Page 1


W IN TER 2 0 1 9




2 0 1 9 DA R D E N










Help Darden say “yes� to innovative programs and enrichment of the education experience by making a gift to the Annual Fund today. The possibilities for how your annual gift will move the School forward are truly endless. Support an area of the School that matters the most to you: Area of Greatest Need Scholarships Faculty Excellence Global Impact


Make a gift today at





Samantha Hartog Darden School Foundation, P.O. Box 7726, Charlottesville, Virginia 22906 USA | +1-434-982-2151




he fact remains: It’s very competitive inside the Top 20 global business schools — perhaps even more so than inside the Fortune 100. This issue of The Darden Report focuses on Darden’s strongest advantage in the midst of rapid change: change itself. Knowing intently the world’s current and future expectations of work, business and leadership. The cover story spotlights Darden professors’ research on society’s increasingly codependent relationship with technology and the rise of artificially intelligent machines that will reshape the economy and how people live and work. As these pages show, Darden students will graduate into a world replete with innovation, where tech and ethics collide. A 2019 in which dinner bills are settled through online payment apps like Venmo, the economy threatens to overheat, and “shadow banking” conducts bank-like activities away from the light of the traditional banking system, posing risks to financial stability. In this environment, Darden students must graduate with a compass — not a map. Purposefully intense and rewarding for a lifetime, Darden’s learning experience recently earned the School multiple Top 10 rankings (Page 7) and attracted eight new talented professors to the faculty (for a total of 24 new faculty members over the past three years). These teachers, their ideas and the leaders they shape will help define modern business — just when it is needed most.

SCOTT C. BEARDSLEY Dean and Charles C. Abbott Professor of Business Administration



For more information or to make a gift, please contact us at:


Since 2006, the Jefferson Trust has provided more than $7 million to support 179 innovative new projects at the University of Virginia.

Jefferson portrait by Thomas Sully, courtesy of Monticello / The Thomas Jefferson Foundation


/ Winter ’19

F E AT U R E S 14 Artificial Intelligence and the Future of Work

AI will impact the workplace and reshape the economy and prospects for human employment. Professors Anton Korinek and Roshni Raveendhran weigh in on its benefits and consequences.

18 3 Threats to Strong US Economy The U.S. economy continues to roll, but looming threats at home and abroad may hinder its progress in 2019, according to three Darden finance and global economies professors.

20 Can Cities Rise on Entrepreneurial Ecosystems?


The Batten Institute’s Cities Innovating Tomorrow’s Entrepreneurial Ecosystem ( initiative examines how startup culture can position American cities for a dynamic and sustainable future.

24 Does a New Banking Crisis Lurk in the Shadows? Shadow banking — at last count, a $45 trillion global industry — is a growing phenomenon, and its risks to the global financial system should be tested.

28 Paying a Price for Online Payments

Professor Tami Kim finds that online payment systems like Venmo may have unintended social consequences, making relationships feel a bit too transactional — to the point of pettiness.


NEWS BRIEFS 7 Darden Ideas to Action 8 Student News 9 Rankings Update 10 Darden in DC 12 Faculty News


32 Alumni Spotlights

30 Faculty Spotlight: Doug Thomas

34 Call for Abbott Award Nominations

38 Paul Hamaguchi (MBA ’70)

34 Alumni News

40 Ruffner Page (MBA ’86)

46 In Memoriam

44 Nishita Henry (MBA ’03)

48 Corporate Sponsors

51 20 Questions: Doug Lebda (EMBA ’14), CEO, LendingTree

49 Alumni Leadership Boards








The Darden Report is published twice a year by the University of Virginia Darden School of Business Office of Communication & Marketing P. O. Box 7225 Charlottesville, Virginia 22906-7225 USA

LETTER FROM THE DARDEN SCHOOL F O U N DAT I O N P R E S I D E N T Scott C. Beardsley Dean and Charles C. Abbott Professor of Business Administration

The Drafting Effect

Michael J. Woodfolk President, Darden School Foundation

ith the fall season in the rearview mirror, it is important to reflect on fiscal year-to-date progress at the Darden School Foundation. I find myself drawing parallels to the peloton — a group of riders in a bicycle road race who group together to save energy, reduce drag and exploit energy to propel themselves faster than their competitors. This concept is comparable to the rising tide of alignment, energy, dedication, optimism about the future and goodwill that we are experiencing from a number of stakeholders, who — like you — want Darden to remain a leader among business schools. Over the past months, Darden hosted volunteers, board members, parents and alumni for events and meetings, all with the intent to move Darden forward as a leader in a highly competitive marketplace. Dean Scott Beardsley shared the state of the school and updates on Darden’s strategic priorities. Board members provided feedback on the mission statement and learned about Powered by Purpose, Darden’s upcoming campaign in support of UVA’s $5 billion Honor the Future campaign. The Darden School Foundation is also powered by purpose, supported by countless volunteers and donors who believe in the School’s mission and who are working together to achieve meaningful results. One

Juliet Daum Executive Director, Communication & Marketing EDITOR Jay Hodgkins ART DIRECTION AND DESIGN Susan Wormington WRITERS Simon Constable Emma D’Arpino Aaron Fernstrom David Hendrick Caroline Newman CLASS NOTES EDITORS Jenny Paurys Egidijus Paurys Liz Boone PHOTOGRAPHY Dan Addison Tom Cogill Ashley Florence Stephanie Gross Sam Levitan Jessica Patterson Susan Wormington ADDITIONAL PHOTOS Shutterstock COVER ILLUSTRATION The Karma Agency

The Darden Report is published with private donations to the University of Virginia Darden School Foundation. © 2019 Darden School Foundation Winter 2019, Volume 46, No. 1




hundred alumni led coffee chats around the world to introduce prospective students to Darden. Alumni class leaders are planning Reunion and inviting classmates to return to Grounds in April. Alumni hosted holiday parties in 16 cities around the world. Board members are executing on strategies to promote alumni and corporate engagement. All attendees enjoyed connection points with students and world-class faculty — a reminder about what makes this place special. Our trustees, leadership advisory board members, class and chapter volunteers, and donors are contributing to forward momentum. We invite you into the “drafting effect” of the peloton. We need you — whatever you can contribute, from wherever you are. As in the peloton, we take turns leading, to give rest to others who will be energized by your participation. It is your turn; please join us. Visit to learn how you can help with admissions, student life, philanthropy, alumni events and more. Thank you for your participation. I look forward to seeing you this spring at Reunion or at alumni events around the world.

Michael J. Woodfolk (TEP ’05) President, Darden School Foundation


Insights for Better Business

Watch video highlights of The New Story of Business on Darden Ideas to Action at Professors Ed Freeman and Bobby Parmar inspired a conversation about technology, innovation and ethics in San Francisco.

Can Silicon Valley Innovate and Be Responsible? Professors Ed Freeman and Bobby Parmar recently presented their talk, The New Story of Business, to a standing-room only crowd in San Francisco’s Financial District, emphasizing the increasingly critical intersection of tech and ethics. The professors described how companies can practice what they termed “responsible disruption” — maintaining an innovative approach without cutting ethical corners. “I come tonight with good news,” Freeman told the audience. “In my view, there is a revolution happening. It’s a revolution in

the way we think about business, and it is going on around the world. It’s being written by entrepreneurs; people working in high tech; social entrepreneurs; people who identify themselves as conscious capitalists, inclusive capitalists, capitalism 2.0; and those with a renewed interest in corporate social responsibility and sustainability.” Presented by Darden’s Batten Institute for Entrepreneurship and Innovation and Institute for Business in Society, the fall event was part of the new global Darden Ideas to Action thought leadership series.

The UVA Darden Ideas to Action website will start the new year with a new look and new thought leadership powered by actionable insights. Now partnering more deeply than ever with Darden’s research Centers of Excellence, faculty and experts, the site ( shares business knowledge — research, analysis and commentary. Content on the site is now presented with a richer array of multimedia, including podcasts, videos and interactive data visualizations. And when you read an article on Darden Ideas to Action, you’ll be connected to opportunities to explore a subject more deeply through Darden cases, white papers, online courses, programs and events. TOPICS encompass Darden’s academic areas with expert research, analysis and commentary. Examples include: • • • • •

Business, Ethics & Society Data & Analytics Entrepreneurship & Innovation Finance & Accounting Leadership & Management

COLLECTIONS provide an in-depth look at specific areas where Darden has expertise across disciplines. Examples include: • • • • • •

Design Thinking Investing Insights Stakeholder Theory Giving Voice to Values Modern Global Leadership Digital Transformation

This fall, Professor Ed Freeman received the 2018 Award for Distinguished Scholarly Contribution to Management from the Academy of Management.




CLASS OF 2018 Positive Career Outcomes, Record Incomes As reported in the 2018–19 Darden Full-Time MBA Employment Report, graduates of the full-time Class of 2018 joined a job market that is teeming with opportunity. Here are four ways the class advanced its passion and paygrade, with 94.4% receiving a job offer by three months after graduation.




$127,767 (3% year-over-year increase)




Our why is your work.


130+ 14

companies from

CLASSES OF 2018 AND 2019

View the report at: recruiters-companies/hire-an-mba/ employment-reports

New programs from Darden’s Batten Institute for Entrepreneurship and Innovation empower students to explore innovation, entrepreneur and technology-related career paths around the world.

(11% year-over-year increase)




industries hired Darden graduates

TOP CAREER CHOICES Consulting (31%) Financial services (26%) Technology (18%)

TOP HIRING COMPANIES McKinsey & Co. – 18 Amazon –17 Boston Consulting Group – 15 Bain & Co. – 14 JPMorgan Chase – 13

As all Darden students seek to create value as purposedriven leaders, they increasingly appreciate personalized career searches and recruiting both on Darden Grounds and off. The Career Development Center’s goal is to ensure that both students and companies obtain their optimal outcomes, and we will continue to innovate towards that end.” — JEFF MCNISH, ASSISTANT DEAN FOR CAREER DEVELOPMENT

See the full list of hiring companies: 8





Meet Second Year Award Winners in the Full-Time MBA Class of 2019

A SURGE OF TOP TENS Darden landed in the Top 10 among all ranked MBA programs in three major rankings updates this fall.

The Economist

CAITLYN UNSWORTH was awarded by faculty vote the Samuel Forrest Hyde Memorial Fellowship, as the student who has contributed most to the School’s welfare and shows the greatest promise of achieving a useful career. Unsworth serves as executive vice president of the Darden Student Association and was a summer consultant at Boston Consulting Group.

MERCEDES RODRIGUEZ was awarded by the marketing faculty the Class of 1987 G. Robert Strauss Jr. Marketing Award. An art history major from Yale University, she specializes in digital marketing. Professor Tom Steenburgh presented the award on behalf of the Marketing faculty.

Darden was named the No. 9 MBA program in the world by The Economist. The ranking takes into account factors such as student and alumni experience, career advancement and a supportive alumni network. The School was also ranked in specialty categories: No. 1 — Education Experience in the World (eight consecutive years) No. 1 — Student Rating of Faculty No. 1 — Student Rating of Overseas Study

Bloomberg Businessweek Weeks later, Bloomberg Businessweek tabbed Darden as the No. 9 MBA program in its ranking of U.S. business schools. The publication’s ranking methodology is based on two kinds of data inputs: surveys of recruiters, alumni and students as well as school-submitted information on career outcomes.

The Princeton Review The faculty announced three winners of the C. Stewart Sheppard Distinguished Service Award, which recognizes exceptional service of a nonacademic nature. JOHNNY MISHU serves as vice president for athletics of the Darden Student Association. Mishu played baseball at Princeton University and, before joining Darden, interned at Major League Baseball’s Office of the Commissioner.

KING ADJEI-FRIMPONG, a UCLA graduate, came to Darden after working at the Commission on Economic Opportunity, a nonprofit that promotes self-sufficiency for low-income and vulnerable populations in northeast Pennsylvania.

KIMBERLEY DIAZ serves as vice president for diversity for the Darden Student Association. Diaz’s startup education nonprofit, oneTILT, received support in 2018 from a fund backed by the Bill & Melinda Gates Foundation and the Chan Zuckerberg Initiative, among others.

The good rankings news continued as The Princeton Review followed with its 2019 rankings of 252 business schools, naming Darden to the Top 10 in nine categories, including: No. 1 — Best Professors No. 1 — Best MBA for Consulting No. 3 — Best MBA for Management No. 3 — Greatest Resources for Women No. 5 — Best Campus Environment No. 6 — Best Career Prospects No. 7 — Best MBA for Finance

WILLIAM MICHAEL SHERMET AWARD WINNERS Patrick Agahigian Vipasha Agrawal Grant Bickwit Kyle Blum Claire Brennan

Eileen Cowdery Stuart Ferguson Pedro Lemos Colin Leslie Daniel Manning

No. 8 — Best Classroom Experience Adelia Odom Caitlyn Pearson Caitlyn Unsworth Peter Weicher Tristram Worth

No. 9 — Most Competitive Students




As Amazon Invests in Virginia, Darden Bolsters Its DC Area Presence


MAZON ANNOUNCED in November that it would split the location of its second headquarters between New York City and Northern Virginia. UVA leaders applauded the company’s decision to build new headquarters at National Landing in Arlington, Virginia, just minutes away — precisely four metro stops — from the UVA Darden Sands Family Grounds in Rosslyn. Darden Dean Scott Beardsley responded, “We look forward to working with Amazon, which is already a top recruiter at Darden. We have roughly 100 alumni working there. Amazon is an incredibly diversified company. We can call it a ‘tech’ company, but it’s also a retail company and a tremendous transportation and logistics company that will offer jobs in a wide variety of roles.” Amazon’s decision promises to create immediate and lasting economic impact in the area, including more than 25,000 highpaying jobs over the next 12 years and a $2.5-billion investment. Home to the greatest concentration of UVA and Darden graduates, the D.C. area is a critical region for UVA and the focus of multiple efforts in recent years. Darden Professor Greg Fairchild, who was appointed UVA’s first director of Northern Virginia operations in 2018, said, “Amazon’s new location will enable us to strengthen our relationship and to develop a deeper, holistic set of collaborations that might include talent development, path-breaking research, corporate innovation, strategic leadership and community engagement. We look forward to working with our new neighbors.”



