Haas School Students to Manage New Socially Responsible Investment Fund

UC Berkeley Haas School Logo

Managing a socially responsible investment fund is one of the new learning experiences the Haas School is offering its graduate students for the first time this fall.

The new Haas Socially Responsible Investment (HSRI) Fund came about thanks to a $250,000 gift from Haas School alumnus Charlie Michaels, BS 78, and his wife, Doris. Michaels now serves as the president of Sierra Global Management, an investment management firm in New York City.

The fund will be managed by Berkeley MBA and Master's in Financial Engineering (MFE) students with the advice of an investment advisory committee and a Haas School faculty advisory committee. Its investment philosophy will be to achieve a balance between financial and social or environmental performance.

"To our knowledge this is the first socially responsible investment fund at a leading business school," said Kellie McElhaney, adjunct professor and executive director of the Haas School's Center for Responsible Business. "We expect this experience to train students for careers in socially responsible investing, but we also hope that our students will take their new-found skills to traditional Wall Street firms and raise awareness about social responsibility issues from inside the companies."

Students will start investing when the fund reaches $500,000, a goal McElhaney expects to reach within a few months. The center's ultimate goal is to raise the fund to $1 million.

The idea for the HSRI Fund was developed by McElhaney and Charlie and Doris Michaels at the Social Performance Metrics Conference, an event on metrics for corporate social responsibility that was held at Haas School in April 2005 with the participation of the London School of Business and Boston University.

"Doris and I are most gratified to seed the HSRI Fund, as it gives students a chance to apply their understanding of corporate social responsibility to real investment decisions," Charlie Michaels said. "The fund, and hence Haas, will also capitalize on the attractive returns coming from investments in companies that are socially responsible and have strong financial characteristics."

"We are tremendously grateful to Charlie and Doris for giving our school this opportunity to do something innovative that adds to our students' experience with investing for both social and financial value," said Haas School Dean Tom Campbell.

To gain some theoretical footing in this kind of investing, students managing the fund will be required to enroll in a new elective on socially responsible investing techniques, being offered by the Haas School for the first time this fall.

The HSRI Fund exposes Berkeley MBA and MFE students with a keen interest in corporate social responsibility or finance to the investing world's complexities, challenges, and rewards - both financial and social. A group of students will be chosen by a special committee to make investment decisions for the HSRI Fund's portfolio, taking on fund manager and portfolio analyst roles. The students will determine detailed socially responsible investment criteria, with a focus on companies using sustainability principles as a core part of their business strategies, practices, and investments.

The Center for Responsible Business will send out an annual call for applications for the HSRI positions to all Berkeley MBA and MFE students. The number of students who participate is expected to increase from five to ten as the fund grows.

In addition to the learning opportunities this fund provides, the center expects that the investment data to be gathered by the fund will help advance the methodology and the understanding of how well socially responsible investment funds can perform.

Berkeley Finance Club to Hold Inaugural Finance Conference, November 9

The Berkeley Finance Club will launch the Haas School's first-ever finance conference on November 9. The inaugural Berkeley Finance Conference, which will be held on campus, will focus on "Balancing Risk and Return Through Innovation."

Keynote speaker George Lee, head of the technology banking group at Goldman Sachs, will kick off the event with a speech about innovation in financial services. Dr. Reuven Glick, vice president for the Federal Reserve Bank in San Francisco, will offer the closing keynote on the state of the global economy.

The day-long event will feature six panel discussions. In the morning, attendees can attend a discussion about investment management trends and strategies to maximize returns while minimizing risks, a corporate finance roundtable, or a panel about the future of private equity. In the afternoon, conference participants will choose between panels discussing the emerging trends in investment banking, the valuation of non-conventional assets and technologies, or corporate social responsibility.

Panelists include William Thiessen, executive director at JP Morgan Securities; Nth Power partner Rodrigo Prudencio, MBA 00; Advent Chief Financial Officer Graham Smith; Ted Janus, partner at Palo Alto Investors; Deutsche Bank analyst Jonathan Goldberg; and others.

"We felt there was a need for this type of event," says Hemant Hebbar, MBA 08, vice present of marketing for the conference. "Many East Coast schools host annual finance conferences but there is not a similar type of event on the West Coast. This is one of the ways the finance club is working to bring Haas to the forefront of the finance industry."

