthropies will need to navigate this transition.”

This level of reinvestment will require every finance tool available, including designing financial structures to mobilize government programs and work with community and industry partners.” —Professor Adair Morse

The fund, and the associated MBA course, are the first at a major business school to focus on complex financing strategies within private markets, including growth equity and debt equity; public-private partnerships with federal and state programs; risk mitigation; identifying the underlying technologies to fuel the low-carbon transition; and envisioning new financial products.   

Students enrolled in the Climate Solutions Fund course will assess investment opportunities in U.S.–based for-profit companies, working with outside investment partners to structure deals. Following a pitch competition, student managers will select one finalist to co-invest $100,000 to $300,000 annually. The fund is intended to generate positive returns over time so that future generations of students can build off the capital.

Stock photo of a biogas plant and farm (Adobe Stock)

Comprehensive curriculum

In addition to the “fund-as-curriculum” courses, SAIF also offers other applied innovation courses such as the Impact and Climate Investing Practicum, where faculty guide small teams of MBA students who are paired with impact investing firms to to gain hands-on experience with impact investing strategy, mapping, and measurement projects.

The courses count toward the Michael’s Graduate Certificate in Sustainable Business. Open to both full-time and evening and weekend MBA students, the certificate requires 9 units of required coursework. Students can create a pathway that’s focused on either bringing a sustainability lens to a mainstream business function or building expertise into a specific industry such as renewable energy or green infrastructure.

In addition to Morse, SAIF is led by Professor Panos Patatoukas, The L.H. Penney Chair in Accounting, and Tyson.

Five major areas of sustainability

The new Climate Solutions Fund is part of Haas’ larger effort to ensure that all students are educated in the fundamentals of sustainability. Haas launched the first student-managed SRI fund in the early 2000s and is now the only top business school to work across five major sustainable business areas: energy, sustainable agriculture and food, real estate and urban economics, corporate accountability, and sustainable finance and accounting.

The school has combined research on energy conservation and storage, building efficiency, renewable energy sources, and sustainable food with efforts to include climate and equity into the core business curriculum across all programs. All told, Haas offers more than 25 courses with a focus on sustainability.

For students planning careers in managing sustainability challenges in organizations, Haas is also planning to launch a new joint master’s program in 2024 with the Rausser College of Natural Resources to offer an MBA/MS in Climate Solutions. 


Lifetime achievement award for Professor Emeritus Pablo Spiller

A man dressed in business attire hands an award certificate to a man wearing a blue sports jacket.
Professor Emeritus Pablo Spiller (right) accepted the 2023 Elinor Ostrom Lifetime Award in August at the SIOE’s annual conference in Frankfurt, Germany.

Professor Emeritus Pablo T. Spiller has received the 2023 Elinor Ostrom Lifetime Achievement Award by the Society for Institutional and Organization Economics (SIOE).

The award is given biennially to a researcher who has made “sustained significant academic contributions to institutional and organizational economics.” It is named for Indiana University political scientist Elinor Ostrom, who shared the 2009 Nobel Prize in Economic Sciences with Berkeley Haas Professor Oliver Williamson.

A portrait of a man wearing a collared shirt and purple tie.
Professor Emeritus Pablo Spiller

Spiller is the Jeffrey A. Jacobs Distinguished Professor Emeritus of Business & Technology at the Haas School, as well as a UC Berkeley professor of graduate studies.

Spiller’s research lies at the intersection of economics, politics, and the law, and spans political economy, industrial organization, the economics of regulation and antitrust, and regulatory issues in developing countries. One research stream analyzed the hazards inherent to public contracting, and how it differs from private contracting. Spiller applied the approach to such areas as utility regulation, the organization of bureaucracies, and the inner workings of public companies.

In addition to his academic work, Spiller has consulted for the World Bank, the InterAmerican Bank, the UNDP and multiple governments and private companies throughout the world on the design and implementation of appropriate regulatory policies, contract design and implementation. He has also testified in numerous international arbitrations involving contract, regulatory and investment disputes. He is the former President of the International Society for New Institutional Economics (now SIOE).

