To: Subcommittee on Centres – Planning and Priorities Committee of Council Re: Establishment of the Centre for Strategic Financial Management From: Gary Entwistle, Associate Dean of Research and Faculty Affairs Edwards School of Business Date: March 3, 2009 ******************************************************************** Name of Centre Centre for Strategic Financial Management Type of Centre Type A – The centre will be housed within the Edwards School of Business Academic Plan Goals and Objectives: An important goal for the University of Saskatchewan is to be recognized as a place of scholarly inquiry. An important means for achieving this recognition is through building identifiable communities of scholars, with their nexus situated at the University of Saskatchewan. As part of the Edwards School of Business Centre Investment Strategy, the goal of the Centre for Strategic Financial Management is to serve as the foundation for building a community of scholars fo‐
cused on the research areas of wealth management and corporate control (i.e., the building and monitoring of wealth), areas of significant importance to the academic and business (i.e., in‐
vestment and regulatory) communities. While primarily situated within the Department of Fi‐
nance and Management Science in the Edwards School of Business (ESB), the community of scholars which will make up the centre is envisioned to include faculty both across and beyond the borders of our University. The initial plan for building this community of scholars consists of four specific and self‐
reinforcing strategies: •
•
The establishment of scholar positions for faculty whose interests lie within the identi‐
fied research domain, and who are committed to building the profile of the centre. Funding a seminar series to attract leading academics and practitioners to serve as guest speakers. •
Sponsoring an annual research symposium on wealth management and corporate con‐
trol. •
Funding scholarships to attract top quality graduate students into the Department’s MSc Finance Program. Impact and Relationships: Through building a community of scholars, the Centre for Strategic Financial Management has the potential to significantly increase the research productivity and profile of ESB faculty, ini‐
tially and primarily in the finance area, but also in related fields such as accounting and strategy; collaborations with faculty members outside ESB, such as in law and public policy are also possi‐
ble. A highly visible and engaged research centre also increases ESB’s capacity to attract top quality graduate students into the MSc Finance program. The MSc Director plans to use the committed scholarship monies – refer the Resources and Budget section – to help attract up to two additional students each year into the MSc program. Additional monies raised through the centre will be used to further build the numbers of graduate students in Finance. Enhancing faculty’s research productivity, and further building graduate programs, clearly link the centre with the strategic plans of the University of Saskatchewan and the Edwards School of Business. 1 Scholarly Work: At present, four faculty members in the Department of Finance and Management Science in the ESB have expressed significant interest in being involved in the centre. All four faculty members have both strong research records and ongoing research programs in the areas of wealth man‐
agement and corporate control. •
Professor George Tannous, PhD (Rhode Island) Dr. Tannous has an extensive publication record in the area of wealth management, including three publications in the past two years. He is also currently supervising two MSc students work‐
ing in this area. Dr. Tannous is currently examining wealth management from the viewpoint of institutions such as pension plans, mutual funds, and the wealth management departments of banks, while incorporating into his analysis the governance structures of the institutions. Dr. Tannous sees this area of wealth management as underexplored and hence fertile for academic research. •
Associate Professor Marie Racine, PhD (California) Dr. Racine has published numerous papers related to wealth and risk management. These in‐
clude both academic and leading peer reviewed practitioner publications. The primary themes of Dr. Racine’s research are diversification, leverage, and risk measurement and management. Dr. Racine’s research on financial kurtosis recently won a best paper award from the Academy of Financial Services. Dr. Racine is the Director the MSc Finance Program and is actively involved in thesis supervision •
Associate Professor Dev Mishra, PhD (Connecticut) 1
Area of priority II.B of the University of Saskatchewan’s Second Integrated Plan is – To enhance the Uni‐
versity’s profile in research, scholarly and artistic work. Accelerating research momentum is also a priority area identified in the Edwards School of Business Strategic Plan (2008/09‐2011/12). Dr. Mishra’s research is primarily informed by agency theory. His recent research examines the cost of equity implications of various ownership structures such as family controlled, large shareholding, or excess control. He also examines the impact on equity of corporate govern‐