Joining Hebbar, a student in the Evening & Weekend MBA Program, in organizing the event are conference co-chair Hull Xu, MBA 08, a student in the Evening & Weekend MBA program; co-chair Josh Bleharski, MBA 08, a student in the Full-time MBA Program; Berkeley Finance Club President Beidi Zheng, MBA 08, a student in the Evening & Weekend MBA Program; and Gilbert Tsang, MBA 09, a student in the Evening & Weekend MBA Program.

For more information, or to register for the event, visit http://www.haasfinanceconference.org.

Inside Innovation Conference To Highlight Haas Faculty Research, Nov. 17

The Haas School of Business will launch an Inside Innovation conference on November 17, highlighting new Haas faculty research on the role of innovation in business.

The all-day conference is being organized to celebrate the 50th anniversary of California Management Review (CMR), the Haas School's peer-reviewed practitioner journal. CMR's anniversary issue will focus entirely on Haas faculty research exploring various aspects of innovation.

Panel topics at the Inside Innovation conference will focus on Haas faculty research to be published in the anniversary issue of CMR. The panels are organized around the following themes:

  • "The Innovation Process: From Idea to Commercialization," which will present research by:
    • Professors Jennifer Chatman and Richard Lyons (currently on leave)
    • Jerome Engel, executive director, and Professor John Freeman, research director of the Lester Center for Entrepreneurship and Innovation
    • Professor Rashi Glazer
    • Professor Pablo Spiller
  • "Discovering and Launching New Product Blockbusters," which will present research by:
    • Professor David Aaker
    • Senior Lecturer Sara Beckman
    • Dr. Kay-Yut Chen, principal scientist, Decision Technology Dept., Hewlett-Packard Laboratories
    • Professor David Teece
  • "Breaking Tradition -- Driving Growth," which will present research by:
    • Lee Fleming, associate professor, Harvard Business School
    • Henry W. Chesbrough, adjunct professor and executive director, Center for Open Innovation
    • Professor John Morgan
  • "Creating Value in a Global Marketplace," which will present research by:
    • Professor Robert Cole
    • Professor Raymond Miles
    • Professor David Mowery
    • Associate Professor and Associate Dean for Strategic Planning Steven Tadelis

The panels offer an opportunity for attendees to participate in a rich dialog with the presenters.

The conference is presented by Accenture and is also sponsored by Deloitte. Its organizers include the Haas School's California Management Review, Management of Technology Program, and the newly established Institute for Business Innovation.

The conference will take place in the Arthur Andersen Auditorium. Registration opens at 8:30 a.m. The event ends after a networking reception in the Haas Courtyard and in the Bank of America Forum at 7:00 p.m.

To register or for more information, go to http://insideinnovation.haas.berkeley.edu/.

>play Conference to Explore Emerging Intersections of Industry and Technology, October 27

Students and industry leaders will explore the implications of shrinking computing devices and expanding business models at >play, the Berkeley digital media conference, on October 27 at the Haas School.

With a theme of current and emerging intersections, the third annual conference will examine how the interplay of technologies and ideas from disparate fields and functions are creating entirely new business models and changing the face of digital media and entertainment.

"Trends such as political candidates campaigning through blogs and MySpace highlight what's happening right now, and they hint at what the future may hold," says conference organizer Myah Evers Schwartz, MBA 08.

Paul Campbell, founder of Hewlett-Packard's Gaming Business Unit, will deliver the morning keynote address. A serial "intrepreneur," Campbell has launched four successful startups within Hewlett-Packard during his 21-year career.

Conference panels will focus on the impact of technology and digital innovation on specific industries and fields. Topics include: The Co-evolution of Marketing and New Media; Entrepreneurial Perspectives in Digital Media; Intersection of Casual and Hardcore Gaming; Beyond Mobile 2.0; Entertainment Inside and Out; Crossing the Digital Aisle; Digital Music; and The Social Impact of Social Networking.

In conjunction with >play, MBA students from the ten top US business schools will be invited to face off in the Haas School's Digital Media Case Competition, sponsored by Hewlett-Packard. More than $17,000 in prize money is at stake in this second annual competition, which will address challenges faced by Hewlett-Packard's Gaming Business unit.