Spiller served as the Editor-in-Chief and Associate Editor of the Journal of Law, Economics, and Organization for 19 years, and held multiple Editorial appointments at a variety of academic journals. On special leave from Berkeley, he served as a Special Advisor to the Bureau of Economics of the US Federal Trade Commission.

Berkeley Haas Undergraduate Program again ranks #2 in U.S. News

New undergraduate students walk through the Haas courtyard during orientation 2023.

The Haas Undergraduate Program has been ranked #2 in U.S. News & World Report’s 2024 Best Undergraduate Business Programs.

It’s the second year in a row that Haas has tied with MIT for the #2 spot. Both schools had peer assessment scores of 4.6 on a scale of 1 to 5. Wharton held the #1 spot with a score of 4.7.

The business school ranking is based entirely on a peer assessment survey of deans and senior faculty members at peer institutions. They are invited to rate peer programs with which they are familiar, based on each program’s scholarship record, curriculum, and quality of faculty and graduates. Read more about the ranking methodology.

In U.S. News’ 2024 Best Colleges, UC Berkeley again ranked as the #1 public university in the country, tied with UCLA.

Putting her story in the Haas story: 125th anniversary celebration honors founding donor Cora J. Flood

Exactly 125 years after Cora Jane Flood announced the gift that launched UC Berkeley’s College of Commerce, Haas students and staff packed the school’s sunny courtyard to celebrate this milestone.

Haas is not only the second-oldest business school in the country and the first at a public university. “Haas is the only leading business school to be founded by a woman, Cora Jane Flood, who was known as Jennie,” said Professor and Acting Dean Don Moore. “Haas is also the first top business school to be led by two women deans—Laura Tyson and Ann Harrison.”

Dean Ann Harrison unveiled a new plaque honoring Flood. “Now, students, staff, faculty, alumni, and visitors can learn her name and be inspired by her far-sighted philanthropy,” said Harrison, who is on sabbatical this fall but returned for the event.

Flood, the daughter of silver baron James Clair Flood, gave a gift of securities and real estate with an estimated value of $463,133.39, constituting the largest private gift received by the then-30-year-old university. According to the book “Business at Berkeley: The History of the Haas School of Business” by Sandra Epstein, “By 2013, the gift’s value had grown to over $25 million, comprising one of the largest endowments on the Berkeley campus.”

The courtyard event was part of an ongoing celebration this fall of Haas’s 125th anniversary. See photo highlights and check out the video and transcript below, and read more about how Haas has been reimagining business for more than a century in a special issue of Berkeley Haas magazine.

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Full event event video:


Erika Walker, Senior Assistant Dean for Instruction

Good afternoon. I am Erika Walker, Senior Assistant Dean for Instruction at Berkeley Haas.

As we gather for today’s ceremony, we want to acknowledge that UC Berkeley sits on the territory of xučyun, the ancestral and unceded land of the Chochenyo speaking Ohlone people, the successors of the sovereign Verona Band of Alameda County. This land was and continues to be of great importance to the Muwekma Ohlone Tribe and other familial descendants of the Verona Band.

We recognize that every member of the Berkeley community has benefitted, and continues to benefit, from the use and occupation of this land since the institution’s founding in 1868. Consistent with our values of community, inclusion and diversity, we have a responsibility to acknowledge and make visible the university’s relationship to Native peoples. As members of the Berkeley community, it is vitally important that we not only recognize the history of the land on which we stand, but also, we recognize that the Muwekma Ohlone people are alive and flourishing members of the Berkeley and broader Bay Area communities today.

I would now like to welcome Professor and Acting Dean Don Moore to the podium.

Professor Don Moore, Acting Dean and Associate Dean for Academic Affairs 

Thank you, Erika. And welcome, everyone! Thank you so much for joining us this afternoon. What an honor it is to serve as the acting dean of this exceptional business school while Dean Harrison is on sabbatical. I hope you are all having a great start to the semester so far.

This year, we look back on 125 years of reimagining business at Haas, all the way to 1898, the year of our founding as the second-oldest business school in the United States.