Amazon is an incredibly diversified company. We can call it a ‘tech’ company, but it’s also a retail company and a tremendous transportation and logistics company that will offer jobs in a wide variety of roles.” — DEAN SCOTT BEARDSLEY





Executive MBA Offers Best of Two Worlds In response to unprecedented demand for Darden’s D.C. area location, this fall the School announced several innovations to its Executive MBA formats. Starting with the Class of 2021, the 21-month executive formats — Executive MBA and Global Executive MBA — will operate primarily from the Darden Grounds in Rosslyn, with time spent in Charlottesville for professional enrichment and networking. “Students will get the best of both worlds,” said Darden Associate Dean for Executive Degree Programs and Leadership Initiatives Jim Detert. “They will have access to all that Washington, D.C., has to offer. They will also spend time at UVA, one of the nation’s top public universities. And they will have multiple opportunities to see different parts of the world through global residencies.” The program’s other curricular innovations include: • New “Explorations in Enterprise Leadership” courses on topics such as health care, leading in a volatile world, and challenges and opportunities in emerging markets will be presented in partnership with senior leaders from McKinsey & Co., the U.S. Army and the World Bank, among others. • A new, expanded professional advancement module will offer personalized career assessment and development tracks to help students establish and reach their career goals.

Darden, McIntire MSBA Off to a Strong Start UVA’s new Master of Science in business analytics, the University’s first joint degree between two schools — Darden and McIntire — is off to a strong start and welcomed over 40 students to its first cohort in August 2018. The program, which combines online learning with in-person residencies in Rosslyn, positions students at the forefront of business analytics in just 12 months. The program is currently accepting applications for August 2019 and expects to increase its class size.


Your Planned Gifts Lay the Foundation for Darden’s Future. Planned giving allows you the ability to address your personal financial needs and establish a powerful legacy at Darden. Planned gifts symbolize our human desire to reach beyond ourselves and build a better tomorrow. For more information, please contact: or +1-434-243-4825




Guess Who?

Can You Identify Darden’s Newest Professors?

Darden has added 24 new professors to the full-time faculty over the last three years. See if you can identify the eight who joined the faculty this academic year (or at least learn a little about them as you try).

Michael Albert, assistant professor, Quantitative Analysis

Shane Dikolli, associate professor, Accounting

Kinda Hachem, associate professor, Global Economies and Markets

Anton Korinek, associate professor, Global Economies and Markets

Sean Martin, associate professor, Leadership and Organizational Behavior

Michael Porter, associate professor, Quantitative Analysis

Roshni Raveendhran, assistant professor, Leadership and Organizational Behavior

Sasa Zorc, assistant professor, Quantitative Analysis

A. I explore how organizational and societal contexts shape individuals’ values and behaviors, I’m also a 90s hip-hop and basketball enthusiast.

B. Before coming to Darden, I won the teacher of the year award eight times teaching in various MBA formats at Duke’s Fuqua School of Business.

C. I come to Darden from Chicago’s Booth School of Business, and won awards for teaching excellence and outstanding policy-relevant scholarship in Canada.

D. My research focuses on using data and algorithms to design markets, and I will teach the “Data Science in Business” elective at Darden.

E. I recently earned my Ph.D. in decision sciences from INSEAD, but I’m also known for decisions at the poker table. I am a former professional poker player and met my wife playing poker.

F. My research focuses on understanding the future of work. Using a psychological approach, I explore how integrating new technologies into the workplace influences people in organizations.

G. I teach the “Artificial Intelligence and the Future of Work” elective — fitting for my research, which investigates the effects of automation and AI on inequality and unemployment.

H. Crime, terrorism, business, transportation safety — what do they all have in common? My time-series analysis research helps predict how events in those categories trigger subsequent events.

ANSWERS: A. Sean Martin B. Shane Dikolli C. Kinda Hachem D. Michael Albert E. Sasa Zorc F. Roshni Raveendhran G. Anton Korinek H. Michael Porter 12


When Jim Ryan took office as the University of Virginia’s ninth president on 1 August, he announced to the University community his goal to “make [UVA] the very best version of itself: a vibrant and diverse community of trust dedicated to discovery in service of the public good.” Ryan quickly launched Ours to Shape ( — an initiative seeking input from all members of the University community on their thoughts and aspirations for UVA. Through the process, Ryan hopes to create a shared vision for UVA’s future. The University’s upcoming $5 billion capital campaign, Honor the Future, will help it pursue that shared vision. The campaign will be the most ambitious ever for UVA and Darden, and the public phase will launch in fall 2019.


UVA President Jim Ryan Prepares to Honor the Future Through $5B Campaign

It is my hope that our University will be known as the one most determined to making the world a better place through the preparation of our students to be ethical leaders, through

our research and through our partnerships with the numerous communities we serve.” — UVA PRESIDENT JIM RYAN

New Courses Prepare Darden Students for the Future of Work Debut Darden Worldwide Courses

The new “Global Competitivess: A New Zealand Perspective” course led by Professor Alan Beckenstein will explore how businesses, government and other institutions have collaborated in New Zealand in the pursuit of economic-social well-being. Beckenstein has also taught executive education programs in the island nation for more than two decades. “Luxury and Exports — Italy,” a firsttime Darden Worldwide Course led by Professor Luca Cian and Dean Scott Beardsley, will explore Rome, fashion in Milan and wine in Tuscany to unearth why Italian brands compete globally.

“Experiential Leadership Development Lab”

As much as 50 percent of leadership skills are developed by doing, not learning, which is why Professor Bobby Parmar is taking students out of the classroom and out of their comfort zones. While they’re hooked up to biometric devices measuring their physiological responses, students will be put to the test in simulated leadership scenarios by actors and professional evaluators. Raising funds to further expand this new leadership learning lab into a resource for all Darden students and Darden Executive Education is a major philanthropic initiative for the School. WINTER 2019


Automation and Smart Tech Shape “The Future of Work” BY DAVE HENDRICK 14



magine that an observer from another galaxy descends to earth and sees entities called humans and entities called machines interacting with each other. How would the observer answer the question: “Which entity controls the other?” In a recent paper, Darden Professor Anton Korinek presents the thought experiment as a part of a broader consideration meant to put society’s increasingly co-dependent relationship with technology into context. “Determining which entity is in control would not be simple,” said Korinek, who joined Darden at the start of the 2018–19 academic year and holds a joint appointment with the UVA Department of Economics. “Sometimes the machines start beeping, and we tend to them and follow their instructions and commands. When they cry, we plug them into little outlets and give them food again,” Korinek said. “The observer from another planet would probably think that both humans and machines are moderately intelligent entities with different strengths, and they live in some sort of mutual symbiosis, as biologists would call it.” According to Korinek, people tend to take a distinctly human-centric view of the agents of activity in our economy — putting humans at the center — while discounting the rising impact of the machines. Korinek is one of many Darden School professors grappling with the rise of artificially intelligent machines and their consequences, from the ways they impact workplace behavior to how their proliferation will reshape the economy and the prospects for human employment in general.

A Significant Disruptor to the Status Quo Artificial intelligence (AI) is something of a catchall term for the ability of machines to perform tasks that would traditionally require human intelligence. Conditioned by decades of science fiction movies and novels, most people tend to think of AI as a technology of the future, but in reality millions of people are already using applications powered by AI each day, from personal digital assistants like Apple’s Siri and Amazon’s Alexa to recommendation engines used by companies such as Spotify and Netflix. A 2018 report from the McKinsey Global Institute places AI into five categories: computer vision, natural language, virtual assistants, robot process automation and advanced machine learning. The report says the rise of AI will likely usher in “unprecedented” changes in the way people live and work. Arguably, AI is already doing just that, as anyone who has ever taken a ride in one of Uber’s driverless car pilots can attest. As can any manager who oversees one of the many warehouses where a busy collective of automated robots stock and load everything. How Will AI Affect the Workplace? According to the World Economic Forum’s “The Future of Jobs Report 2018,” AI is one of the four specific

technological advances driving change in business in the period from 2018–22, joining widespread high-speed mobile internet, big data analytics and cloud technology as significant disruptors to the status quo. Professor Roshni Raveendhran is among the Darden faculty exploring how new technologies are affecting the workplace. Raveendhran, who, like Korinek, joined Darden this year, is broadly concerned with how organizations integrate new technology into the workplace and how that technology impacts workers and organizational behavior. Raveendhran’s dissertation, “Technology, Behavior Tracking and the Future of Work,” considers the implications of behavior-tracking devices in the workplace and the implications of society’s general collective comfort with them in our lives and professions. “What does it mean when your company gives you a Fitbit? What does it mean to be an employee and accept those devices?” Raveendhran asked. “What does the device mean for your personal privacy versus the benefits that you could get?” It’s the sort of research that would have seemed futuristic even a few years ago but has broad implications in 2018 as monitoring technology is embedded in a variety of devices with a multitude of functions. While activity tracking

5 CATEGORIES OF ARTIFICIAL INTELLIGENCE 1. Computer vision 2. Natural language 3. Virtual assistants 4. Robot process automation 5. Advanced machine learning Source: McKinsey Global Institute



What does it mean when your company gives you a Fitbit? What does the device mean for your personal privacy versus the benefits that you could get? — PROFESSOR ROSHNI RAVEENDHRAN

Roshni Raveendhran, above, and Anton Korinek, opposite, both joined the Darden faculty in the fall of 2018. Raveendhran teaches in the Leadership and Organizational Behavior area and Korinek teaches in the Global Economies and Markets area.

tied to employee wellness programs might seem innocuous to many employees, such employer programs could be only the tip of the iceberg moving toward a future in which behavior tracking begs increasingly difficult ethical questions. “Today it’s a Fitbit. Tomorrow it might be an Oculus virtual reality headset. Three years from now, it might be a microchip implant in our bodies that would do something for us,” Raveendhran said. “But we as a society are open to it, and this would not be something that we would be open to 50 years ago.” Beyond wearables and other monitoring devices, Raveendhran’s research considers how new technological entrants change the workplace. She has begun to study implications when an autonomous robot joins a team, such as how behaviors and decisions within the organization change. The Benefits of AI Seem Obvious. But Are the Consequences? To give a sense of the disruption, the World Economic Forum report predicts 42 percent of task hours among studied industries will be performed by machines by 2022, up from 29 percent in 2018. And in a nod to the complexities, the report lists “Advances in Artificial Intelligence”



on both the lists of trends that will positively and negatively impact business growth through 2022. “There are complex feedback loops between new technology, jobs and skills,” according to the World Economic Forum report. “New technologies can drive business growth, job creation and demand for specialist skills, but they can also displace entire roles when certain tasks become obsolete or automated.” Korinek, who has turned his focus to the likely economic fallout from an AI-powered age of automation, is asking what it means for the future of the economy, work and humanity. He says he is not optimistic about the long-term outlook for any of the three, barring some sort of course correction. “I think there is a serious risk that, as new technology and automation develops further and further, we will actually end up in a situation where at first a small, then growing fraction of the population won’t find gainful employment anymore,” said Korinek, who will teach the elective “Artificial Intelligence and the Future of Work” this academic year. Yesterday’s assembly line worker replaced by a machine is tomorrow’s The Washington Post journalist or Uber driver displaced by writing and driving AI. In his 2017 paper “Artificial Intelligence and Its

Implications for Income Distribution and Unemployment,” co-authored with Nobel Laureate Joseph Stiglitz, Korinek lays out tactics to assist those who may lose out to AI-spurred automation: a model of taxation that could be used for compensation, changes to patent law, and interventions the government could take to assist workers and “insure them against the adverse effects of innovation.” A society unwilling to grapple seriously with questions of increased automation may see large swaths of the populace resist attempts at innovation efforts, the authors wrote. What Defines Us as Humans Although increased efficiencies and automation in means of production have been a constant in the development of the modern working world since the Industrial Revolution, Korinek said the coming epoch feels distinctly different from previous eras. “Up until now, machines have replaced

our physical strength, but they have allowed us to leverage our intellect and intelligence,” Korinek said. “AI is really coming for what has always defined us as humans. It’s coming for our last bastion of advantage over the machines. And that changes the game fundamentally.” It’s an issue that has been at the forefront of much of Professor Ed Hess’ work, whose 2017 book Humility Is the New Smart: Rethinking Human Excellence in the Smart Machine Age says that humans will need to excel at doing the types of thinking and the emotional skills that AI won’t be able to do well. Korinek’s latest project considers what it means for an economy in which humans and machines, or “artificially intelligent agents,” are increasingly interacting on an equal footing. Korinek’s work shows that while the human-driven economy has been relatively stagnant for the last decade, the machine-driven economy has been booming, showing doubledigit growth for the past two decades. It’s a disparity that does not show signs of abating. “At first I thought it was a completely futuristic project that was important because we are moving so fast in that direction. But the more I’m working on it, the more I notice that we are already seeing in the present several of the implications that my model of artificially intelligent agents would predict for the future,” Korinek said. “That’s a little bit scary.”