For tickets and more information on the >play conference and the Digital Media Case Competition, visit: http://www.playconference.org.

MBA Association Raises $3,700 to Replace Students' Stolen Laptops

The Haas School's MBA Association (MBAA) has raised approximately $3,700 to offset the cost of replacing four classmates' laptops that were stolen at Caffe Strada two weeks ago.

"The MBAA initiated the fundraising effort to follow through on what we felt was a school-wide sentiment," says MBAA president Cliff Dank. "This was about helping our classmates recoup financially and emotionally and letting them know they have a huge support network."

Responsible for representing MBA students' interests, the MBAA officers reached out to the Haas community for donations to help students recover from the robbery. During the past week, over 150 students, faculty, and staff members responded by giving roughly $2,700 to the MBAA's fundraising campaign. The association provided an additional $1,000 donation.

The MBAA will now pass the donations to the four students affected by the robbery and allow them to decide how to disperse the donations. If students receive compensation from Caffe Strada or some other entity, the association will create a special initiatives fund with the donations and assemble a panel of students to determine an alternate beneficiary.

"We are really pleased with the outcome. Everyone was so giving and concerned for their classmates," says Dank. "It's our expectation that the money will go to the students."

Research Spotlight: Paving the Way with Good Intentions

A centuries-old proverb, "The road to hell is paved with good intentions," was the unlikely inspiration for new research by Professor David Levine.

The saying sparked Levine to think more about how, beyond wage levels themselves, an employer's intentions in setting a wage might affect workers.

"It's not just the fairness of the outcome, but fairness of the process that matters," explains Levine, the Eugene E. and Catherine M. Trefethen Chair in Business Administration.

To test that premise, Levine conducted a set of experiments with UC Santa Barbara economist Gary Charness. Their central question: Do people care about intentions, even when good intentions do not produce good results? They detailed the answer - a resounding yes - in a recent article in The Economic Journal.

"The bottom line for management is clear: There can be high costs to unfairly treating workers," Levine says. "The good news is that if low compensation or other outcomes are clearly due to forces outside the employers' control, workers may be much less likely to penalize their employer."

Levine and Charness conducted two sets of experiments with 244 college students, who were split into groups representing "workers" and "firms." The pair tested how intention influenced behavior by creating two different paths that led to the same outcome, or wage, for the workers: The firm gave a low wage (indicating bad intentions) and then good luck led to a wage increase, or the firm gave a high wage (indicating good intentions) and bad luck resulted in a wage decrease.

Levine and Charness then asked workers to choose an effort level: low, medium, or high. The pair compared workers' choices at different wage levels after good or bad luck intervened - decided by a coin toss - to create either good or poor business conditions.

They found that workers reacted strongly to the firms' intentions - indicated by how much it tried to pay - and much less to the higher or lower wage actually received after fate intervened to raise or lower workers' pay. For instance, Levine and Charness found that workers who end up receiving medium wages respond much more positively when they resulted from the firm offering a high wage but bad luck lowered the worker's pay than when the firm offered a low wage and good luck raised the pay.

"Workers frequently reward and almost never punish firms if they perceive good intentions, even if their own outcomes are not particularly good," Levine and Charness concluded.

Read Levine's article, titled "Intentional and Stochastic Outcomes: An Experimental Study."

Berkeley-Columbia Speaker Series Presents BearingPoint Executive, September 28

Aysin Neville, senior vice president in charge of the Global SAP practice for BearingPoint, will speak at the Haas School on Friday, September 28, at noon in the Wells Fargo Room, as part of the Berkeley-Columbia Speaker Series.

BearingPoint is a global management and technology consulting company. Neville, who is tasked with guiding BearingPoint's strategic relationship with SAP, came to BearingPoint following her stint as the Software Segment Eminent Leader for Deloitte in the high-technology industry practice. During her previous tenure with BearingPoint, she was a vice president in charge of leading the software industry practice as well as SAP, Peoplesoft, and Oracle practices.

Berkeley-Columbia Speaker Series events are free and are open to the entire Haas School community.