In 1898, we might have been listening to “The Entertainer” on our gramophones, watching the short film The Astronomer’s Dream on the kinetoscope, or trying on a new bowler hat. California had recently transitioned from Mexico to the United States. Berkeley had a population of 5,000. The bicycling craze was giving women a new avenue of independence. That year, the Golden Bears beat Stanford at the Big Game, 22-0!!

This was also a pivotal time for business, which was coming into its own as a profession on par with law and medicine. Smart management was sorely needed in an era of wild economic growth, robber barons and corruption, fortunes made and lost in immense new enterprises. These new businesses needed to make sense of thousands of employees, strategic mergers, and ballooning divisions.

This was also a pivotal time for business, which was coming into its own as a profession on par with law and medicine. Smart management was sorely needed in an era of wild economic growth, robber barons and corruption, fortunes made and lost in immense new enterprises. These new businesses needed to make sense of thousands of employees, strategic mergers, and ballooning divisions. —Don Moore

Where better than a great university in the pioneering West to order and transform the way we worked? Good sense was not enough; mass scale was a necessity; and only the skilled and sophisticated would thrive. Learning the systems and theories of professional management was a logical—and necessary—next step. A new institution would need to draw scholars from the rest of the world to Berkeley, and produce brilliant minds of its own.

And so it did. The College of Commerce, which we now know as Haas, was founded with just three students. Now we have over 2,500 students in six programs, more than 300 ladder and professional faculty members, and more than 43,000 alumni in 81 countries around the world.

We are also the first business school founded at a public university. Haas is the only leading business school to be founded by a woman, Cora Jane Flood, who was known as Jennie. Haas is the first top business school to be led by two women deans—Laura Tyson and Ann Harrison, respectively.

And we are the first school built entirely with private donations on the UC Berkeley campus. We are incredibly grateful to all of the donors who have supported our school.

Of course, the Berkeley Haas legacy includes more than a century of stellar researchers and teachers, including two Nobel laureates. We are fortunate to be able to attract exceptional staff. And we are more than the sum of our parts. My colleague and fellow acting dean Jenny Chatman will say more about what really makes us exceptional. 

Professor Jennifer Chatman, Acting Dean and Associate Dean for Academic Affairs  

Thank you so much, Don. I am honored to be serving the school with you this fall.

As a scholar of culture, I want to note that Berkeley Haas stands out in yet another way: in being the preeminent mission-driven business school, as Poets & Quants has described us.

The Haas School’s values stretch back a long way. The man for whom our school is named, Walter A. Haas, Sr., graduated from the College of Commerce in 1910. He held forward-looking views on social welfare and public affairs that were influenced by the school’s first woman instructor, Jessica Peixotto. That influence led him to grow Levi Strauss & Co. into one of the country’s largest socially responsible businesses.

All of these priorities grew into our four Defining Leadership Principles, which I know you know well: Question the Status Quo; Confidence Without Attitude; Students Always; and Beyond Yourself. To put these principles into action in our three core areas: innovation and entrepreneurship, sustainability, and inclusion.

Of course, they are all inextricably linked. Berkeley Haas boasts a world-class team for diversity, inclusion, justice, and belonging. The school has built and continues to build remarkable access, while simultaneously equipping all of us to be more inclusive leaders. Sustainability and entrepreneurship are always top of mind at Haas. And thanks to our location in Berkeley—the epicenter of innovation—we have been and continue to be the heart of what’s next.

Finally, I am so pleased that several members of the chancellor’s cabinet are joining us today. Berkeley Haas’ deep ties with Cal are precious, and we don’t take them for granted.

Executive Vice Chancellor and Provost Ben Hermalin has a special connection to Berkeley. He has held a significant number of roles at Haas: as professor, associate dean, interim dean, and winner of multiple teaching awards. Ben, thank you for being with us today.

Ben Hermalin, Executive Vice Chancellor and Provost, UC Berkeley:

Thank you, Jenny!

It is true that Berkeley Haas is dear to my heart. But it is also a treasured and essential star in the Cal constellation. This is a vibrant, visionary school that provides students, faculty, staff, and alumni much of the meaning that I believe gives us purpose as individuals and as institutions. One way the school does that is by attracting award-winning scholars, who illuminate their classrooms and advance the world’s knowledge. Berkeley Haas strives to teach and shape business in ways that are valuable to a broad spectrum of people, in profound and material ways. We try to go beyond in deed and not just in word. We always have a lot more work to do—to be as inclusive and just; bold and confident; smart and ethical as we can. That is the best way for us all to stay true to those who built this institution and to our counterparts in the future. Congratulations on this momentous anniversary!