“AI is really coming for what has always defined us as humans. It’s coming for our last bastion of advantage over the machines. And that changes the game fundamentally.” — PROFESSOR ANTON KORINEK



Amid Strong US Economy, 3 Threats to the Boom


ost economic crises fade quickly into blurry memories, but the same can’t be said of the mortgage meltdown and Great Recession of 2007–09. A decade later, concerns of a repeat are front of mind for three of Darden’s top economics and finance professors.



For 2019, the worries are related to a broad range of economic and financial matters. However, all are within a broad theme. The

risks of financial market mishaps are now higher than usual, both in the U.S. and abroad, the professors say. Among other things, that raises the possibility of the first U.S. recession in a decade. To be clear, none of the Darden experts see a carbon copy of the prior global financial crisis, only similarities. As one modern proverb often attributed to Mark Twain goes: “History doesn’t repeat, but it often rhymes.”



The Consequences of an Overheated Economy

“I see a 50 percent chance of a U.S. recession in the second half of 2019, depending on how fast the Federal Reserve raises the cost of borrowing money,” says Professor Alan Beckenstein, who teaches in the Global Economies and Markets area at Darden. The problem Beckenstein sees is that the U.S. economy has been expanding at an unsustainable rate and interest rates are rising. Those two things together have the potential to shock the economy into a recession, he explains. If the rate hikes are slower than expected, then a recession could come later.   Even before the Trump administrationbacked tax cuts, the U.S. economy was booming. The tax cuts added fuel to an already roaring fire, Beckenstein says. “Who thought we’d have an expansionary fiscal policy at full employment?”  As the economy accelerates, and the Fed wishes to prevent inflation from rising, interest rates will rise faster than previously expected, and that will cause the price of bonds to tumble, possibly quickly and significantly. Many small and large investors own bonds. Such a bond-market drop could cause a “negative wealth shock,” meaning bondowners could feel poorer and close their wallets — potentially sending the economy into a recession.

For more insights from Darden faculty and industry experts on the economy and 2008 financial crisis, see coverage of the 2018 University of Virgina Investing Conference at



Ripples From Global Currency and Commodity Shocks

Last year’s surge in the value of the U.S. dollar and resulting fall in some emerging market currencies also has the potential to cause a crisis. “Very great stresses are associated with currency declines,” says Dean Emeritus and University Professor Bob Bruner, who has studied past financial crises extensively. Falling commodity prices can create a similar crunch, he says. “The panic of 1837 resulted from sharp movements in the price of cotton, and the panic of 1857 was caused by the plummeting price of foodstuffs after the Crimean War in 1856,” he says. “These are very interesting stories because the shock often occurs well before the crisis.”  Some countries experienced an economic shock in 2018. As the greenback rallied last year, money fled emerging economies in favor of the U.S. The result for some countries was a brutal crash in the value of their currencies. The Turkish lira and Argentinian peso were two of the worst hit. Other nations saw their currencies weaken as well.  Many such countries borrowed money denominated in dollars, Bruner says. Massive currency depreciation means that the costs of paying the debts spiral up when measured in local currency. Put simply, some countries went from swimming in debt to submerged in it.  However, a larger problem would come if these countries stop paying the banks that lent them money. That would hit profits at the financial institutions and could also hurt anyone who loaned money to those banks. That’s how the crisis in 2007 spread across the world: from bank to bank to bank. Bruner cautions that this doesn’t mean the global financial system will grind to a halt. “I don’t think the financial system is anywhere near as vulnerable as it was in 2007,” he says. However, it could cause banks to lend less freely.



Exchange-Traded Funds in Uncharted Territory

A financial innovation that came of age over the last decade has the potential to exacerbate a fall in stocks. In other words, a dip in the S&P 500 might quickly morph into a plunge. “I am concerned about how exchange-traded funds (ETFs) perform when we finally have a down market,” says Professor Rich Evans, who teaches about investments and portfolio management. ETFs are unique in that they hold diversified securities, like mutual funds, but are bought and sold on an exchange, like stocks. Use of ETFs has exploded since the financial crisis. Globally, there are now more than $5 trillion of assets in ETFs, according to the website TrackInsight, up from under half a trillion in 2005. The enormous volume concerns Evans because the way these securities trade is not the same as individual stocks, which could leave investors without an easy way to buy or sell their ETF shares. Here’s how: ETF dealers make money off the difference between the price at which they buy and sell shares. Ideally, ETF dealers end each day having bought and sold the same number of shares. That way the dealer profits regardless of whether the market rises or falls. But sometimes there’s a mismatch. For instance, a dealer may sell far more shares than it had available to send to customers. In this example, the ETF dealer should create more shares. However, Evans discovered that sometimes dealers don’t do that. Instead, they wait days to create those shares and, in doing so, increase their effective leverage, running the risk of losing money or even going bust if the stock market swings the wrong way and they are not fully hedged. Because of the huge total net assets invested now in ETFs, this could potentially exacerbate a market nosedive. WINTER 2019


Can Cities Rise on Entrepreneurial Ecosystems? BY DAVE HENDRICK




Entrepreneurial activity is concentrated in large markets more than ever, but small and midsized cities increasingly view startup culture as a key ingredient to a thriving future. A new Darden project aims to unearth how those cities can build an entrepreneurial ecosystem.

im Frazier goes to work every day attempting to turn a midsized, industrial city in the Midwest into a hotbed of entrepreneurial activity. Frazier, the director of growth initiatives for The Entrepreneurs Center, a business incubator and accelerator based in Dayton, Ohio, and her coworkers are learning how to position a community with inherent challenges and unique assets for a future that is both dynamic and sustainable. Although home to two large research universities, the Air Force Research Laboratory and the WrightPatterson Air Force Base, Dayton — known as the “Birthplace of Aviation” due to the pioneering aeronautical work of Orville and Wilbur Wright — has been hit hard by the manufacturing losses of recent decades. Part of the solution toward reversing the trends, Frazier contends, lies in spurring entrepreneurial activity to be less dependent on government funding and legacy industries. To “build new bakeries” instead of simply seeking a larger slice of the pie, she says. “One of the things that we have very strongly felt is that, instead of being attached to those manufacturing jobs or the federal budgets of the Air Force Research Lab, we could be in charge of our own economy, supporting entrepreneurs and letting entrepreneurs build the next generation of jobs,” said Frazier, who returned to her hometown after a career in international development work. “We’re trying to control our own economic prosperity instead of being so vulnerable to outside decisions that we can’t control.” The development of a true entrepreneurial ecosystem is a journey. Frazier says Dayton is in the early phases of that journey as it works to partner with universities, explore commercialization opportunities arising from area R&D efforts and build a network of angel investors. There’s cause for optimism, Frazier said. They have seen some early “base hits” — a company called Battle Sight Technologies that produces a luminescent writing instrument for use by the military and first responders is particularly promising — but the region has a long way to go before homegrown entrepreneurship truly moves the needle on the region’s fortunes.

“We’re making progress,” Frazier said. “But it’s really hard.” That sentiment is echoed in cities around the country — from Detroit, Michigan, to Durham, North Carolina — each with their own unique stories of success and failure.

FROM BOOM TO BUST TO BOOM? A new project led by Professor Mike Lenox and Darden’s Batten Institute for Entrepreneurship and Innovation seeks to answer a host of long-running questions on developing entrepreneurial communities in small to midsize cities. What factors drive their emergence? How does one sustain growth, rather than succumb to a boom and bust cycle? And how do communities deal with the consequences of a suddenly rich environment for venture creation? Called, or Cities Innovating Tomorrow’s Entrepreneurial Ecosystems, the project will feature professors from Darden and partner Where US Entrepreneurial universities, including the Dynamism Lives Now University of Colorado and According to a 2017 report Babson College. The initiative will include a roundtable in early from the Economic Innovation 2019 with mayors from midsize Group, five large metropolitan cities across the country, as the areas accounted for the same initiative seeks to isolate net increase in new companies what is working and identify how founded from 2010–14 as the to address common pain points. Lenox comes to the issue rest of the country combined. of developing sustainable entrepreneurial ecosystems with AVERAGE ANNUAL STARTUPS personal context. He grew up in Trenton, New Jersey, which never HOUSTON – 8,300 recovered from the decimation DALLAS – 9,240 of its once-booming industrial manufacturing base. MIAMI – 13,900 “There are lots of industrial LOS ANGELES – 21,870 cities that have the same pattern: NEW YORK – 36,770 They once were entrepreneurial hot beds and eventually evolved SOURCE: Business Dynamics Statistics, U.S. to where they struggled economCensus Bureau. A startup is defined as any firm less than a year old. ically,” said Lenox. “How do you avoid that fate?”



SMALL CITY HOTBEDS FOR BIG BUSINESS While entrepreneurial dynamism thrives in major metro areas, many small and midsize cities with a population of 60,000 to 500,000 are hubs for business with the potential to grow their entrepreneurial ecosystems.

An interactive version of this map can be found at inc_fortune_unicorn.html.

number of companies as represented by circle size 1





Lenox said one often overlooked factor in the rise and fall of cities could be the natural lifecycle of entrepreneurial dynamism. “If you look at technology, there are predictable lifecycles we see across industries, and they have interesting patterns. Early in a new technology, you get massive entry with lots of different ventures entering into these spaces, and then there is a shakeout,” Lenox said, citing the boom and bust of automobile-dependent Detroit as an example. “What I wonder is if those same dynamics might help explain the ebb and demise of certain cities.” Lenox noted that the region most identified with growth via entrepreneurship, Silicon Valley, is on arguably its fourth life cycle, with the dominant industry passing from the U.S. military to microprocessors to software to internet and social media companies. Although such sustained resilience is the outlier, many midsize cities that fell on hard times are well into the comeback stage. While Trenton continues to struggle, Pittsburgh, for example, is considered a 22


leader in health care, artificial intelligence and leading-edge engineering startups.

CREATING INSIGHTS FOR TOMORROW’S ENTREPRENEURIAL ECOSYSTEMS Why have some cities been reborn, while others continue to struggle? Is entrepreneurship a significant part of the answer? How does a city build an entrepreneurial ecosystem? Those are questions the Darden School has long focused on answering. Several Darden professors lead research and initiatives focused on the formation, sustainability and auxiliary impacts of entrepreneurship from a variety of angles. • Professor Sankaran “Venkat” Venkataraman’s 2003 paper “Regional Transformation Through Technological Entrepreneurship,” with its then-novel consideration of the relationship between intangible assets and a community’s entrepreneurial outlook, provided a useful framework for a generation of entrepreneurial thinkers.

The data includes the companies that featured at least once in the Fortune 1000 list between 1996 and 2014.

• Professor Greg Fairchild has devoted much of his professional career to studying how entrepreneurship is practiced and sustained in communities with little resemblance to Silicon Valley — small towns, rural communities and gentrifying urban markets. • Professor Saras Sarasvathy’s theory of effectuation, with its accessible framework for spurring entrepreneurial action, has become a global phenomenon, influencing the practice of entrepreneurship from Darden to Brazil to Bangalore. The project does not aim to determine how a city becomes the next Silicon Valley, according to Batten Institute Executive Director Sean Carr. Lessons from outlier innovation hubs are not particularly useful for the Daytons of the world. Instead, the Batten Institute is researching cities of roughly equal size to compare their entrepreneurial trajectories and potential. The project goes further by considering the consequences of a community’s entrepreneurial success for all stakeholders

In s i gh t

— from widening income gaps and housing costs to crowded streets and schools. It’s the “be careful what you wish for” aspect of creating a booming microclimate for venture creation. “We’re interested in understanding how the unique endowments of small- and medium-sized cities make them more or less likely to cultivate a culture of entrepreneurial action,” Carr said. “Perhaps more importantly, we will question whether entrepreneurial activity allows these communities to prosper.” Initial output from the project includes: a series of case studies authored by Jayson White, the former special assistant to the mayor of Oklahoma City and co-author of The Next American City: The Big Promise of Our Midsize Metros, and a robust set of accessible data tools constructed by Darden Associate Director for Research and Faculty Support Asif Mehedi (MBA ’12) exploring the entrepreneurial potential of U.S. metropolitan areas. The data tools were recently put to use by policymakers in Virginia, who asked the Batten Institute for help in the state’s application for regional opportunity zone designation from the federal government. The designation offers investors tax incentives on investments made in certain census tracts, potentially attracting capital to investment-starved regions. researchers have also devised what they call an Entrepreneurial Readiness Index for Virginia, measuring more than 20 components of entrepreneurial potential, from the percentage of the population with a high school diploma to the number of breweries and wineries within 10 miles. “There are multiple forces at play that likely drive a community to be more entrepreneurial than others,” Lenox said. He cites proximity to a research university, a highly educated workforce and access to early stage capital as three foundational factors. “More broadly, there is a general sense that vibrant entrepreneurial ecosystems have a strong community and network of people who are able to support one another as they pursue their ventures, which is interesting because you have to get started before it even exists.”


The project seeks to determine the degree to which various interventions, which could be anything from a professional sports stadium to venture incubators and accelerators, aid in catalyzing those natural advantages. “It’s tricky to see when they work and when they don’t, but that’s part of what we are going to try to unpack, the role of interventions like incubators,” Lenox said. “They are all the rage, but how much do they actually impact the lives of entrepreneurial ecosystems? Clearly, they are helpful and they are influential, but are they enough?” Those are questions Frazier in Dayton would love to know the answers to, as she and her colleagues engage in the long process of trying to reorient the city to be more conducive to entrepreneurship. For now, The Entrepreneurs Center is taking many of the steps Venkataraman first posited in his 2003 paper: • Seek to instill a culture and mindset change by developing the necessary human capital. • Change cultures within partner universities and other idea-generating institutions. • Foster collaboration where there once were silos. “We’ve realized it’s really about finding the people and the pathways and the knowledge to take us to the next level,” Frazier said. “We have been open about trying to find them, because if there’s anything we will tell you, it’s that we don’t know what we’re doing.” As the project continues to produce a body of accessible insights and actionable tactics, there’s likely to be a receptive audience in Dayton and scores of small and midsize cities across the U.S. hungry for guideposts on the path forward.

