March 29, 2017, by Paul Caulfield

Sustaining finance for the future

The world of business doesn’t stay static, which means it doesn’t make any sense for an MBA course to either. That’s why at Nottingham we pride ourselves in keeping up with the times. For an MBA to stay relevant, it’s vital that we innovate and keep up with changing agendas and the demands of our practitioners. 

To that end, we have introduced a new module to the Executive MBA – Sustainable Finance. Led by Bob Berry, Boots Professor of Accounting and Finance at Nottingham University Business School, this module will teach practical techniques in financial decision-making and analysis. It will also highlight the extent to which these techniques either form a barrier to the attention given to sustainability issues or help with the consideration of those issues.

For Prof Berry, who has worked in the pharmaceutical and motor industries as well as holding academic posts at the universities of Warwick and East Anglia, it is about going right back to the basic assumptions of corporate finance and looking at them differently. And by doing so through an MBA rather than an academic paper, it is getting attention from practitioners themselves rather than just fellow academics, he says.  

“I wanted to be talking to practitioners,” says Berry. “It was fairly clear we could extend the module in corporate finance but when I thought about it I could see the possibility that the way in which finance is typically presented could raise a set of barriers which stopped sustainability being considered effectively.

“I have always had a sense that if I worked in a business school my attention should be directed to the problems of practice, ways in which practice can be improved and I thought that the sustainability agenda was important enough to warrant attention from practitioners.

“My normal teaching is corporate finance and over the years I have broadened the material in that module so that I pay rather more attention to what the objective of a company should be rather than the standard textbook ‘companies should operate in the interests of shareholders’.

“Essentially what I am doing is looking at the basic assumptions that a finance textbook or standard finance teacher would make when starting to teach corporate finance.”

The new Sustainable Finance module will cover areas including: the shareholder value basis of financial management; discussion of the concept of sustainability; issues in capital budgeting and examples; financial forecasting and financial planning; working capital management and sources of finance and financial flexibility.

 One aim of the module is to reconcile the sustainability agenda within the corporate growth agenda and encourage students to challenge the assumptions that might be made in traditional corporate finance. “It’s a case of picking up the standard statement we teach when we teach finance and saying I can help students understand that better by asking, ‘what does that assume?’, and the environmental and sustainability agenda helps me do that. What I’m basically saying is look at corporate finance, recognise that we need companies to generate products, service, but look at the way we analyse them and think about the blinkers that finance might be putting in our way when we look at the consequences of what we are doing.”

And while the Sustainable Finance module will focus on the financial decision-making process rather than the the analysis of CSR or sustainability reports, it’s not one that CSR-focused practitioners should ignore. “You have to be able to understand the finance in order to counter the finance person’s argument,” says Berry. “This will do that.”

Many MBA Executive students often abandon finance, says Berry, but he hopes the new module will tempt them to stay. “What I would be saying to them is I will teach you the core ideas of finance and I will teach them in such a way that you can put them in a broader context and understand them better. I see this module as valuable to people who want to learn finance but I imagine they want to learn finance for a variety of different motives. I am also hoping that I can convince some people who have decided never to do finance again that this might be something to convince them that they might want to try it again.”

 This piece was written by Ellen Manning, a freelance journalist, writer & blogger. Ellen writes for several leading publications, and also helps our MBA students to develop their media skills.

Images: 1) Aaron Patterson Money-2) Anton Diaz – Money is an effect
Attribution-Non-Commercial 2.0 Generic (CC BY-NC-SA 2.0)

 

 

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