Don Moore:

Thank you, Ben.

This occasion is so special to the Berkeley Haas community that Dean Ann Harrison has returned today (from her sabbatical this fall) to share it with us. Ann, please join me onstage.

Dean Ann Harrison:

Thank you so much, Don! What a beautiful day, as it so often is in Berkeley. I am thrilled to be here with you all. I do feel as though I am reaching across more than a century and saying thank you to Cora Jane “Jennie” Flood. I am grateful for her confidence, generosity, and foresight, and believe she would have found today to be a powerful testament to her intention. We are so fortunate that there are Flood family members here with us today celebrating this occasion.

In her declaration to the Regents of the University of California on September 13th, 1898, Jennie Flood wrote of her bestowal that it “shall be devoted to some branch of commercial education.” The bold idea to create a College of Commerce had been proposed by Berkeley graduate and entrepreneur Arthur Rodgers in 1883. Jennie Flood turned Rodgers’s vision into reality.

125 years of groundbreaking education is a remarkable achievement for any business school, especially given the immense changes the world has undergone. Having reimagined business, we are well positioned to lead in a world of change. We look back with pride, but we move forward to make an impact for future generations. Keeping our eye on innovation and entrepreneurship, sustainability, and inclusion is more important than ever.

It is high time that we make Jennie Flood a permanent part of our campus. I am honored to unveil this plaque, which commemorates our founder and allows us to put a name—and a face—to the origins of Berkeley Haas. Now, students, staff, faculty, alumni, and visitors can learn her name and be inspired by her far-sighted philanthropy. Her father, James Clair Flood, was the son of immigrants who took an eighth-grade education and an entrepreneurial spirit to become one of the “Silver Kings” of Gilded Age San Francisco and a UC Regent. Jennie often accompanied him to his business meetings, and I would go so far as to say she was an informal student of business herself!

And now, we’ll reveal our new plaque in her honor.

What a beautiful addition to our campus and to our continuing story. Berkeley Haas has staying power. We’re not going anywhere—we’re just getting better.

Please come over during the reception and check it out!

Don Moore:

Thank you so much, Ann. To tie together the whole web of Haas-tory from our esteemed founder to our current dean, I am happy to report that former dean Rich Lyons is here with us to celebrate. He is such an important part of our legacy, both philosophically and musically. To that end, he has brought his guitar to send us out snapping our fingers. Take it away, Rich!

Rich Lyons, Associate Vice Chancellor for Innovation and Entrepreneurship

(Lyons performs a special Haas-themed version of “The Bare Necessities,” singing and playing acoustic guitar.)

Don Moore:

A perfect note to end on. Thank you so much to everyone for joining us today. Please enjoy some refreshments and bask in this beautiful day and community. Here’s to the world-changing 125 years behind us, and to all the triumphs ahead.

Go Bears!

Professor Yaniv Konchitchki: Is a soft landing still possible?

In this live interview on Wharton Business Daily, Associate Professor Yaniv Konchitchki discusses whether a soft landing is still possible and provides insights about the current state of the capital markets and the macroeconomy. Konchitchki argues, based on his research, that the Federal Reserve has made systematic and predictable errors, waiting too long to raise interest rates and letting inflation get out of control. He comments on whether further interest rates hikes are necessary, whether the Fed’s 2% inflation target is the right one, and discusses whether inflation can get under control without further hurting consumers, businesses, households, and the economy.

Konchitchki also refers to his new working paper, “Predictable Errors in Monetary Policy Communications and Decisions,” coauthored with Berkeley Haas professors Don Moore and Biwen Zhang.