The ‘Main Street’ View of the Value of Entrepreneurship


rofessor Greg Fairchild has devoted much of his academic work to entrepreneurship on “Main Street,” in part because so few others were doing so. He believes it is useful to divorce concepts of entrepreneurship from some of the popular, tech-centric conceptions of the practice. “Entrepreneurship is agnostic about who the person is. It’s a concept that should and does exist in all communities,” Fairchild said. “We need to learn about entrepreneurs who are in the communities that we often don’t associate with entrepreneurship.” In a previous role as executive director of UVA’s Tayloe Murphy Center, Fairchild crisscrossed the state giving talks to underserved communities on strategies to boost entrepreneurship and business growth in Virginia. The work is personal for Fairchild, who spent his later adolescence in Campbell County, Virginia, a region hit hard by declining fortunes in tobacco farming and manufacturing. Fairchild recounted a trip to the rural Eastern Shore to discuss a strategy for creating economic and entrepreneurial growth. He shared specific tactics such as achieving scale through the combination of smaller firms, sharing technology, and creating a community collective investment group in which individuals and businesses could pool funds to assist area firms with capital needs or establish new businesses. The Eastern Shore community took Fairchild up on the suggestion to create a public-private business assistance fund, a development Fairchild called one of the more rewarding of his professional life. Fairchild’s work includes continuing to spearhead the Tayloe Murphy Resilience Awards, which spotlight Virginia businesses that have thrived in economically challenged communities. The goal, in part, is to demonstrate the value of ventures in the health of a community. “That was directly tied to this accepted wisdom that Main Street was going to fall apart,” Fairchild said. “If you’re showing that there are successful businesses there, and we find ways to support those businesses and help them grow, we help those underlying communities.”



Does a Crisis Lurk in the Shadows? Shadow Banking Emerges as Growing Risk to the Global Financial System By AARON FERNSTROM (GEMBA ’15) 24


A man walks into a shadow bank. Intrigued by mainstream journalists’ investigations into predatory lending practices, on 16 August 2018, I walked into a type of shadow bank. It was a pleasant-looking storefront, flanked by a mattress store and a doughnut shop, in an everyday strip mall. I was interested in the first-person experience of how one type of nonbank lender interacts with someone claiming to be their target customer. When I walked through the door, every eye in the sales department surveyed me. A wide-smiling man, introducing himself as the branch manager, invited me to sit with him at his desk. Before I could say a word, the manager said, cheerfully, “I’m so glad you came in, sir. We would be very happy for you to apply for one of our loans.” He continued: “The whole thing only takes a few minutes. You make an online profile, fill out a few questions, and that is it. We can do it now together, if you like.” Realizing I was out of my investigatory depth, though still wanting to learn, I said, “Is there anything I can take home and read? Is this like a loan from a bank?” “No, sir,” he responded, “we are definitely not a bank.”

When reviewing shadow banking, one thing is clear: It is a huge and growing phenomenon. By the end of 2016, it was over $45 trillion and had grown by 50 percent over the previous six years (Figure 1). Since shadow banking can refer to many things, the first thing needed when discussing the topic is to define it. “Shadow banking” refers to two parallel activities. 1. Any credit intermediation (e.g., lending) conducted by an institution not regulated as a traditional bank

In terms of nonbank credit intermediation, the term “shadow” simply refers to these nonbank credit intermediaries operating without the same regulations as traditional banks. Shadow banks engage in banklike activities (e.g., intermediation of credit, liquidity and maturity transformation) while operating outside of the traditional banking system, including its oversights, protections and regulations. While the term “shadow” may bring to mind purely predacious and exploitative behavior, credit intermediation is actually only a very small part of total shadow banking activity. While this can and

Figure 1: Growth of Total Global Shadow Banking Total Global Shadow Banking (US$ Trillions)

Shadow banking is a huge and growing phenomenon. It grew more than 50 percent from 2011–16.


$50 $40 $30







$20 $10 0







Data source: Financial Security Board









Nonbank Proportion of Total Credit (%)

Figure 2: Nonbank Proportion of Total Global Credit 40 39 38 37 36 35

2007 2008


2010 2011




2015 2016

Data source: Financial Security Board

Figure 3: Growth of Global Credit Assets: Banks vs. Nonbanks

Indexed Growth of OFI Total Credit Assets (%)

180 170 160 150 140 130 120 110 100 90 80






Nonbank Credit Asset Growth (Indexed)





Bank Credit Asset Growth (Indexed)

Data source: Financial Security Board Base year: 2007

“Nonbank” credit intermediaries play an important role supporting economic growth, but have grown rapidly to supply 40 percent of global credit. 26


does apply to personal unsecured lending, such as what I described from my experience walking into a shadow bank, experts appear to agree that nonbank financing can be a good thing. As an alternative to traditional financing from a bank, it may support economic growth, and corporations and households alike may view and use it as a diversifying source of credit supply. Indeed, nonbanks now supply around 40 percent of total global credit (Figure 2). The credit intermediaries in this portion of the shadow-banking ecosystem may come as a surprise. They are not storefronts in strip malls, but rather they are insurance companies, pension funds, and “other financial intermediaries” or OFIs (e.g., asset managers, broker/dealers, hedge funds). Their credit intermediation has skyrocketed since the global financial crisis, too (Figure 3). While a colossal market in size and growth rate, when considering the systemic risks posed by shadow banking, nonbank credit intermediation is not the focus. To use a simple example, if every customer for whom Sears has financed an appliance, or for whom Ford has financed an automobile, were to default on their loans to Sears and Ford, it would definitely be a shock to those financing companies. However, it would unlikely be a shock to the global financial system. But there’s a much larger shadow cast in the industry. 2. Off-balance-sheet financing, which banks extend to unconsolidated subsidiaries.

The second shadow banking activity, offbalance sheet financing that banks extend to unconsolidated subsidiaries, is another story altogether. Regulations following the financial crisis imposed a number of lending constraints on deposit-taking banks. The “deposit-taking” piece is important, as deposit-taking banks benefit from deposit insurance, such as from the Federal Deposit Insurance Corp. (FDIC) in the United States.

There is a harrowing risk of shadow banking. Lines of credit only show up on the balance sheet as they are drawn. The balance sheet might show $1 or $1 billion at any given time, but the total exposure is never known unless something goes very wrong. In the context of deposit insurance, part of the flagship regulations passed after the global financial crisis sought to solve what is referred to as the “moral hazard problem.” Simply defined, the moral hazard problem is an increased appetite for risk when the cost of assuming that risk is borne by someone else. Recent estimates reflect that the five largest deposit-taking banks in the U.S. hold over 40 percent of total U.S. bank deposits. In addition to their deposit-taking business, these institutions have other large, global businesses as well (e.g., asset management units or investment banks), whose activities and capital are not insured by an organization like the FDIC. The moral hazard problem manifests itself when these institutions take risks they would not otherwise take because a large part of their business — the deposit-taking portion — is insured.

MEASURING RISK IN THE DARK As it turns out, a combination of regulatory constraints and accounting rules still allows deposit-taking banks to extend unknown amounts of credit, in the form of secondary lines of credit, to unconsolidated subsidiaries like “special purpose vehicles” (SPVs) and “structured investment vehicles” (SIVs), which do not show up on the banks’ balance sheets. Several of the OFIs described in the nonbank credit intermediary section serve as the primary source of capital for these unconsolidated subsidiaries. Now, let us suppose that these SPVs and SIVs buy potentially insolvent assets — say, subprime mortgages. Should an event occur that causes the OFIs to withdraw their capital from the SIVs and SPVs, the entity would draw on its line of credit from the deposit-taking bank. Therein lies the harrowing risk of this aspect of shadow banking. These lines of credit only show up on the

balance sheet as they are drawn. The balance sheet might show $1 or $1 billion at any given time, but the total exposure is never known unless something goes very wrong. To illustrate the systemic risk, suppose that “systematically important financial institutions” — commonly shorthanded as “too big to fail” — have similar off-balance sheet subsidiaries capitalized by similar OFIs, and they engage in similar activities such as investing in subprime mortgages. Then a shock of some kind occurs to cause the OFIs to pull their capital from the subsidiaries, causing the lines of credit to be drawn, creating vulnerabilities in the balance sheets of the banks, requiring FDIC insurance to make deposits whole. If this occurs in a wave, the FDIC will not be able to make all deposit-taking parts of all bank balance sheets whole, causing a domino effect with unknown consequences. It is not to say all banks partake in activity like the example above. In fact, there is no way to know. The example merely illustrates that this phenomenon contributes an unknown amount of systemic risk into the global financial system. We do know banks are providing capital to risky unconsolidated subsidiaries. While private equity firms have typically provided the equity for nonbank subprime lenders, it appears, alarmingly, that traditional banks capitalize these nonbanks, as well. Lendmark has raised debt financing from Wall Street banks. Wells Fargo, Citigroup, Barclays and Deutsche Bank partnered to lend Exeter Finance $1.4 billion. Bank of America lent loanDepot $250 million. This capital was flowing to subprime lenders while the banks were shuttering their internal subprime lending units. For example, while Wells Fargo closed its subprime lending unit in 2010, it had over $80 billion in loans outstanding to nonbanks by the end of 2017. More broadly, by 2016, loans to nonbanks was the fourth-largest category of commercial bank lending overall. Part of the challenge of determining

what systemic risk shadow banking contributes to the global financial system is that stress tests exist to study and test the effect of a shock on banks, but no such tests or models appear to exist to evaluate off-balance sheet secondary lines of credit to unconsolidated subsidiaries. Perhaps this should serve as an alarm to regulators and organizations such as the Financial Accounting Standards Board.

Richard A. Mayo Center for Asset Management Director Aaron Fernstrom (GEMBA ’15) explored the rapidly growing — and essentially unregulated — shadow banking market.



The Price of Pettiness: How Online Payments Can Sink Your Reputation Over Pennies BY CAROLINE NEWMAN

Picture this. You go out to dinner with two friends, and one friend picks up the tab of $75.36. You thank your friend and — this being the 21st century — whip out your phone, tap your Venmo online app and pay him $25.12 — the exact amount owed. Your dining companion also takes out her phone and pays $25, rounding down just slightly. It’s just 12 cents. No big deal, right? Not exactly, according to a new study from Darden Professor Tami Kim. In a series of seven experiments including both American and European respondents, Kim and fellow researchers Ting Zhang and Michael Norton found that paying friends in exact amounts makes people dislike the payer and perceive them as petty. In the scenario above, for example, your friend is more likely to like and appreciate your dining companion who paid $25, even though she paid less than you. The findings made a huge splash in the news media this summer after Kim and Norton co-authored a column in The Wall Street 28


Journal summarizing the strange and sometimes counterintuitive social consequences of modern online payments. After The Journal published the column in June, numerous media outlets picked up the story, including CNN, USA Today and Time. It seemed Kim and her co-authors had tapped into a social phenomenon that the millions of Venmo and other online payment users had sensed, but for which there had not yet been any definitive findings. Various payment scenarios play out at millions of different restaurant tables every night of the week, and millions of people are falling into the trap of being perceived as petty. Because apps like Venmo or PayPal make it so easy, people are paying exact amounts far more often than they would have counted out pennies and dimes back in previous generations when friends generally settled dinner and bar bills by cash. In her study, which is set to publish in the Journal of Experimental Psychology, Kim found that about 52 percent of respondents used precise amounts in recent transactions with

friends, with little idea that it might impact their friendships. “These platforms make it very convenient to transfer the exact amount owed and to keep the balance sheet at exactly zero among friends,” she said. “We found that could have unintended consequences because they make the relationships feel transactional in nature.” In addition to studying transactions among friends, the researchers studied how precision with time or money could impact dating relationships. For example, in one study, they asked individuals in committed relationships a series of questions about how they and their partner split expenses. They found that participants were significantly less happy with their relationship when they perceived their partner as being too petty or precise with money. The same held true for partners who carefully tracked time — for example, telling their partner they were 17 minutes late, or carefully keeping track of whose turn it is to take out the trash. “Those who reported that their partner was really precise in splitting resources were more likely to report feeling less committed and less likely to believe the relationship would last,” Kim said. “Generally, they liked their partner less.” The researchers also looked at less committed relationships, presenting participants with fictional online dating profiles showing how potential dates

responded to different scenarios. In one scenario, some potential dates said they had to help a friend move houses for one hour and 56 minutes on Saturday; others said they could help for two hours; others two hours and four minutes. Once again, those who rounded to two hours prevailed — survey participants perceived them as more likeable and were more willing to date them. In fact, researchers only found one factor that could save someone from unsuspecting pettiness: their friends’ perceptions of their intentions. In one scenario, participants were told that their friend could choose between $10, $13.50 and $15 gift cards to a café. In this case, someone who chose the $13.50 was less likely to be perceived as petty because it was a pre-programmed choice instead of their exact intention. “Perception of the giver’s intention is key,” Kim said. “If you told someone you could only stay 20 minutes and they immediately set a timer, the behavior would still feel petty even though 20 is a rounded number.” In general, she said, the study shows that leaving some ambiguity and room for error in transactions among friends or partners will likely strengthen those relationships. “It signals that you are not treating the person like a bank teller, but like a friend,” she said. “You expect the relationship to last and to be more communal instead of transactional.”

