Autumn 2009: Of Note
The Central Bank
David Hanson 05MBA finds the intersection of finance and fairness
By Susan Carini 04G
It might surprise some people to learn that Emory has a central bank—a financial center, granted, that is more philosophical than physical.
But David Hanson 05MBA, Emory’s associate vice president of administration and special assistant to Executive Vice President Mike Mandl, has taken a keen interest in how central banks can benefit higher education institutions. In fact, they were the subject of his dissertation when he earned a doctorate in higher education management from the University of Pennsylvania last spring.
In simplest terms, Emory’s central bank is a mechanism for pooling assets and liabilities for the benefit of the entire institution. Although Hanson admires the financial yields that central banks offer universities—which include maximizing net interest margins, improving cash flows, and lowering an institution’s cost of capital—he becomes impassioned on the subject of the human and management benefits that come with a central bank: improved capital and strategic planning, a more transparent and fair internal lending structure, development of higher levels of trust on campus, and breaking down departmental silos.
“Providing access to education is the biggest issue,” Hanson says. “It is why we do what we do, so we can bring faculty and students together to benefit society. For private schools like Emory, we already have hit the point where tuition could otherwise be prohibitive for many students and families.”
In Hanson’s mind, it is the job of leadership to find ways to optimize revenue streams and lower costs in order to increase access. “My look at central banks,” he says, “was to determine whether universities are spending their money in a way that supports the mission of the institution, which does relate to fairness and justice. If universities are not spending their money appropriately, then they are not benefiting society and following the tax code.”
During the past twenty years, Hanson points out, higher education has seen more talent in the CFO ranks, as highly accomplished individuals who might have made a career on Wall Street are drawn to its complexities—including mounting issues surrounding research funding and government regulation.
As colleges and universities continue to grapple with the economic recession, Hanson says, schools such as Emory will necessarily become more focused on their centers of expertise and carve off whatever is not a core competency.
“What I’ve learned from Mike [Mandl] is that to be a preeminent CFO, you can’t simply understand the balance sheet and profit/loss statement,” Hanson says. “Mike gets deeply involved in housing, food services, and enabling academic mission. The top-caliber CFOs will operate at two levels—the ground level, to understand operations, and the strategic level to attain mission-related goals.”