ance, analyst recommendations, litigation risk and earnings restatements. He also performs re‐
search using a comparative (or international) perspective. Dr. Mishra has a strong research re‐
cord and is highly sought after as a speaker at national and international conferences. He cur‐
rently is a co‐investigator on a substantial SSHRC grant, and is currently supervising a number of MSc Finance students. •
Associate Professor Zhenyu Wu, PhD (Calgary) Dr. Wu is an extremely accomplished and well connected new researcher with sixteen articles published or forthcoming in peer reviewed academic journals. These include journals on the prestigious Financial Times 40 list. Dr. Wu’s research builds on a strong theoretical background in agency theory, and utilizes unique datasets formed by his research teams. Amongst his cur‐
rent research topics are the activism of institutional shareholders, and the extent of entrepre‐
neurial finance in family business and venture capital financed firms. Dr. Wu’s research has re‐
cently been presented to the Federal Reserve Bank of Cleveland. Proponents Please find attached supporting letters from the following: •
•
Grant Isaac, Professor and Dean, Edwards School of Business Craig Wilson, Associate Professor and Head, Department of Finance and Management Science Centre Management The day to day operations of the centre will take place through the centre scholars, overseen by the centre director. The centre director will be the Department Head of Finance and Manage‐
ment Science – presently Associate Professor Craig Wilson. The director of the centre will pro‐
vide a yearly report of the centre’s accomplishments (e.g., number of scholarly or professional articles, research grants, speakers, symposia, number of graduate students, recognized external visibility of the centre, external participation in the centre’s activities) and finances to the Asso‐
ciate Dean of Research and Faculty Affairs at the Edwards School of Business – presently Profes‐
sor Gary Entwistle. Resources and Budget Resources to fully support the proposed activities of the centre for its first five years – from July 1, 2009 to June 30, 2014 – have been secured through a contribution from Murray Edwards. It is anticipated that additional funding will be available at the end of this five year period to ensure continued effective operation of the centre. To help ensure this, the centre director, in conjunc‐
tion with the scholars engaged in the centre, will be charged with developing a strategic plan to ensure appropriate funding is in place moving forward. SSHRC grants linked to the centre, along with funding from other academic or business sources, will form the primary features of the plan. The ESB is also fully committed to ensuring the long term success of the centre. In the unlikely case of a budgetary shortfall in the centre’s operations, the scope of the centre and its operations will be re‐examined. The following table provides an overview of the centre’s initial expenditures. Year 1 Year 2 Year 3 Year 4 Year 5 Years 1‐5 2
Scholars
$60,000 $60,000 $60,000 $60,000 $60,000 $300,000 MSc Schol‐ $15,000 $15,000 $15,000 $15,000 $15,000 $75,000 arships Speaker $5,000 $5,000 $5,000 $5,000 $5,000 $25,000 Series Symposium ‐ ‐ ‐ $10,000 $10,000 $20,000 Total $80,000 $80,000 $80,000 $90,000 $90,000 $420,000 Support Please refer the attached supporting letters from the Dean and Department Head. Governance Please refer the Centre Management discussion above. Systematic Assessment As noted in the Centre Management discussion above, the Director of the centre will report on a yearly basis to the Associate Dean of Research and Faculty Affairs. The Director and Associate Dean will meet to discuss the report. 2
It is important to note that the Edwards School of Business has an established scholar policy which gov‐
erns the awarding of scholar positions. These scholar awards are not contingent upon the approval of the centre, rather, this proposal envisages that the scholars’ most natural home is within this centre. MEMORANDUM TO: FROM: DATE: RE: Gary Entwistle, Associate Dean, Research and Faculty Affairs Edwards School of Business Jay Kalra, Chair, Planning and Priorities Committee of Council March 24, 2009 Centre for Strategic Financial Management Centre for the Advancement of Accounting Education ______________________________________________________________________________________ Thank you for joining members of the Planning and Priorities Committee on March 18th to discuss the proposals for the Centre for Strategic Financial Management and the Centre for the Advancement of Accounting Education. At the meeting, the Planning and Priorities Committee passed a motion recommending to Council that the centres be approved. The