A History of Online Payments

Digital payments were expected to surpass $3 trillion globally in 2018, with mobile payments surging to nearly $1 trillion as smartphones continue to spread across the world. The huge market is reshaping commerce, banking and even social norms. So how did we get here less than 20 years since cash was still the undisputed king of payments around the world? 1994 — Pizza Hut accepts the first ever order for a physical good over the internet (a large pepperoni, mushroom and extra cheese pizza) via its PizzaNet digital ordering hub. 1998 — Confinity is founded, later merging with Elon Musk’s in 2000, to form PayPal. 2002 — PayPal is acquired by eBay for $1.5 billion and emerges as the dominant force in online payments. Musk uses proceeds from the sale to later launch Tesla, and eBay spins off PayPal into a standalone company in 2015. 2007 — Apple’s iPhone and the Android smartphone operating system are released. 2008 — Bitcoin is invented. 2009 — Startups Venmo and Square are founded. Venmo is acquired by payments leader PayPal in 2013 while Square becomes publicly traded in 2015. 2011 — Google releases Google Wallet. 2014–15 — Several corporate giants jump into the quickly growing mobile payments space with the launch of Apple Pay, Android Pay and Samsung Pay. 2016 — By 2016, the growing market for online payments combined with advances in technology lead to a proliferation of payments services — from bootstrapped startups to subsidiaries of corporate giants. Entrepreneur magazine in 2016 names 15 top competitors to PayPal’s dominance, including Due, Stripe, Dwolla, Apple Pay, Amazon Payments, Square, Venmo, Google Wallet and Intuit GoPayment. Source: Statista

In addition to research on social pettiness, Professor Tami Kim’s paper “I Know Why You Voted for Trump: Using Attribute Information to Infer Motives for Choice” was a finalist for the best individual paper award from the Society for Consumer Psychology last year. WINTER 2019





n an era in which technologydriven disruption has upended business models and yesterday’s car company is today’s “transportation solutions” provider, Darden School Operations area Professor Doug Thomas says the operations field is richer, more dynamic and arguably more critical to venture success than ever before. Thomas came to Darden ahead of the 2017–18 academic year after stints at INSEAD, the Cornell SC Johnson College of Business and, most recently, Penn State’s Smeal College of Business. He has built his academic and professional career around the global supply chain — the steps and processes involved in producing and distributing a product. “I build mathematical models for managing production and distribution and optimizing inventory and production,” said Thomas, an engineer by training initially drawn to the field by what he described as a lifelong interest in puzzles. He also entered something of the family business, as Thomas’ father is a renowned operations management professor and current dean of the Johnson College of Business.

Ops in the Age of ConsumerDemanded Transparency If the draw to operations was initially how disparate global pieces might all fit together, the age of consumerdemanded transparency has added new layers to the work. 30


People care about the environmental integrity of what happened to get a product to them, and they care about the social impact of the workers involved.” “We are continuing to care a lot more about where the products we have come from — the provenance or the product integrity of the thing I might be putting in my body or wearing,” Thomas said. “People care about the environmental integrity of what happened to get it to them, and they care about the social impact of the workers involved.” Concurrent with consumer demands, new technologies like blockchain are providing even more information about the components and subcomponents that go into products, opening up still more avenues of study in the field. “If we start having all the visibility in all of the data throughout the chain, we can apply new analytics for approaches in efficiency.” Thomas said. “So my heart starts out with my history of wanting all of the information about all of the stuff flowing around, and I want to figure out neat ways to optimize that. I still love that stuff, but I drift into the questions that are important to humanity. With all the global sourcing, are we doing the right thing in markets of labor, or where we are extracting rare earth minerals?”

One Foot in Business Practice Thomas is versed in the practical world as well as the academic because he keeps one foot in each. The chief scientist of the supply chain analytics and software provider Plan2Execute, Thomas said his work with the company informs his research and teaching at Darden, and vice-versa. “The encouragement of engaging with the practicing manager at Darden makes this an ideal fit for me,” Thomas said. “I’ve started to partner with some of our corporate partners here to do some field-based cases, and I still do active research projects with companies, so that engagement all fits together for me in terms of teaching and research and working on commercial software.” Or, as Darden Professor Elliott Weiss put it: “Doug is a great addition to Darden because his audience is not academia or practice. His audience is academia and practice.” At Darden, Thomas has been working with Weiss to update the First Year core “Operations Management” course, bringing in new cases and business models to reflect the changing landscape. “As with any First Year course, there is foundational material, and we’re going to teach lean and inventory management and process analysis. Darden has done that

well for a long time,” Thomas said. “I like to connect how the principles and the foundation and the things that we teach affect the business model.”

New Thought Leadership for the New Age Thomas, who will also lead Darden Executive Education’s The Executive Program this summer, said he is particularly intrigued by the new business models appearing at the intersection of operations, marketing and the customer experience. How does a clothing subscription service like Stitch Fix or Amazon Prime Wardrobe that sends clothes to a consumer and expects a significant portion of them to be returned upend traditional demand models, for instance? “The classical operations guy in me says I forecast demand, then I figure out the tradeoff between too much and too little inventory,” Thomas said. “Stylists making recommendations to customers that they may or may not return — that sort of flips this model. There are still inventory management issues, but they are twisted around.” Similar disruptions can be seen in transportation, retail and food delivery, among other fields. “When I first started out doing this, an entrepreneur would look to solve some inefficiency in the current business model,” Thomas said. “Now it’s, ‘I think I can meet this need totally differently.’” As business models converge and dissolve, Thomas lauded the opportunities afforded within the Darden faculty, where he said the interaction and cross-culture engagement is explicitly encouraged. “It’s easy to say the business world is interdisciplinary because, of course, it is, but it’s hard to execute interdisciplinary teaching or curriculum development,” Thomas said. “I’ve had far more interactions just in the one year I’ve been here across disciplines in the School than I ever did before.” And while he’s taught in various MBA and Executive Education formats across the globe, the faculty-student interaction within the Darden classroom also required an adjustment in approach. “I received good advice from Elliott and others, which boiled down to: trust the students,” said Thomas. “You just put faith in them to be prepared and to be ready to carry the conversation. It’s just a great environment to teach in.” WINTER 2019



Around the World With the Darden Network Darden’s 16,000-plus alumni can be found at the forefront of top companies and industries across the globe. They can also be found starting new businesses in Charlottesville or even riding a motorcycle on a solo journey across seven continents. Here’s a look at several alumni recently spotlighted on The Darden Report website.


Life Lessons on a 7-Continent Motorcycle Journey In July, Eric Bernath (MBA ’08) crossed what was to be his final border of a 100,000-mile trip around the world, riding his motorcycle into his home state of Michigan after an epic 65-country, 50-state road trip conducted on his Suzuki V-Strom 650 motorcycle. It’s a journey — conducted solo with little more than clothes, camping equipment and a camera, and exhaustively documented on Instagram (@ twowheelsonejourney) — that took Bernath from a May 2016 start in California across seven continents — yes, he made it to Antarctica — and from Argentina to Zambia. “I went through Iran, Colombia and El Salvador, and I met some of the most genuine, honest and welcoming people in those places that you can imagine,” Bernath said. “People who surprised you by offering as much as they can give, regardless of how little they have.”



Relish the Opportunity to Grow the Charlottesville Entrepreneurial Ecosystem Many alumni retire to the Charlottesville area. Others return and start successful ventures. Some graduate and never leave, deeming the area an ideal fit for their professional and personal goals. That was the case for Sarah Rumbaugh (MBA ’15), whose MBA career site Relish has continued to grow from its roots as an i.Lab Incubator venture. “I could move anywhere in the country and run the business from there, but I truly believe Charlottesville is one of the best places to live,” Rumbaugh said. “What I do contributes to the entrepreneurial community and the Darden community.”

PayPal, Etsy Execs at the Forefront of India’s Booming Tech Industry Himanshu Wardhan (MBA ’11), right, and Gunjan Shukla (MBA ’09), left, have had remarkably similar career trajectories, with formative years in Silicon Valley before returning to India to take leadership positions in highgrowth internet companies. Wardhan, managing director of Etsy in India, and Shukla, CFO of PayPal India, say tech companies in India are growing by leaps and bounds, assisted by government policies and the stunning growth of smart phones. “As the opportunity in India is increasing, we are seeing more and more people coming back from the U.S. or other places and either starting their own business or helping other people grow and scale,” Shukla said.



Call for Abbott Award Nominations The Charles C. Abbott Award is named in honor of the first dean of the University of Virginia Darden School of Business. The award is presented annually to a graduate of the Darden School or The Executive Program whose contributions of time, energy and talent are outstanding. The Alumni Association recognizes the recipient as an individual who:


• Demonstrates a strong level of interest in and concern for Darden’s mission • Commits a generous amount of time, energy and funds to Darden • Brings initiative and persistence to projects and responsibilities • Is regarded by other stakeholders as an outstanding contributor Please nominate a fellow alumna or alumnus at alumni. You will be asked to provide the nominee’s name and an explanation of why you identify this person as a strong candidate for the award.

The Abbott Award will be presented to the recipient during Darden Reunion Weekend on 27 April 2019. Please direct questions to the Office of Engagement at +1-434-243-8977 or

Ed Dinwiddie (MBA ’58), bottom center, is the 2018 recipient of the Harry N. Lewis Distinguished Service Award, bestowed to an alumni volunteer who has dedicated exceptional service to Darden, demonstrated passionate and creative commitment to engaging fellow alumni, and provided loyal financial support. Pictured are, left, C. Ray Smith (MBA ’58) and Phyllis Smith; center, Ed Dinwiddie (MBA ’58) and Betty Dinwiddie; and, right, Harry Lewis (MBA ’57) and Dearing Johns.

F I N D Y O U R P U R P O S E . R E F I N E Y O U R W H Y. Personalized, complimentary career coaching from Alumni Career Services · Job search · Encore career · Career management · And more

Every career stage. Every career issue. Free of charge. Forever.

The Armstrong Center for Alumni Career Services


THE DARDEN REPORT +1-434-924-4876

401 Park Street Charlottesville, VA 22902



3396 FOX MOUNTAIN ROAD $2,195,000 In the heart of Free Union horse country with strong views, this lovely Georgian was reconstructed on the current, stunning home site in 1991 of reclaimed, c. 1800 materials: high ceilings, wide plank pine floors, antique mantels and stunning wainscoting abound. The core structure has only been enhanced with the addition of guest suites, modern systems. Remarkable barn with conditioned space and log guest cabin. Absolute privacy with sweeping mountain views. MLS# 581764


3520 ROCKS MILL LANE • $1,750,000 Tucked away in Ivy & 10 mins from Downtown, this classic 5-6 bedroom will astound. Comprehensive renovation & add’l 1,800 sqft by Shelter & Associates. 4+ acres provides privacy, strong views, expansive lawns & meandering creek. 1st floor master, spaesque master bath, wine cellar & screening room. MLS# 581342




WINDIE KNOWE, C. 1732 • $2,650,000 One of the oldest historic properties in Albemarle Co. Colonial farmhouse exquisitely restored to facilitate modern convenience. Enjoy country living on 23 acres with rolling tree-shaded lawns & fenced pastures for horses. Terrace, pool area & outdoor dining pavilion. Hunter Palmer (434) 981-0533. MLS# 580306

2437 CHAPEL SPRING LANE • $1,695,000 Set in absolute tranquility and privacy yet with panoramic Blue Ridge views, this dramatic Georgian has been updated and expanded brilliantly. Russell Skinner designed the stunning great room addition & Charles Stick, the arresting landscape design. 2 large covered porches. Formal gardens, tennis court. MLS# 567008

2430 RIVER RIDGE ROAD • $1,695,000 Light-filled custom home on 14 private acres provides 6,200 sq ft. Updates include great room with 12 ft ceilings, gourmet kitchen with top-of-the-line appliances, 2 master suites, finished basement with full bath, sauna and screened porch, 3-car garage. Liz Raney (434) 242-3889. MLS# 581059




1582 KENDRA STREET • $975,000 Set on spectacular 1 acre elevated lot with mountain and city light views, this home offers an open floor plan, first floor master suite, gourmet kitchen, multi-level outdoor living, home office, home gym and 3-car garage. Close to UVA and Downtown. Shannon Thomas (434) 882-1761. MLS# 580963

2015 SPOTTSWOOD ROAD • $1,285,000 In the city’s most desirable Rugby neighborhood & situated on .72 landscaped private acres, this 1-story renovated home offers open, light-filled, formal & casual spaces. Foyer with soapstone floors leads to living room w/ wood burning fireplace. Walk out terrace level suite. Lindsay Milby (434) 962-9148. MLS# 581572

105 FINDERS WAY • $1,095,000 1st Floor master. Bright kitchen / great room & screened porch. Living, dining & sun rooms open to 12 x 75 deck. 2nd floor Jack & Jill bedrooms & bath. Terrace kitchen, bath, bedroom, & family room. 2-car garage, 3 fireplaces. Punkie Feil (434) 9625222 or Elizabeth Feil Matthews (434) 284-2105. MLS# 581627


ROUND HILL FARM • $5,900,000 Stately, c. 1940 brick residence shaded by massive hardwoods and sited magnificently to enjoy panoramic Blue Ridge views. A manicured country property with extensive frontage on the Rivanna Reservoir under 10 minutes to UVA and Downtown. Pool overlooking the views and gardens. MLS# 572196

5214 PONT ROUGE FARM $2,995,000


Pont Rouge offers an absolutely pristine 5 bed, 5.5 bath residence constructed by Shelter & Associates that overlooks the immaculate farm & staggering mountain views beyond. Charming, log guest cottage adjacent to the main house. 386 tranquil, protected and private acres include groomed, rolling, fenced & crossed fenced fields & a large, deep pond. Wonderful horse barn and board & batten equipment barn. The only covered bridge in Albemarle Co. welcomes visitors at the entrance. MLS# 558099