Faculty News

Richard Stanton and Nancy Wallace to Study Motivations to Exercise Stock Options

Associate Professor Richard Stanton and Professor Nancy Wallace have just been awarded a competitive research grant by the Society of Actuaries (SOA) to undertake the first large empirical study of the timing of executive stock option (ESO) exercise in the United States.

The timing conventions currently allowed for ESO valuation by the revised Financial Accounting Standard (FAS) 123(R), are due to expire at the end of December, 2007. The purpose of this study is to inform the design of future timing conventions. The SOA is the largest actuarial professional organization in the world and the Chairman of the Financial Accounting Standards Board, Robert Herz, is on record as pleased "that the Society of Actuaries is embarking on an effort of this kind."

Joining Stanton and Wallace is Jennifer Carpenter of New York University. The team will lead the effort in consultation with a special task force of stock option plan experts. For more information, visit

Kathleen Connell's Book Advises on Financial Planning for the Unexpected

Haas School Lecturer and former California State Controller Kathleen Connell provides practical advice on overcoming life's adverse financial events in her new book, Moving Up to Millions: The Life Calculator Guide to Wealth.

In her book, Connell, who teaches international business and corporate governance, profiles hypothetical families and individuals who address financial challenges and reposition their careers and lifestyles to redeem their finances. Aimed at readers at or near their peak earning years, the book also offers actionable tips the individuals and families follow on their way to financial freedom.

Connell's book includes a financial calculator that enables readers to create an unlimited number of personalized scenarios to calculate their optimal financial plan. The calculator is the only financial engine that incorporates both investment advice and personal "what if" simulations of life events in order to predict risks and offset them with pragmatic strategies.

Moving Up to Millions: The Life Calculator Guideto Wealth is published by John Wiley & Sons, Inc. For more information, visit http://www.wiley.com/WileyCDA/WileyTitle/productCd-0470131810.html?cid=RSS_WILEY2_BUSINESS. Connell's financial calculator is available at http://www.lifecalculator.net.

Haas in the News

Terrance Odean, the Willis H. Booth Chair in Banking and Finance I, was mentioned in a September 19 Motley Fool article titled, "Trading Secrets of the Super-Rich." For the full text: http://www.fool.com/investing/dividends-income/2007/09/19/trading-secrets-of-the-super-rich.aspx

John Morgan, the Gary & Sherron Kalbach Chair in Business Administration, was quoted in a September 19 Contra Costa Times article titled "Founder of law self-help firm returns," regarding the return of co-founder Ralph Warner to Nolo. For the full article: http://www.contracostatimes.com/search/ci_6881116?IADID=Search-www.contracostatimes.com-www.contracostatimes.com&nclick_check=1

Severin Borenstein, the E.T. Grether Professor in Public Policy and Business Administration, was quoted in a September 18 San Francisco Chronicle article titled "State regulators propose developing energy self-sufficiency by 2020." For the full text: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2007/09/18/BUMKS7VTF.DTL

Kellie McElhaney, the executive director of the Center for Responsible Business, was interviewed in a September 18 Wall Street Journal article titled "Haas Takes New Tack on Investing" about socially responsible investing at the Haas School.

David Aaker, the E.T. Grether Professor of Marketing and Public Policy, wrote a September 15 Wall Street Journal Business Insight article titled "Think Big," in which he introduces innovative strategies in winning market share.

Lenos Trigeorgis, a visiting professor, co-wrote a September 15 The Wall Street Journal Business Insight article titled "Stay Loose," regarding building flexibility into plans by breaking decisions into stages. For the full article: http://online.wsj.com/article/SB118841806712612518.html?mod=googlenews_wsj

Borenstein was quoted in several news outlets regarding the spike in oil price:
+ September 15 San Jose Mercury News article titled "$3 gas making a return." For the full article: http://www.mercurynews.com/mrroadshow/ci_6903116
+ September 14 Inside Bay Area article titled "Experts: Bay Area gas prices to spike." For the full text: http://www.insidebayarea.com/business/ci_6892003
+ September 11 San Jose Mercury News article titled "Gas cheaper here than in the Midwest." For the full text: http://www.mercurynews.com/breakingnews/ci_6864099?nclick_check=1