Listen to the full interview:

We need a tough global AI treaty—before it’s too late

U.S. President Joe Biden stands at a podium at the White House speaking. To his right are CEOs of seven leading AI companies.
U.S. President Joe Biden delivers remarks on on Artificial Intelligence next to CEOs of seven leading AI companies at the White House in Washington on July 21, 2023. Photo by Yuri Gripas/Abaca/Sipa USA(Sipa via AP Images)

On July 21, seven artificial intelligence (AI) tech companies signed a set of eight voluntary commitmentsfocused on “ensuring safe, secure and trustworthy AI.” The text of the document hit on most of the important topics of concern in the field, but it seems the tech companies walked away with more than they deserved. Company leaders were granted a photo op and media interviews from the White House lawn. What they provided in return were vague, voluntary commitments with no enforcement mechanism.

Why so skeptical? All of the big companies included have in the past paid fines in the billions of dollars (AmazonGoogleMetaMicrosoft) to regulators in the United States and the European Union in connection with violations of privacy and antitrust laws. These infractions were arguably not accidental. Companies take calculated risks that represent the cost of doing business in a highly competitive industry, often characterized by “races to the bottom” to gain control of markets such as search, shopping, social media and advertising.

And yet, enforcement works: I know first-hand, having worked on Meta’s Responsible AI team until November 2022, that tech companies are moved to do the right thing by firm regulation backed up by the threat of massive fines and reputational damage. When there is little or no regulation in place, teams working on topics such as responsible AI — one example being Twitter’s Machine Learning, Ethics, and Transparency team — can be abruptly downsized or eliminated.

It’s to be hoped that the new commitments are the “bridge to regulation” that White House staff make them out to be. An executive order on AI is in the works. However, such orders can easily be reversed by subsequent administrations. Perhaps the bipartisan popularity of AI regulation will serve as a bulwark against some reversals, but the power of tech industry lobbying is not to be underestimated — in fact, efforts are already under way to influence AI legislation and shift public opinion.

Another important path to explore would be for Joe Biden’s administration to work with Congress to pass strong legislation on AI. This approach has the potential to be much more durable and sweeping than an executive order. But gridlock being what it is, and given Congress’s protracted failure to regulate social media, relying on federal legislation seems a tall order.

That is why the ultimate destination must be a binding, international treaty that creates a new intergovernmental body to govern AI globally. As is the case with controlling nuclear weapons and tackling climate change, a patchwork of regulation will leave certain AI harms dangerously unregulated. Powerful tools could conceivably fall into the hands of bad actors who could leverage them to produce disinformation campaignscreate bioweapons or deploy fleets of autonomous killer robots.

The good news is that it appears the Biden administration is already working in this general direction. An announcement that accompanied the new AI commitments mentions past meetings with 20 countries, as well as plans to participate in and support processes under way via the United Nations, the Group of Seven and the Global Partnership on AI.

The European Union’s AI Act, expected to pass before the end of 2023, may also serve as an effective model for global or semi-global regulations, though sadly it may not go into effect until 2025 or later. And even if the US Congress cannot move as quickly as the White House would like, President Joe Biden could parallel track domestic and international legislative work by supporting efforts such as the Council of Europe’s emerging draft AI Treaty (as long as it applies to private companies, not just government AI use) and the Center for the Advancement of Trustworthy AI’s campaign to help nations around the world put AI laws in place. China has made fast progress on AI regulation as well, and though there are some provisions in their domestic laws that would not be compatible with more democratic perspectives from countries like the European Union and the United States, there is still great value in engaging with China as a potential partner on numerous aspects of AI policy.

The Biden administration should lean into this global effort in a major way, as time is of the essence, with new developments in the AI field proceeding at a dizzying pace.

In tandem, the White House could push for more aggressive enforcement of existing laws that prohibit discrimination, whether at the hands of human beings or AI systems. In 2016, the Obama White House released a thoughtful report titled Big Data: A Report on Algorithmic Systems, Opportunity, and Civil RightsLegal scholars argue that civil rights law can be used as a framework to launch broad campaigns against AI bias, a strategy that has yielded results in anti-discrimination lawsuits against social media companies like Meta. State and local laws (see, for example, New York City’s AI hiring law) can also make a difference, by forcing companies to come into compliance.