401 Park Street Charlottesville, VA 22902



1 NW WESLEY CHAPEL ROAD $1,845,000 These open, gently rolling fields are embraced by staggering Blue Ridge views, bordered by privacyenhancing woodlands & traversed by a year-round stream. Access via a driveway over lovely 3 acre pond where mountain vistas are backdrop to water views. This offering seems art directed by Mother Nature to insure all are awestruck by its beauty. Adjacent properties under conservation easement thus this setting won’t change. Under conservation easement w/ no further divisions. 15 mins to town. MLS# 582710


2210 CAMARGO DRIVE • $1,250,000 With exceptional curb appeal in the Meriwether Lewis district, this stone & hardiplank residence built in 2007 by Jacques Homes offers 1st floor master, open casual living spaces, covered porch, roughed-in kitchen, screening & wine tasting rooms on the lower level, 2 bluestone patios. MLS# 580821




11 EDNAM VILLAGE STREET • $850,000 Gracious 1-level living offering magnificent Birdwood Golf Course & mountain views. Walk to Boar’s Head, or take a short drive to UVA, Downtown, Ivy & all area amenities. Perfect floor plan with spacious rooms including light-filled sunroom with views. Lindsay Milby (434) 962-9148. MLS# 576330

265 CAMPBELL ROAD • $1,245,000 Gorgeous 4,800 sq ft farmhouse offers stunning kitchen with quartz counters & top-of-the-line stainless appliances. Open concept 1st floor with soaring ceilings, light-filled rooms & hardwood floors. Only 20 mins to town! Harmony Thurston (434) 996-0006 or Erin Garcia (434) 981-7245. MLS# 581016

1864 WAYSIDE PLACE • $969,000 Every inch of this charming 1-level home was updated using only the finest materials. Features include gorgeous chef ’s kitchen, luxurious baths, refinished hardwood and finished, walk-out lower level. Private setting with mature landscaping. Sally Neill (434) 531-9941. MLS# 579039




1255 INGLECRESS DRIVE • $1,279,000 Tucked off a quiet cul de sac, this stone & stucco home offers plenty of level lawn & privacy. Light-drenched, eat-in kitchen opens to large deck. Terrace level includes private office w/ maple built-ins, guest suite, theater room, wine cellar /tasting room & amazing bar. 1st floor master. Ivy Creek traverses the back of the 3 acres. MLS# 582614

5289 FREE UNION ROAD • $1,100,000 Elim Farm is 65 acres nestled on a knoll overlooking expansive Blue Ridge Mountain vistas. Wrap-around front porch of this Cape Cod flaunts 360 views. 2 small ponds. Built in 2006 with materials from the area, including local pine floors. Erin Garcia (434) 981-7245. MLS# 568184

1113 MARION DRIVE • $699,000 1st floor living. Bright living, dining areas, open kitchen w/ fireplace. Master bedroom: dressing room & bath. 2nd bedroom, office area, laundry. Private patio. HOA: mowing & mulching, trash & snow removal. Mins to UVA, Farmington, Boars Head. Punkie Feil (434) 962-5222 or Elizabeth Matthews (434) 284-2105. MLS# 581569


707 NORTHWOOD AVENUE • $1,150,000 Meticulously renovated home just a short stroll to Downtown. Updated kitchen includes marble island, local soapstone counters, high-end appliances and custom cabinets. New master bath with marble top double vanity and tile / glass walk-in shower. Finished basement. Lisa Lyons (434) 987-1767. MLS# 580896


5789 FREE UNION ROAD $1,275,000


Ideal contemporary on 17.6 acres in the heart of Free Union & Farmington Hunt Country. Nestled at the base of Buck Mountain, this small farm comes w/ spectacular vineyard & mountain views. Fabulous 1-level living w/ 2011 addition by Greer & Associates. High ceilings, hardwood floors & large stone fireplace in living room. 5-6 Paddocks, updated 8-stall barn w/ climate controlled tack room, feed room & indoor bay. 2 shared ponds. Walking & riding trails. Liz Raney (434) 242-3889. MLS# 575964



To update your contact information, call +1-434-243-8977 or email

LIVE STYLE T he l o c a t i on , t h e s t y l e , t h e f e e l i n g y o u g e t w h e n y o u w a l k t h r o u g h t h e do o r – e v e r y a s p e c t o f y o u r h o m e s h o u l d be a r e fl e c t i o n o f w h o y o u a r e , w he r e yo u ' v e b e e n , a n d t h e l i f e y o u a s pi r e t o l i v e . Y o u r b e s t li f e b e g i n s w i t h a h o me t h a t i n s pi r e s y o u .

f ra nk hard y.c om M o rl a nd | S o ld

Š MMXVII Sotheby's International Realty Affiliates LLC. All Rights Reserved. Sotheby's International Realty Affiliates LLC fully supports the principles of the Fair Housing Act and the Equal Opportunity Act. Each Office is Independently Owned and Operated. Sotheby's International Realty and the Sotheby's International Realty logo are registered (or unregistered) service marks licensed to Sotheby's International Realty Affiliates LLC.





PAUL HAMAGUCHI (MBA ’70) Darden’s First Japanese Grad Drives 400-YearOld Soy Sauce Business Paul Hamaguchi’s (MBA ’70) family has been in the soy sauce business since 1616. That’s more than 400 years — roughly double the age of the University of Virginia, which just turned 200. It’s far older than the United States, too. It’s even older than Isaac Newton’s discovery of gravity. Higeta Shoyu Co. Ltd. has stood the test of time. Today, led by Hamaguchi — who in 1970 was the first Japanese student to graduate from Darden — the company sells more than 14 million gallons of soy sauce. The Higeta brand soy sauce continues to be the official soy sauce provider of the Japanese imperial family, a distinction first awarded by imperial warrant in 1900. And, most importantly for Hamaguchi, who has worked for the family business since 1979 and now serves as president and CEO, the company itself continues to adapt. Among several initiatives, Hamaguchi has partnered with another well-known soy sauce provider Kikkoman to distribute Higeta products not only in Japan, but also in the U.S., Europe and other Asian countries. The two soy sauce businesses have a longstanding, friendly relationship. Hamaguchi worked at Kikkoman briefly after graduating from Darden and helped establish the first Kikkoman Foods plant in Wisconsin. He started looking at Darden at the urging of Yuzaburo Mogi, now honorary chairman of the Kikkoman Corporation. Hamaguchi, then a young graduate of Sophia University in Tokyo, was looking for a small, high-quality business school to fully immerse



himself in American business and culture. He was particularly intrigued by the case method. “I learned a lot from the School by the case study method,” Hamaguchi said. “They, of course, taught basic knowledge about business, but the main purpose was to teach how to think and to define problems you were facing and how to solve them. This method of teaching helped me throughout my life.” In addition, Darden’s ongoing commitment to business ethics — particularly the work of renowned ethics Professor Ed Freeman — has continued to shape Hamaguchi’s business philosophy and commitment to Choshi, the coastal city where his ancestors founded Higeta. “No matter what happens, for instance with respect to demographic changes, we want to be a deeply rooted local company devoted to the local society and market all over Japan,” Hamaguchi said. “Our main purpose of doing business should be to pursue the happiness of employees, the communities we belong to, our business partners and lastly shareholders.” Even 40-plus years into his career, Hamaguchi remains devoted to advancing that mission. He has no intention of retiring soon; in fact, he is already looking forward to the next challenge. New technology and emerging markets will form the latest in a 400-year string of challenges for his family business, a span including the Industrial Revolution, multiple world wars, large-scale demographic change and the dawn of artificial intelligence. “To go with this trend, we must continually innovate ourselves as our ancestors have done for over 400 years.”

To update your contact information, call +1-434-243-8977 or email


LONGWOOD - c.1765. Mountain views, lake, guest house. 186 acres. Barn and manager's house. Main house has 3 beds, 2 baths. Sunroom, stone floors and den with fireplace. 15 min. to town. MLS 583018. $1,950,000. Frank Hardy 434.981.0798 and Murdoch Matheson 434.981.7438

1515 BROOK HILL LN - Stunning English Tudor on a 2 acre lot. Features include grand beams, steeply pitched gable roofs, masonry, and brickwork. One level living floor plan. Located in Farmington, close to UVA. MLS 578460. $1,795,000. Ann Hay Hardy 202.297.0228.

ANNANDALE - Built in 1804, on 63 acres.Federal manor overlooking a 4 acre lake. 12 ft ceilings, 4 fireplaces. Pool. 2 guest houses. Stables. The property has been fenced for horses and only is 25 minutes to Charlottesville. MLS 574545. $2,150,000. Frank Hardy 434.981.0798.

GREENFIELDS - 763-acre equestrian estate. 1904 Classical Revival. 3 dependencies. Formal dining room and living room. Equestrian facilities with indoor arena, paddocks and riding ring. Large cattle and crop enterprise. MLS 578924. $6,295,000. Frank Hardy 434.981.0798.

LIZBETH is a spectacular, 76 acre estate west of Charlottesville. The slate-roofed house features 5 bedrooms and 5 half baths on 3 levels of living. Heated flooring, a gourmet kitchen featuring Wolf and Sub-Zero appliances, and a state of the art, temperature-controlled wine room. Outside, a bluestone patio, luxurious pool, and breathtaking mountain views await, along with a private lake and access to the Moorman’s River. MLS 582196. $4,750,000. Frank Hardy 434.981.0798

HIGHLAND ORCHARD - Nearly 1,000-acres in Albemarle. 20 min from Charlottesville and UVA. Situated among the headwaters of the Hardware River, rolling pasture and woodland, with a stylish contemporary residence. The Main residence, guest house, farm managers cottage, formal greens pool and host of complimentary farm buildings make this one of the most extraordinary farm offering in Virginia. MLS 580935. $9,500,000. Murdoch Matheson 434.981.7439.

Charlottesville Brokerage 417 Park Street Charlottesville, VA 22902 Tel: 434.296.0134

Piedmont Brokerage 151 West Main Street Orange, VA 22960 Tel: 540.672.1100



© MMXVIII Sotheby’s International Realty Affiliates LLC. All Rights Reserved. Countryside used with permission. Sotheby’s International Realty® is a licensed trademark to Sotheby’s International Realty Affiliates LLC. An Equal Opportunity Company. Equal Housing Opportunity . Each Office Is Independently Owned And Operated.



McWane Inc. President and CEO Ruffner Page (MBA ’86) visited UVA recently and found a fire hydrant made by his company — one of the world’s largest makers of iron water infrastructure products.

Behind the Boom in Birmingham For some people, the community they live in is just the background to their lives. But Darden alumnus Ruffner Page (MBA ’86) is committed to giving back and making a difference in Birmingham, Alabama, the city he calls home. Originally from Memphis, Tennessee, Page has been a Birmingham resident for over 30 years. Page, the president and CEO of McWane Inc., has served on a variety of civic organizations including Leadership Birmingham, the Birmingham Education Foundation, the Birmingham Airport Authority, the Community Foundation of Greater Birmingham, the Alabama Symphony Orchestra and the Birmingham Museum of Art. “In most towns there are a hundred things you could get involved in, but you can’t be involved in everything. So, I’ve tried to get involved in representative aspects of the community that help the quality of life,” Page said. The commitment to civic responsibility that Page and Phillip McWane, chairman of McWane Inc., share extends to their commitment to corporate responsibility. Under Page’s and McWane’s leadership, the company has become an industry leader in environmental and workplace safety. “It wasn’t easy,” Page said. “We were under intense scrutiny by government regulators. McWane Inc. went through a major culture change and reshaped the way it does



business, especially in its environmental, health and safety programs.” After leading the transformation, Page realized his experience was an intense learning opportunity. So, he came back to Darden to help teach a crisis management class and share with Darden students how to successfully emerge from difficult situations. “The first thing we conveyed to the class was that if you do the right thing, over time, it will pay off,” Page said. Page also regularly returns to Darden through his involvement with the Peter J. Neihaus Scholarship created by the Darden Class of 1986; the Dr. Gene R. Page and David H. White, Ph.D. Scholarship he and his wife, Penny, created; and events such as a UVA World Water Events panel organized by Professor Peter Debaere. When he has the chance to speak with Darden students, one of the things Page tries to emphasize about leadership is that understanding various perspectives is crucial for operating a business successfully and ethically. “The multidisciplinary methodology of the case study at Darden requires you to process all the different considerations that you need to think about when you’re running a business,” Page said. “That type of balancing act isn’t easy, and rarely simple, but it’s a requirement and something that Darden’s methodology allows you to practice.”



To update your contact information, call +1-434-243-8977 or email

The River

625 acres on the Rapidan River between Orange and Fredericksburg. $2,991,000

Quarles Road

Timberpeg home on 33 acres along the Rivanna river mins from Charlottesville. $1,150,000


762 acre farm along the Rapidan River near Somerset in Madison County. $4,495,000

The Meeting Place

12,000 + s.f. for B&B or resort with 16 + acres along the Brew Ridge trail near Wintergreen. $1,975,000

Jos. T.

