As the banking industry goes through unprecedented disruption and change, Darden has revitalized and relaunched our Bank Executive Leadership Program to meet the needs of today’s banking and finance leaders, so that they can manage regulatory uncertainty, new technologies and systemic challenges that continue to threaten society’s financial stability. Program faculty leader, Yiorgos Allayannis, addresses some questions about the importance of this program, as well as what to expect from the experience.
Speak to the industry challenges and crises that make a program like the Bank Executive Leadership program so important right now.
The recent failure of SVB, the second-largest failure of a U.S. bank ever, points to a number of issues that makes such a program vital for current and future bank executive leaders. For example, the importance of leadership, corporate governance, risk management – asset-liability matching, interest-rate risk arising from recent inflation increases, the risks stemming from uninsured deposits, and the rethinking of business models, all these issues are among those highlighted in the SVB demise. At the same time, issues on regulatory uncertainty, strategic growth via M&A and competition from fintechs has increased the complexity faced by bank executives today and makes it essential to be equipped with the necessary skills and leadership qualities to be able to lead their organizations and thrive.
Describe your approach to the program and how Darden is able to help leaders manage the strategic issues and decisions facing the banking industry.
At Darden, we follow an integrated approach to discussing key challenges faced by bank leaders. The problems faced by these leaders are multifaceted and complex. To effectively deal with them you need to have a wholistic understanding of finance, strategy, and leadership and how these areas intertwine. We have developed a program which includes cases that bring these aspects alone and in-conjunction, and employ team-teaching to effectively bring the various aspects of the issue at hand. Our hallmark way of teaching via cases allows us to engage in deep conversations with the participants to bring out the different perspectives and debate potential solutions. It is through active engagement by our participants in the program that they formulate a way of thinking enabling them to hone-in on the issues and take action.
The program is thought out through its entirety – how the different pieces/cases/exercises fit together and how learning progresses over the course of the program to achieve maximum benefit. The close collaboration among the faculty teaching in the program is a key characteristic of Darden programs. As an example, we start with a case on what it means to be an outstanding leader and then we put participants in various leadership situations facing an important banking challenge.
Banks are a pillar of the economy and society. Their importance is unquestionable. Working with leaders in this field is extremely rewarding given the impact of these leaders and their organizations to society.
What do you believe to be the most impactful aspect(s) of this program for participants and their organizations?
Participants will engage in real problems that bank leaders face and debate solutions to these problems to arrive at best practices. They will have to articulate their bank’s strategy and defend it and work through a scenario planning analysis to decide how they will manage the various risks posed. They will hone-in their leadership skills and come away as better prepared leaders to lead their organizations. Finally, they will also work through and be exposed to the various financial aspects of banking: how does the market view a bank, why, what are the kinds of risks that a bank faces and whether/how they should be mitigated, as well as the importance of a strong corporate governance. The newly acquired skills and the new way of thinking are sure to help propel them and their organizations forward.
What are the biggest threats and/or opportunities facing the banking industry that this program can help leaders address or take advantage of?
The biggest threats facing the banking industry are both old and new: inadequate risk management, corporate governance, ineffective business models, risks arising from rising interest rates, technology risks, social media risks, among others.
At the same time, a deeper understanding of how to deal with these risks effectively can turn into opportunities. As an example, understanding and measuring risk exposures to the various risks, such as interest-rate, credit, liquidity, etc., and the decision to hedge some and how much – or take on some and how much, can turn risks into opportunities for further growth and profitability. Banks are expected to take credit risk, but how much and what kinds (e.g, commercial versus retail etc.) should they take?
Are there any specific activities/simulations/etc. that this program uses to help drive the learning?
The program uses cases to engage participants into deep conversations on real problems. We also use simulations such as a scenario planning exercise to decide how to effectively manage strategically along various banking scenarios. The benefit of a case method is the ability to put oneself into the shoes of the protagonist and decide on the problem he/she faces. The faculty lead with questions to dig deeper into the issues posed by the case and allow for an impactful exchange of ideas and learning among the participants.
What do you enjoy most about working/teaching in this field?
Banks are a pillar of the economy and society. Their importance is unquestionable. Working with leaders in this field is extremely rewarding given the impact of these leaders and their organizations to society. The problems that bank leaders are faced with are multifaceted, complex, difficult, and ever-changing. Leaders need to be equipped with skills and a way of thinking that allows them to succeed in this environment. Issues such as regulation, corporate governance, capital, liquidity, interest-rate/credit risk, technology etc., are complex and intriguing to work on to help bank leaders fulfill their organizations’ mission.