By working from local to global, the White House has a unique opportunity to advance the cause of enforceable, international AI regulation. I hope that my skepticism is unwarranted and that all seven companies that signed commitments last week will honour the full spirit of those commitments. In the meantime, it’s crucial that regulation of these technologies, in state, domestic and international arenas, proceeds rapidly, so that this transformational technology can truly deliver for humanity.

David Evan Harris is a member of the professional faculty at the Haas School of Business and a chancellor’s public scholar at UC Berkeley. This article was commissioned by the Centre for International Governance Innovation (CIGI),  an independent, non-partisan think tank. It originally appeared on CIGI’s blog on August 3, 2023.

Prof. Jennifer Chatman wins lifetime achievement award for culture research that ‘changed the field’

Professor Jennifer Chatman has won a lifetime achievement award for “research on culture that has changed the field of organizational behavior,” according to an announcement from the Academy of Management’s Organizational Behavior Division.

Professor Jennifer Chatman

Chatman, the Paul J. Cortese Distinguished Professor of Management and Associate Dean for Academic Affairs at Berkeley Haas, will receive the award at the OB@AOM conference in Boston next month.

Chatman has “pioneered new theoretical and conceptual approaches to the topic and continues to do so. She also has been a strong mentor to many doctoral students over the years. Finally, beyond her own work and the work of her students, she has contributed to the field as an editor…and editorial board member at almost all of our top journals,” according to the announcement.

In the early 1990s, Chatman co-created the field’s leading quantitative research tool, the Organizational Culture Profile, with Charles O’Reilly, MBA 71, PhD 75, and Dave Caldwell. It illustrated how organizational culture can be quantified, has defined the agenda for the scientific study of culture for decades, and remains the most robust and reliable measure of organizational culture to date.

In nominating Chatman, colleagues noted that she “owns the topic” of culture research and is a “household name” in the field. They also noted that her achievements span beyond being purely scholarly: “For more than 30 years, Jenny has been one of those rare scholars who are triple threats. They are able to be world class scholars over time even as they are leaders in our profession and their host institution,” describing her as “an icon in the field of organizational behavior, as a scholar, as an instructor, and as a mentor. Her career stretches long, well over 30 years, and during that time her work has been nothing short of pathbreaking” and the “ultimate exemplar of a completely involved modern OB researcher, educator, and contributor to the larger world of work and working.”

Chatman will continue to expand her leadership when she steps into the role of interim dean this fall, filling from October-December while Dean Ann Harrison is on sabbatical.

Professor David Vogel honored for lifetime achievement in research on government regulation

Professor Emeritus David Vogel, known internationally for his work on environmental policy and government regulation, has received a lifetime achievement award from the European Consortium for Political Research (ECPR) Standing Group of Regulatory Governance.

The award is given biennially to a scholar who has made a seminal contribution to the development of the field of regulatory studies. 

Prof. Emeritus David Vogel “As an American, it’s a great honor to have my work on regulation, much of which has focused on Europe, be recognized by an association of European scholars,” said Vogel.

Vogel, who holds the Soloman P. Lee Chair Emeritus in Business Ethics, has focused his career on subjects ranging from regulating health, safety, and environmental risks in Europe and the United States to global challenges in responsible business. He has examined the differences between environmental policy in the United States compared to that of the European Union. In his book, “The Politics of Precaution: Regulating, Health, Safety and Environmental Risks in Europe and the United States” (Princeton University Press, 2012), he decribed how the U.S. and the E.U. “flip-flopped their position in risk regulation: Whereas before the 1990s the US had often the stricter standards, nowadays EU standards are stricter in many instances,” said Professor Eva Ruffing of Germany’s Osnabrück University, in a speech presenting the award. 

Vogel is the author of eight other books, including “California Greenin’: How the Golden State Became an Environmental Leader” (Princeton University Press, 2018). Other books include: ; “Global Challenges in Responsible Business” (Cambridge University Press, 2010); and “The Market for Virtue: The Potential and Limits of Corporate Social Responsibility” (Brookings, 2005).

Vogel has taught both Ethics & Responsibility in Business at Haas and Public and Private Global Business Regulation at UC Berkeley. Since 1982, he has served as editor of Berkeley Haas’ management journal, The California Management Review. He has taught classes and lectured on environment management in the U.S., Europe and Asia.