Old Manse

Mid 19th century manor on the Nat’l Register with 46 acres in Orange. $595,000


Late 19th century Italianate on the Nat’l Register with 28 + acres in Orange. $875,000

Overlook Farm

Mid-century modern on 56 beautiful acres in Somerset near Montpelier. REDUCED: $795,000


Mid 19th century manor on 6 + acres now a B&B but suiltable for a country manor. REDUCED: $785,000

SAMUELS Over 100 Years Of Virginia Real Estate Service

Charlottesville, VA u u (434) 295-8540


Extraordinary, circa 1776, 1,466-acre Virginia estate featuring an impressive Georgian-style manor house, a two-story Georgian Revivalstyle stone carriage house, farm & equestrian improvements, a guesthouse, additional residences and a shooting preserve. On National and Virginia Historic Registers, under a preservation easement, and is a rare offering of a national treasure. MLS# 558296

LA FOURCHE ◆ $2,475,000

In the heart of Keswick with a lovingly restored & updated circa 1788 main house with attached tavern, two dependencies & party barn on four acres. Gracious living inside & out. Views of the historic Southwest Mountains and only minutes to Charlottesville & University of Virginia. MLS#577241

HESSIAN ROAD ◆ $2,595,000

Built by renowned architect Milton Grigg as his personal residence, owner has recently completed a stunning state of the art restoration and enlargement. Original architectural details were preserved and replicated in the new spaces. Sited on almost an acre, the gardens and patios create a private oasis in a coveted City neighborhood. MLS#577617


Circa 1900 National Historic Register, home is situated on the most visible and spectacular knoll in Central Virginia. With a 360 degree view overlooking the University of Virginia, City of Charlottesville and the Blue Ridge Mountains as far as the eye can see. The stone manor is a stone’s throw from the Rotunda at the University and is surrounded by dry laid stone retaining walls on its 42+ acre site.


Complete privacy and tranquility yet only 10 minutes from town and UVA. Over 15 acres showcasing a solid-brick Tommy Craven designed home with walnut study, kitchen with soapstone counters and custom cabinetry, high ceilings, hardwood floors, 3 fireplaces, soaring ceilings, and finished terrace level. MLS#576455

BRIGHT RIVER ◆ $645,000

Unique, log and frame residence—originally an early 19th century log home—has been enhanced and renovated yet maintains its original charm. 4-bedrooms with beautiful stone and woodwork, pine and slate floors, and large porches. Beautifully situated on 10+ acres with caretaker’s cottage and 2-car garage with spacious loft area. MLS#562561


GLENDOWER ◆ $3,250,000

c. 1808 manor home built on a lovely knoll surrounded by stately mature trees and 423+ acres of rolling Virginia countryside. The 8,500± sf brick main residence with a detailed LR with FP, DR with FP, expansive country kitchen 5 BR, 5 full BA and 2 half BA. The property also contains a c. 1776 cottage, schoolhouse and barn. MLS#582621

LAFAYETTE ◆ $2,395,000

Tucked in a quiet and peaceful setting down a delightfully tree-lined lane is this attractive, three story clapboard house. First floor master suite, five additional bedrooms, house, built in 2000, can easily handle large gatherings or simply a few by one of six fireplaces. All on 91 gently rolling acres, great views and stream. MLS#574119

503 Faulconer Drive Charlottesville, VA 22903 434.295.1131

MCLEAN FAULCONER INC. Farm, Estate and Residential Brokers BRAMBLEWOOD

TOTIER HILLS FARM ◆ $2,975,000

Exquisite brick mansion, superb quality construction and features in over 9,000 finished square feet, on 98 gently rolling acres with total privacy, a stream and pond. Only 5 minutes to shops, 15 miles to UVA. MLS#571634 For full details, please go to:

FARMINGTON ◆ $1,550,000

Classic brick residence with grand facade and breathtaking views in a most serene & private setting, 2.3 acres within grounds of Farmington Country Club. Large formal rooms and customdesigned kitchen are well suited for entertaining. 2-car garage, full walk-out basement & whole house generator.

Stunning, 522-acre private sanctuary in the Southwest Mountains and heart of Keswick—a renowned estate area just east of Charlottesville. Property features: impressive grounds, farm and manor home, built circa 2008 with the highest quality craftsmanship and unique materials, with great attention paid to every detail. Over 14,000 finished square feet of elegant living space, with two other large homes and a barn. MLS#581157 For full details, please go to:

WILLIAM COX HOME ◆ $1,200,000

HISTORIC, circa 1770, new additions on 28 beautiful, mostly open acres, with great Blue Ridge Mt. views, and river frontage. Home has large public rooms, several covered porches, in-ground pool, guest cottage, and a complement of useful farm buildings and sheds. A magnificent tract of land and private setting. MLS#581306

AVENTADOR ◆ $2,950,000

Magnificent Georgian home with expert craftsmanship, fine details throughout, gracious style, and modern amenities. Over 10,000 finished sq. ft. including 6 BR, 6 full & 2 half baths, mainlevel master, and eat-in kitchen. Guest home, and 39 acres with panoramic pastoral and mountain views.


First time on market, magnificent brick Georgian residence, with copper roof, over 5,400 finished square feet, superb quality details throughout, expert craftsmanship offering gracious lifestyle on 21 acres in quiet pastoral setting, just 5 miles from town. Features include: 10 ft ceilings, heart pine and hardwood floors, custom cabinetry by Jaeger and Ernst, 5 large en suite bedrooms, main level master. Private setting, Blue Ridge Mountain view, salt water pool and lake, fabulous offering. MLS#574512

THE CHIMNEYS ◆ $3,495,000

Magnificent 273-acre estate at the base of the Blue Ridge Mountains offers spectacular views in all directions along with a completely renovated, 9,000 sq. ft. main residence, 2 guest homes, 2 barns, and 2 lakes. MLS#554020 For full details, please go to:




Leading Innovations at the Crossroads of Business and Government Deloitte Consulting recently appointed Nishita Henry (MBA ’03) as U.S. Consulting Chief Innovation Officer to guide its national innovation efforts. Henry, who joined Deloitte two years after graduating from Darden, describes her role as “an exciting, external-facing opportunity to work with cutting-edge technologies, engage the startup community and figure out how to incorporate next- generation technologies into practical solutions for our clients.” Henry came to Deloitte’s federal practice in 2005, which she describes “as a time of open-ended opportunity. There were only about 250 employees then,” she says. “Today, there are over 8,000, so there was a lot of potential to learn and grow.” She leveraged that potential to go on to lead the company’s Federal Technology & Architecture, Federal Innovation and, most recently, Federal Technology Practice, where she provided advisery and operations services to every U.S. Cabinet-level agency in government. “I chose to work with the public sector because I’m drawn to its singular mission,” Henry explains. “I truly believe people in government are there out of a sense of making a citizen impact. I like being part of serving a greater public good.”



Henry acknowledges the uniqueness of federal work. “When you’re at the crossroads of business and government, no one day or one experience is like the next. Washington is a city where the rhythms of government shift with each election cycle — administrations change, officials change and agency goals sometimes change. “But,” she adds, “change is an enabler.” Working in a male-dominated field, Henry has a keen interest in advocating for women and believes the effort starts by encouraging girls, like her own two daughters, toward science, technology engineering and math (STEM) fields. “Once women enter the workplace,” she says, “the challenge is to create an environment where they feel they can succeed. We have to teach women to take their seat at the table and make their voice heard. We have to provide early stage, hands-on tech experience to give them credibility for when they take on technology leadership roles later in their careers.” As she looks ahead to her role as chief innovation officer, she says, “Innovation is at the core of what we do at Deloitte. I’m eager to search out the best of what’s out there so we can drive new, cutting-edge technology solutions to market and deliver outsized results for our clients. It’s what I love to do.”

from your first moment...

to your big moment

and all the little moments after.

the life you build matters. build it here.

wedding images by Mirage Photography

contact us online at through email at by phone at 434-556-5562 or visit us at 5600 Moonlight Drive, Charlottesville, Virginia

welcome to mount ida reserve. this pastoral community offers luxurious custom homes on spacious parcels at the farms of turkey run, two award-winning wedding and event venues at mount ida farm and vineyard, and the new tasting room & taphouse at mount ida reserve, a unique winery brewery combination serving tastings and a robust pairing menu, seven days a week. 21+ acre parcels beginning at $195,000. homes beginning at $925,000.


In Memoriam The Darden School offers its condolences to the families of the following individuals whose deaths have been reported to us in the past six months.

Wheeler K. Bell (MBA ’57)

Jack W. Bergstrom (TEP ’69)

H. Lee Boatwright III (TEP ’60) Scott C. Brittain (MBA ’83)

John H. Bryan (Class of 1960)

George T. Bryson Jr. (TEP ’59) Brian W. Chase (MBA ’92) Brian J. Cowan (MBA ’91)

Robert H. Crocker (MBA ’79) John H. P. Davis (MBA ’57)

Ralph L. De Groff Jr. (MBA ’60) John E. Dudley (MBA ’68)

Harper J. Elam III (TEP ’67) Lewis B. Flinn Jr. (MBA ’57) W. Kim Foster (MBA ’77) John E. Galvin (TEP ’64)

Langhorne Gibson Jr. (MBA ’65) Richardson Grinnan (TEP ’87)

Jeffrey Hammond Long (EMBA ’15) James W. MacAllen (MBA ’68)

Kenneth W. MacCormac (MBA ’60) David B. McMullin (MBA ’64) Thomas W. Nowell (TEP ’70) Donald D. Oliver (MBA ’75) Ronald W. Philips (TEP ’66)

Glenn C. Reinhold (MBA ’67) Richard C. Rotz (TEP ’73) G. E. R. Stiles (MBA ’59)

David H. Stovall Jr. (MBA ’71) William L. Talbert (MBA ’73) John C. Wilcox Jr. (TEP ’76)

Kenneth A. Wright (TEP ’80)



LEARN. INSPIRE. MAKE MEANINGFUL CONTRIBUTIONS. Take your career further faster, with one of the world’s most influential companies.

The Best Team Wins’ is more than a catch-phrase; it is a core value that unites the Danaher family toward a common goal. It takes the focus off of the individual and celebrates the achievements a team can accomplish together. I learned that lesson early in my career in the Marine Corps. I discovered its application in business during my tenure at Darden. Now, I see its successful application on a daily basis. There is no better company to win with a team than Danaher.” MICK DENNER, PRODUCT MANAGER, RADIOMETER AMERICA

I already knew Danaher was a high-performing corporation and that sparked my interest, but when I had the opportunity to participate in a Danaher kaizen in Geneva, Switzerland I realized they did more than just hire intelligent, highperforming people. I trusted the process and had a great internship experience at the corporate office. Now, I’m looking forward to helping build the Danaher brand!” CHINAECHEREM OMENYINMA, VERTICAL MARKETING MANAGER, VIDEOJET

Coming out of Darden I chose to work for Danaher because of the exceptional level of executive talent and our leaders’ commitment to my growth and development. The GMDP program specifically affords a diverse range of functional experiences on the path to General Manager in a field that I’ve grown passionate about—enhancing water quality worldwide.” NICOLE PUHL, BUSINESS UNIT MANAGER, HACH CLAROS

General Manager Development Program (GMDP)

Danaher Summer Internship Program (DSIP) WINTER 2019




The Darden School of Business wishes to thank all of our corporate partners for their support. Their annual, unrestricted gifts to Darden support various academic, student life and recruiting activities.

GOLD LEVEL ($100,000+)

SILVER LEVEL ($50,000+)

BRONZE LEVEL ($25,000+)

ORANGE LEVEL ($10,000+)

NAVY LEVEL ($5,000+)

For more information about corporate opportunities, contact Kara Ramirez Mullins at or +1-434-243-0834.




The five leadership boards of the Darden School of Business are composed of more than 150 distinguished leaders who collectively serve as an innovative force in the advancement of the Darden School throughout the world. (Listing as of 31 December 2018)


Robert L. Huffines (MBA ’92) JPMorgan Chase


Elvis Rodriguez (MBA ’10) Adelante Capital Management

CHAIR Elizabeth K. Weymouth (MBA ’94) Grafine Partners

Martina T. Hund-Mejean (MBA ’88) MasterCard

CHAIR Warren F. Estey (MBA ’98) Deutsche Bank

Nancy C. Schretter (MBA ’79) The Beacon Group

VICE CHAIR Robert J. Hugin (MBA ’85) Retired, Celgene IMMEDIATE PAST CHAIR James A. Cooper (MBA ’84) Thompson Street Capital Partners

David B. Kelso (MBA ’82) Retired, Aetna Life Insurance Rosemary B. King (MBA ’91) K&B Fund Mark J. Kington (MBA ’88) Kington Management LLC

PRESIDENT Patrick A. O’Shea (MBA ’86) ICmed LLC Kristina M. Alimard (MBA ’03) University of Virginia Investment Management Co.

David A. Simon (MBA ’03) SRS Capital Advisors Inc. Jason Sinnarajah (MBA ‘07) Ziff Davis Henry F. Skelsey Jr. (MBA ’15) GroundTruth David L. Tayman (MBA/JD ’99) Tayman Lane Chaverri LLP

Kirby C. Adams (MBA ’79) Retired, Tata Steel Europe

Naresh Kumra (MBA ’99) JMATEK Ltd., La Rochelle Ventures Ltd.

J. Michael Balay (MBA ’89) Wiswell Advisors LLC

Lemuel E. Lewis (MBA ’72)

Scott C. Beardsley University of Virginia Darden School of Business

Jeanne M. Liedtka University of Virginia Darden School of Business

W.L. Lyons Brown III (MBA ’87) Altamar Brands LLC

Nicole McKinney Lindsay (MBA ’99/JD ’00) MasterCard

Mary Buckle Searle (MBA ‘86)


Jerome E. Connolly Jr. (MBA ’88) Credit Agricole

Elizabeth H. Lynch (MBA ’84) Evercore

Andrew G. Crowley (MBA ’11) Markel Corp.