Henry Chesbrough, executive director of the Center for Open Innovation, was quoted in a September 11 CIO article titled "Open Your Doors to Innovation" about whether or not R&D is a core competency that companies have to own. For the full text: http://www.cio.com/article/136651/Open_Your_Doors_to_Innovation

Jerome Engel, the executive director of the Lester Center for Entrepreneurship and Innovation, was interviewed in a September 11 Bloomberg TV broadcast about the market for initial public offerings and the availability of cash in venture capital markets. To view the broadcast, visit: http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aCF52p8BuXJU

Rodrigo Rato, MBA 74, along with former Haas School Professor Janet Yellen, was quoted in a September 10 International Herald Tribune article titled "Possible U.S. economic downturn concern of world's central bankers." For the full text: http://www.iht.com/articles/2007/09/10/news/econ.php

Cynthia Kroll, a senior regional economist for the Fisher Center for Real Estate and Urban Economics, was interviewed in a September 7 KGO-ABC radio broadcast about Countrywide Financial Corp.'s plan to lay off 12,000 employees.

Happening at Haas

International Business Development Conference
Friday, September 28
8:45 a.m. to 5:30 p.m.
Arthur Andersen Auditorium
For more information, visit http://www.haas.berkeley.edu/HaasGlobal/IBDconference.htm.

BERC Annual Lecture with Dr. Richard Sandor
Tuesday, October 2
6:00 p.m. to 8:00 p.m.
Barrows Hall, Lipman Room
Richard Sandor will speak on how markets can be used to solve environmental problems and, simultaneously, create wealth.
For more information, email albertus@berkeley.edu or call 510-417-0144.

Undergraduate Admission Presentation: "Dispelling the Myths"
Wednesday, October 3
6:00 p.m. to 8:00 p.m.
Arthur Andersen Auditorium
Erika Walker, the executive director of the Undergraduate Program, will hold a presentation to educate prospective students about the Haas undergraduate admissions process.

Undergraduate Presentation: "Consulting Hints and Tips" with Deloitte Consulting
Wednesday, October 3
5:00 p.m. to 6:00 p.m.
166 Barrows Hall
This brief presentation will discuss consulting as a career, from delivering high quality client service to choosing the best hotel rewards program. The session will offer an opportunity to chat one-on-one with Deloitte practitioners about their experiences and gain perspective on the consulting profession. Food will be provided.
For more information, contact Heather Yan at heatheryan@berkeley.edu


LOS ANGELES ALUMNI - How Much Do Individual Investors Lose From Trading?
Monday, September 24
6:00 p.m. to 9:00 p.m.
The Jonathan Club
545 South Figueroa Street
Los Angeles
Los Angeles alumni are cordially invited by the Haas LA Alumni Association to a special evening with Professor Terrance Odean at the Jonathan Club Downtown.
For more information, contact Aaron Martinez at aaronmartinez@adelphia.net.
To register, visit http://www.acteva.com/booking.cfm?bevaid=138832.

CHICAGO HAAS/KELLY BUSINESS SCHOOL - Becoming a Senior Manager - Career Strategies That Work
Thursday, September 27
5:30 p.m. to 9:00 p.m.
The Westin River North, Lower Level, Grant-Lincoln Room
320 North Dearborn
Chicago Haas alumni are cordially invited to a presentation by a diverse panel of recruiters that will provide insight into the job search process and will help maximize resources to take your career to the next level.
For more information, contact Arik Pelkey, Chicago Chapter President, at arikpelkey@yahoo.com.
To register, visit http://www.kelley.iu.edu/alumni/calendar/event.cfm?key=CH070927.

EUROPE ALUMNI - Joint Alumni Business Conference
Saturday, September 29
8:15 a.m. to 6:00 p.m.
Swiss Re Centre for Global Dialogue
Gheistrasse 37, CH-8803 Ruschlikon
On behalf of a joint cooperation between our alumni chapter and other top-20 alumni chapters Haas School alumni are cordially invited to the first Joint Swiss Alumni Business Conference.
To register, visit www.alumniconference.ch.