centres will therefore be presented to University Council for consideration for approval at the April 16th meeting. I invite you or another representative on behalf of the school to attend to speak to any specific questions which may arise in relation to the proposals. Committee members, in acknowledging that each of the proposed centres has substantial merit, have requested that the proposals be amended to highlight specific dimensions of these initiatives. In particular, the committee wants to see that these centres, in line with expectations accorded other recent and anticipated centres of this type, establish a mechanism by which the centres’ activities and progress towards meeting their goals (in such areas as research, programming and outreach) are clearly delineated, assessed and reported on. It is within this context, that I convey the Planning and Priorities Committee’s request, given the uniqueness of the placement of the Honours Project in Accounting Initiative within the proposed centre, that the proposal for the Centre for Advancement of Accounting Education include a set of target goals and measures of success specified as outcomes in relation to the initiative, and that a report on the centre’s success in meeting its objectives be submitted by the end of the planning cycle (year 2012). You may wish to consider framing these in a manner similar to the outcomes specified within the integrated plan, which begin with the statement, “By the year 2012, we will know we are on track if… .” …/2 In the future, a means will be developed which is consistent with the Framework for Assessment adopted by University Council and supports the recommendation of the Task Force on the Management of Centres to establish a review process to assess all centres on the achievement of their goals and objectives. The report in the interim may be submitted to the Planning and Priorities Committee. The committee also requested the accounting education centre proposal further elaborate on the benefit the centre will bring towards achieving the goals of the honours program, the uniqueness of the honours program within the field of accounting education, and the research synergies envisioned. Committee members agreed the proposal would be further strengthened by highlighting the centre’s uniqueness, in part by making reference to models and successes in other business schools, such as the Centre for Accounting Ethics at the University of Waterloo, which was cited as a highly regarded model within the accounting discipline. The Planning and Priorities Committee commends the school for advancing the initiatives to create the proposed centres in support of its integrated plan and welcomed the opportunity to review and discuss the proposals. It is in this manner that the committee becomes aware of innovative academic programming and research. If you wish to discuss any of the aspects outlined above, please do not hesitate to contact me. __________________________________ Jay Kalra, Chair, Planning and Priorities Committee c G. Isaac, Dean, Edwards School of Business Attachs: Framework for Assessment: Beyond Systematic Program Review Report of the Task Force on the Management of Centres. To: Dr. Jay Kalra Chair, Planning and Priorities Committee of Council Re: Establishment of the Centre for Strategic Financial Management Addendum to proposal of March 3, 2009 From: Gary Entwistle, Associate Dean of Research and Faculty Affairs Edwards School of Business Date: March 27, 2009 ******************************************************************** Dear Dr. Kalra: Following from your recent memo of March 24, 2009, I would appreciate you appending to our March 3, 2009 application to establish the Centre for Strategic Financial Management this addendum which addresses the specific concern raised in your memo regarding the Finance Centre. By the year 2012, we will know if we are on track with the Finance Centre if: • A regular seminar series has been developed attracting leading scholars to present their research at the University of Saskatchewan. • A research symposium has been held at the University of Saskatchewan on wealth management and corporate control. • There is an increase in the number and quality of students applying to study in the MSc Finance program. • Success on research grants (e.g., SSHRC Standard Grants) has been achieved by one or more of the centre champions, notably through tying the grant proposal to the centre activities. Department of Finance & Management Science Tel. (306) 966‐8418 Fax. (306) 966‐2515 January 7, 2009 Dr. Jay Kalra Chair, Planning and Priorities Committee University of Saskatchewan Re: Centre for Strategic Financial Management Dear Dr Kalra, I am writing this letter in full support of the proposed Centre for Strategic Financial Management within the Edwards School of Business. This proposal was the result of considerable discussion within our department, including at our departmental retreat in April 2007, and it represents the clear consensus of our group. Our departmental discussions eventually coalesced into a mission to promote excellence in research in the areas of wealth management and corporate control, which was unanimously supported by all department members. These areas will allow us to build on re‐