CHAIR J. Michael Balay (MBA ’89) Wiswell Advisors LLC

Jonathan D. Mariner

Richard P. Dahling (MBA ’87) Fidelity Investments

VICE CHAIR Richard C. Edmunds (MBA ’92) Strategy&

Christian Duffus (MBA ’00) LLC

Danielle Eesley Amfahr 3M

Michael J. Ganey (MBA ’78) GaneyNPD

Stuart C. Bachelder (MBA ’06) DaVita Kidney Care

J. Andrew Bugas (MBA ’86) Radar Partners Susan J. Chaplinsky University of Virginia Darden School of Business H. William Coogan Jr. (MBA ’82) Charles R. Cory (MBA/JD ’82) Retired, Morgan Stanley & Co. Inc. Robert G. Doumar Jr. (MBA/JD ’88) Park Square Capital LLP Frank S. Edmonds (MBA/JD ’95) Panning Capital Managment LP Richard C. Edmunds (MBA ’92) Strategy& Karen K. Edwards (MBA ’84) Boyden Global Executive Search Warren F. Estey (MBA ’98) Deutsche Bank Arnold B. Evans (MBA/JD ’97) SunTrust Bank John D. Fowler Jr. (MBA/JD ’84) Wells Fargo Securities Catherine J. Friedman (MBA ’86) Independent Consultant John W. Glynn Jr. Glynn Capital Management Kirsti W. Goodwin (MBA ’02) Gordon Grand III (MBA ’75) Retired, Russell Reynolds Associates Inc. Peter M. Grant II (MBA ’86) Anchormarck Holdings LLC John C. Jeffries, Jr. University of Virginia

Carolyn S. Miles (MBA ’88) Save the Children J. Byrne Murphy (MBA ’86) DigiPlex Group Cos. Michael E. O’Neill (MBA ’74) Retired, Citigroup Patrick A. O’Shea (MBA ‘86) ICmed LLC Zhiyuan “Jerry” Peng (MBA ’03) Sands Capital Management Alex R. Picou (MBA ’89) JPMorgan Chase & Co. James P. Ryan University of Virginia Frank M. Sands Jr. (MBA ’94) Sands Capital Management Frank M. Sands Sr. (MBA ’63) Sands Capital Management Henry F. Skelsey (MBA ’84) 3QU Media LLC Erik A. Slingerland (MBA ’84) EAS International SA Shannon G. Smith (MBA ’90) Abundant Power Bruce R. Thompson (MBA ’90) Bank of America William P. Utt (MBA ’84) Retired, KBR Inc.

Yiorgos Allayannis University of Virginia Darden School of Business Keith F. Bachman (MBA ’89) Bank of Montreal Christine P. Barth (MBA ’94) Harren Equity Partners LLC

Ira H. Green Jr. (MBA ’90) Simmons & Company International Thomas Gonzalez (Class of 2019) Darden Student Association Owen D. Griffin Jr. (MBA ’99) Evan A. Inra (EMBA ’08) Amazon Web Services Kendall Jennings (MBA ’12) Accenture

Lowell Simmons Ukrop (MBA ’89) Corrugated Partners LLC Shaojian Zhang (MBA ’99) Tungray Group

Joseph P. Balog (MBA ‘88) PwC Mazen G. Baroudi EY Helen M. Boudreau (MBA ’93) Bill and Melinda Gates Medical Research Institute Mark S. Bower (MBA ’02) Bain & Company

Bruce D. Jolly (MBA ’67) Lighthouse CFO Partners

Kevin C. Clark (MBA ’01) Ergobaby

Harry N. Lewis (MBA ’57) Retired, Lewis Insurance Agency Inc.

William S. Cohen (MBA ’07) U.S. Trust

Kristina F. Mangelsdorf (MBA ’94) PepsiCo Inc.

Robert E. Collier (MBA ’10) Danaher (McCrometer)

Douglas T. Moore (MBA ’80) Med-Air Homecare

D. Lynnette Crowder (EMBA ‘10) WestRock

Betsy M. Moszeter (EMBA ’11) Green Alpha Advisors

Paul H. Donovan (MBA ’95) Microsoft

Nikhil Nath (MBA ’00) Standard Charter Bank

Sarita T. Finnie (MBA ’01) Johnson & Johnson

Richard J. Parsons (MBA ’80)

Joseph B. Folds (MBA ’91) The Campbell Soup Company



Ivy L. Ghatan (MBA 09) LinkedIn


Sunil K. Ghatnekar (MBA ’92) Prescient

CHAIR Alex R. Picou (MBA ’89) JPMorgan Chase & Co.

S. Caribou Honig (MBA/JD ’96) HR Transform and InsureTech Michelle B. Horn (MBA ‘95) McKinsey & Company Kecia E. Howson (MBA ’99) SunTrust Robinson Humphrey Marcien B. Jenckes (MBA ’98) Comcast Cable John B. Jung Jr. (MBA ’84) BB&T Capital Markets Harry A. Lawton III (MBA ’00) Macy’s

VICE CHAIR Nicole McKinney Lindsay (MBA/JD ’00) Mastercard Center for Inclusive Growth Nicola J. Allen (MBA ’10) Danaher Corp. Tawana Murphy Burnett (MBA ’04) Facebook Paige T. Davis Jr. (MBA ’09) T. Rowe Price

Murray R. Deal Louis G. Elson (MBA ’90) Palamon Capital Partners LLP David R. Frediani Ironshore Inc. Anthony J. Hobson (MBA ’74) James Dyson Group Ltd. Clelland Peabody Hutton (MBA ’75/JD ’77) Ajia Partners Cave Richard K. Loh (MBA ’96) Ploh Group Pte. Ltd. Elie W. Maalouf (MBA ’89) InterContinental Hotels Group Todd R. Marin (MBA ’89)

Teresa A. Epperson (MBA ’95) A.T. Kearney Inc.

Agustín Otero Monsegur (MBA ’06) Humus Capital LLC

Ray R. Hernandez (MBA ’08) The Advisory Board Co.

Pascal Monteiro de Barros (MBA ’91) MAB Partners

Bonnie K. Matosich (MBA ‘92) The Walt Disney Company

Andrew C. Holzwarth (EMBA ’09) Stanley Martin Cos.

H. Whit McGraw IV (MBA ’07) S&P Global Market Intelligence

Octavia G. Matthews (MBA ’89) Aramark Uniforms

Antonio U. Periquet Jr. (MBA ’90) Pacific Main Holdings, Campden Hill Group

Jason P. Lund (MBA ’06) Fortive (Global Traffic Technologies & ANGI Energy Solutions)

Fernando Z. Mercé (MBA ’98) Nestlé Waters North America L. Michael Meyer (MBA ’92) Middlegame Ventures Diem H.D. Nguyen (MBA ’01) PPD Ann H. S. Nicholson (MBA ’01) Corning Abby A. Ruiz de Gamboa (MBA ’04) Deloitte Consulting LLP Kleber R. Santos (MBA ’01) Capital One Colin P. Smyth (MBA ’04) MetLife Thomas J. Steenburgh University of Virginia Darden School of Business Scott A. Stemberger (MBA ’04) The Boston Consulting Group Katherine Vega Stultz Celgene Eric M. Swanson (MBA ‘08)

Willard L. McCloud III (MBA ’04) Pfizer Michael A. Peters (MBA ’09) Comcast Corp. Reynaldo Roche (MBA ’07) Delta Air Lines Inc. William B. Sanders (MBA ’06) Korn/Ferry International Rhonda M. Smith (MBA ’88) Breast Cancer Partner

Hagen Radowski (MBA ’91) MGP Americas Inc. Vincent M. Rague (MBA ’84) Catalyst Principal Partners Fiona Roche (MBA ’84) Estates Development Co. Pty. Ltd., Adelaide Development Co. Henry F. Skelsey (MBA ’84) 3QU Media LLC Nishal Sodha (GEMBA ’17) Global Hardware Ltd.

Jeffrey W. Toromoreno (MBA ’06) Citigroup

Ichiro Suzuki (MBA ’84) George S. Tahija (MBA ’86) PT Austindo Nusantara Jaya (ANJ)

Daniele M. Wilson (MBA ’11) Johnson & Johnson

Jing Vivatrat Angel Island Capital


Baocheng Yang (MBA ’04) Huanghe Science and Technology College

CHAIR Rosemary B. King (MBA ’91) K&B Fund

Jeffrey J. Yao (MBA ’01) Profision Shipping Capital Management Ltd.

VICE CHAIR Naresh Kumra (MBA ’99) JMATEK Ltd., La Rochelle Ventures Ltd.

THAN K YO U to our alumni and

Marcos P. Arruda (MBA ’02) Topico

volunteer leaders

Steven D. Williams (MBA ’06) Delta Air Lines, Inc.

James Su-Ting Cheng (MBA ’87) New Richmond Ventures, Blue Heron Capital, Lee & Hayes PLLC

for a record year of

Gary R. Wolfe (MBA ’92) Wells Fargo Securities

Vidyanidhi (VN) Dalmia (MBA ’84) Dalmia Continental Pvt. Ltd.

Edward W. Valentine (MBA ’93) Harris Williams



support for Darden.


Questions With DOUG LEBDA (EMBA ’14)


oug Lebda’s journey to earn his MBA is anything but ordinary. He enrolled in Darden’s full-time MBA in the mid-1990s, around the same time he had an idea to revolutionize a stodgy home mortgage industry through the emerging power of the internet. He entered the idea into an entrepreneurship contest at Darden, finishing second. Before he could earn his degree, the fledgling company’s rapid growth forced Lebda to leave Darden. That company? LendingTree, the $600 millionplus revenue business that Lebda still leads as founder and CEO. Just a few short years after Darden launched its Executive MBA format and despite enormous responsibility leading a publicly traded company, Lebda returned to Darden in 2012. Two years later, thanks to the flexibility of the executive format, Lebda finally earned his degree from the school he says contributed immensely to his success building LendingTree. 1. What’s the best advice you have ever received? It’s a tie between: a) A quick “no” is better than a slow “maybe.” b) Raise a lot of money but pretend like you don’t have any. c) Time, cost, quality — pick two. 2. Who do you most admire? The three Js: Jim Collins, Jack Welch, Jesus. And my dad. 3. What motivates you? Learning new things and having a positive impact on people’s lives. 4. When and where do you do your best thinking? In the shower after a workout 5. What’s been on your mind lately? Making sure LendingTree can continue to grow without bureaucracy. 6. What are you reading these days? This Time Is Different by Carmen Reinhart and Kenneth Rogoff 7. What technology can you not live without? Portable chargers 8. What’s your motto? Get Stuff Done.

9. How do you deal with conflict? By bringing it up (or urging others to bring it up) openly and honestly. I actually enjoy conflict. Two sides can debate their position and the best idea wins, with nothing left unsaid. 10. What characteristics do you look for in people? An ownership mentality and thinking like an entrepreneur. 11. How do you measure success? For LendingTree, it’s about how many lives we’re able to positively impact as both a company and an employer. Personally, there will always be more to do, new goals to work toward. 12. How do you unwind? Watching movies with my wife. 13. What is your favorite cause? Any cause that helps the less fortunate achieve the American Dream. 14. What do you lose sleep over? My inability to sleep. 15. Which class at Darden impacted you the most? The Second Year entrepreneurship class taught by Jim Collins in the spring of 1997. 16. You left the full-time MBA program to found LendingTree in the 1990s but came back to earn your MBA through the Executive MBA format in 2014. How did you manage to pull that off? The format of the Executive MBA program is great for any executive at any level. You need to be ready to do Darden-level work for certain, but what you’re learning is incredibly interesting, and I was always eager to get back to Charlottesville to learn something new and engage with the cohort. I’d bring new ideas or something I learned back to the team at LendingTree and was able to

really apply what I was learning, almost in real-time. 17. You and your wife, Megan, endowed the Lebda Family Scholarship Fund last year to support Darden students with demonstrated financial need. Why? Our family felt that a Darden education should not be hindered by financial cost. Students with financial need will add immeasurable value to the Darden student body. 18. Does LendingTree still feel like a startup to you? What stands out most to you about how the company has changed — and hasn’t changed — in 20+ years? Yes, it absolutely feels like startup since it’s in a constant state of change. The changes within the industry, the growth of the company, the opportunities and challenges are continually evolving. At the same time, what has remained the same are our core principles, mission and vision of the company. Those actually haven’t materially changed since I first wrote them over 20 years ago. 19. Did you ever think you’d be the face of the company in national television ads? What’s been the feedback from family and friends? No, I never thought I’d be on TV ads. We aren’t running any “Doug” spots at the moment, but I’d say my parents were proud, my friends offered “constructive” criticism and my wife felt like she couldn’t get away from me. 20. What excites you the most about LendingTree’s future? The technology in the industry seems to finally be catching up to the idea I had 20 years ago, and we have such a strong team at LendingTree. I’m excited about being able to help more consumers save money on their loans, credit cards, insurance, etc.



T R U E LEADER S R E D EF IN E T HE J O URNEY The Executive Program (TEP): Strategic Leadership at the Top TEP offers a global leadership experience like no other, a complete immersion into the principles, habits and perspectives of transformational leaders that will provide a higher view for how you lead your

organization in today’s complex, uncertain world. TEP includes both virtual and in-person modules, extending the learning

journey to provide ongoing support and guidance as you share and implement new insights

within your organization.

In-Person Module: 2–28 June 2019 Upcoming Program: 1 May–1 Oct 2019 L E ARN MORE AB O U T T E P F O R YO U R S E L F AN D YOUR T OP L E A D E R S AT DA R D E N . E D U / TE P 1 9

University of Virginia Darden School Foundation P. O. Box 7726 Charlottesville, VA 22906-7726

The Abbott Society (1957–69) 1959 1964 1969 1974 1979 1984 1989 1994 1999 2004 2009 2014 2018



Profile for Darden School of Business

The Darden Report Winter 2019