NEW ENGLAND ALUMNI - Cross-Business School Happy Hour
Tuesday, October 2
6:00 p.m. to 9:00 p.m.
Julien Bar and Lounge, Langham Hotel
250 Franklin Street
Join alumni from Wharton, Sloan (MIT), INSEAD, IMD, Stanford, Stern (NYU), Tuck (Dartmouth), SOM (Yale), London Business School, Johnson (Cornell), Fuqua(Duke), Harvard, and Columbia for the monthly Cross Business Happy Hour.

UK ALUMNI - "Welcome to London" Pub Night, Quiz and Networking Evening
Wednesday, October 3
7:00 p.m. to 9:00 p.m.
Traffic Bar
1 Vernon Place
London WC1A 2EP (Nearest tube: Holborn)
Haas alumni in the United Kingdom are cordially invited to join the University of California Trust (UK) in welcoming students on the Education Abroad Program to London.
To RSVP, email Erin Dineen at erindineen@hotmail.com.

NEW YORK ALUMNI - Presentation "Understanding Relationships" by Professor Jennifer Aaker
Thursday, October 4
7:00 p.m. to 9:00 p.m.
The Michelangelo Hotel, Roman Room
152 West 51st Street
New York
New York alumni are cordially invited to hear Professor Jennifer Aaker discuss the psychology of consumer-brand relationships, and outline the basics of what it takes to build strong relationships between companies and consumers.
To register, visit http://guest.cvent.com/i.aspx?4W,M3,8b92485a-a745-4e4e-8530-3f9c6988b579.

For more information, contact Maggie Smith at

Shansby Marketing Seminar
Stephan Huff, PhD candidate at Haas School of Business
Thursday, September 27
4:00 p.m. to 5:30 p.m.
C250 Cheit Hall

Shansby Marketing Seminar
Qiang Liu (Cornell)
Thursday, October 4
4:00 p.m. to 5:30 p.m.
C250 Cheit Hall

Job Market Talk: Zsolt Katona (INSEAD)
Thursday, October 4
Time & location TBA

Job Market Talk: Kinshuk Jerath (Wharton)
Friday, October 5
Time & location TBA

For more information, contact Deborah Houy at

Chris Rider, PhD candidate, Haas School of Business
Wednesday, September 26
4:00 p.m. to 5:30 p.m.
C320 Cheit Hall

Maurice Schweitzer, Associate Professor, The Wharton School, University of Pennsylvania, "Envy, Undermining, and Deception"
Wednesday, October 3
4:00 p.m. to 5:30 p.m.
C320 Cheit Hall

For more information, contact June Wong at

"The Corporate Wealth Effect: From Real Estate Shocks to Corporate Investment"
David Sraer (ENSAE Paris)
Thursday, September 27
4:10 p.m. to 5:40 p.m.
C210 Cheit Hall

"Stakeholder Capitalism, Corporate Governance and Firm Value"
Robert Marquez (Arizona State University)
Thursday, October 4
4:10 p.m. to 5:40 p.m.
C210 Cheit Hall

For more information, visit http://groups.haas.berkeley.edu/imio/workshops2007.htm.

The Oliver E. Williamson Seminar on Institutional Analysis
(formerly IDS270)
"Federalism, Tax Base Restrictions, and the Provision of Intergenerational Public Goods," John Hatfield (Stanford GSB)
Thursday, September 27
4:10 p.m. to 6:00 p.m.
C325 Cheit Hall

"The Determinants of Dispute Resolution Mode in Inter-Firm Contracts," Joanne Oxley (Toronto)
Thursday, October 4
4:10 p.m. to 6:00 p.m.
C325 Cheit Hall

For more information, contact Maggie Smith at

Professor Gurhan Kok (Duke University)
Friday, October 12
2:00 p.m. to 3:30 p.m.
C250 Cheit Hall

For more information, contact Deborah Houy at

Anat Rafaeli, "On being the target of other people's anger"
Wednesday, October 3
12:00 noon
Tolman Hall 5101


"Digital Breadcrumbs - a Forensic Accountant's Journey through a Corporate Scandal"
Joseph Rosenbaum, Ernst & Young
Tuesday, September 25
12:40 p.m. to 1:40 p.m.
For more information and to RSVP, please contact BCLBE@law.berkeley.edu or call Phyliss Martinez at 510-642-0532.

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