By Claire Underhill, undergraduate Finance major at the Carlson School of Management. Claire is also on the Healthcare team of the Carlson Growth Equity Fund, and has been involved with the program on a volunteer basis for over a year.
The 2019 CFA Society Minnesota Annual Dinner featured a conversation with author Bethany McLean, moderated by Andrew Rem, CFA (CFA Society of Minnesota Board member), and aided by Past President Josh Howard, CFA. McLean is currently a contributing editor at Vanity Fair, and has also written multiple books such as “The Smartest Guys in the Room: The Amazing Rise and Scandalous Fall of Enron.” The evening featured a wonderful discussion as McLean tracked the progression of her career from starting as an analyst at Goldman Sachs, to joining Fortune Magazine as a fact-checker, which ultimately led to her first novel and current role.
Her latest work, “Saudi America: The Truth about Fracking and How It’s Changing the World,” explores the economics around fracking. McLean is skeptical of the drive for energy independence, and makes the case for how fracking might change the geopolitical landscape – though not in the way you might think.
Throughout her career, Mclean has documented multiple instances of business gone wrong and has learned a few things about what she calls “the progression of rationalization.” She talked about the need we have as a society to find who the bad guys were in the wake of crisis, and punish those responsible. Oftentimes, though, the world is not so clear-cut. The line between a visionary and a fraudster can become blurred by the complex human drama and emotions that naturally surround the process of building something innovative. McLean’s key tool in deciphering these dramas? Curiosity. When asked about how she gets people to talk to her, McLean stated that being genuinely interested in what people have to say goes a long way. Through this approach, McLean has developed a unique lens for people who have crossed ethical lines. Good people taking gambles to cover-up for their last mistake. Powerful culture that inflates egos.
What can be done to fix these problems? McLean said the challenge with regulation is that it is always backward looking and often lacking in imagination. Regulators are always stuck trying to fix yesterday’s problems without the ability to predict what might happen next. Furthermore, even if all accidents are prevented, McLean argues that creativity would also leave the system. This system has failed in front of McLean many times, yet she still views business as a signal of hope. After spending so much time writing about unethical behavior, McLean describes herself as a skeptic, not a cynic, and loves to see the transformative power that business can have in a community.