search strengths already existing within the department. In particular, it fits well with the research interests of Professors George Tannous, Marie Racine, Dev Mishra, and Zhenyu Wu, and it is pe‐
ripherally related to the work of other finance professors in the department. I believe that the centre will benefit the department, school, and university in a number of ways. By building a profile in an important research niche, it will make our department more competitive in recruiting faculty with related research interests. It also provides a visible outlet to communicate our research to the university and greater academic community. The existence of a successful re‐
search centre should also allow a greater opportunity to obtain external funding related to the re‐
search areas, most notably, from the Social Sciences and Humanities Research Council. Increasing the research output should also have a spinoff effect on our teaching and the undergraduate stu‐
dent experience. Allowing students to participate in research through attending the proposed speaker series and research symposiums is an ideal way the centre can enhance the student ex‐
perience. In conclusion, I believe that the Centre for Strategic Financial Management could play a significant role in improving the research productivity within the department, and through that, enhance the teaching and student experience. I am personally committed to the success of the centre and plan to play an important role as the Centre’s inaugural Director. Thank you for your consideration of this proposal, Original signed Craig Wilson, PhD Associate Professor and Head Office of the Dean
To:
From:
Date:
Re:
Professor Jay Kalra,
Chair, Planning and Priorities Committee, University Council
Professor Grant Isaac
7 January 2009
Application for the Establishment of a Centre in the Edwards School of
Business (Centre for Strategic Financial Management)
Dear Professor Kalra,
I would like to offer my thanks to you and your committee for considering the creation of a new,
Type A Centre in the Edwards School of Business to be called the Centre for Strategic Financial
Management. This Centre has my full support as it provides an excellent vehicle for accelerating
the research momentum in the Department of Finance and Management Science and it represents
a terrific partnership with our key donor, N. Murray Edwards.
The proposed Centre for Strategic Financial Management was identified as a priority initiative in
the Edwards School of Business Strategic Plan 2008/09-2011/12 and, as such, has been subject to
much consultation as is necessary with priorities identified in a strategic plan. Moreover, this
initiative is consistent with the University’s Second Integrated Plan, in particular, the priority to
enhance the University’s profile in the area of research, scholarly and artistic work (Priority Area
II.B).
The proposed Centre builds upon the research expertise and accomplishments of several of our
faculty members in the areas of wealth management and corporate control. Moreover, it is
designed to support and, in turn, be supported by our thesis-based M.Sc. Finance program.
The Centre is proposed as a Type A Centre at the University of Saskatchewan. It will be overseen
by a Director who is the Department Head of Finance and Management Science and who reports
to our new Associate Dean position of Research and Faculty Affairs here in the Edwards School
of Business.
The funds to support the first five years of the Centre’s activities are in place and have been
provided as part of a $1 Million gift from N. Murray Edwards. The five-year financial overview
for the proposed Centre is presented below:
1
Financial Overview (July 1, 2009 to June 30, 2014)
Scholars
MSc Scholarship
Speaker Series
Symposium
Total
Year 1
Year 2
Year 3
Year 4
Year 5
Totals
$60,000
$15,000
$5,000
$80,000
$60,000
$15,000
$5,000
$80,000
$60,000
$15,000
$5,000
$80,000
$60,000
$15,000
$5,000
$10,000
$90,000
$60,000
$15,000
$5,000
$10,000
$90,000
$300,000
$75,000
$25,000
$20,000
$420,000
It is the donor’s intention that the funding be used as a seed investment and that other donors be
pursued to support the ongoing costs of the Centre after year five when research contributions can
be clearly articulated and celebrated. As a contingency plan, if we are unable to secure ongoing
operating funds from an external partner, then the operating costs of the Centre will be supported
by the Edwards School of Business after a review of the Centre and its accomplishments.
If you should have any questions or concerns, then please do not hesitate to contact me.
Sincerely,
_____________________
Grant E. Isaac, PhD
Dean and Professor
Edwards School of Business
University of Saskatchewan
2