With great power comes great responsibility

by Rachael Revesz

We’ve all heard the saying before. Yet Muzaffar Khan argues this concept is gaining a new momentum, being introduced into Harvard and other business schools as part of their MBA curriculum. The aim? To instil a sense of moral obligation into our next generation of wealthy bankers.

Muzaffar Khan is what one might call a “big-shot”. Born in Karachi, Pakistan, the 41 year old made his fortune at various banks on Wall Street and in London (at one point working as a consultant to the Man Group Plc with $75bn in AUM) and has now turned his attention towards activities such as the promotion of renewable energy and mentoring young people who have the capacity to achieve yet, for whatever reason, are not fulfilling their potential.  Durham is to expect him on February 12, along with Hugh Pym, a financial and political journalist, and Howard Wheeldon, a senior strategist and economic expert, to talk to students about the financial crisis and its impact on a global scale, the developmental challenges we face and the most innovative ways to deal with them. The students who come to the seminar will also get very specific advice on how to get top jobs in the city, as well as tips on how to improve their grades.

We should probably listen to the panellists. After all, one of Khan’s first LSE student mentees, Jan Sramek, the UK A-level record holder with £100,000 worth of scholarships under his belt, was named one of 100 Rising Stars by Financial News – all before his 23rd birthday. But what pushes so many graduates towards the city in the first place?

“Money”, is Khan’s simple response. “Who can afford a four bedroom house in London, if not bankers? People realise that a banker’s salary allows them to lead an affluent lifestyle.”

I supposed that this was also Khan’s motivation.

“Not really. When I had made enough to live on, the drive for me was how I could contribute to the world.”

Khan retired almost eight years ago – “retired” here means working as Managing Director and Principal Board Member of several social enterprises and international charities – but insists that he wasn’t tired of making money in the hedge fund world.

“I see society as having rights on me as well. Our activities are supported and nurtured by the taxpayer and, on some level, I owe my achievement to them.  I have this in mind in the way I trade, in the way I interact with clients: it’s always on the back of my mind that society at large is a partner in my success.”

Two words: Fred Goodwin. Surely the wealthy are only in a position to give so much back since they have taken so much?

“Bankers are simply acting as rational economic agents: they can and do move if they are offered a higher salary elsewhere. What is more important to focus on is how transparent and responsible banks are in the way they take risks.”

But Khan does deplore the obvious contradiction in the banking system.

“When banks make a profit, bankers get paid. When banks make a loss, the taxpayer foots the bill and the bankers still get paid. There is something inherently difficult to accept about that. How do you create a structure where people who take the risk also bear the cost of that risk?”

Khan explains that, due to the massive bail out of the world wide banking centre by the taxpayer, money has been reallocated from health, education and welfare payments to propping up the financial system, and undeniably these cuts in social spending have left scars. Furthermore, the worldwide developmental challenges that will be discussed in Durham’s seminar – such as global poverty, education, health care and the environment – have been exacerbated by the financial crisis, and therefore our sense of obligation to give something back, when working in this lucrative industry, should be even greater.

But how does all this affect our outlook, or help us on the road to success?

“It’s the idea behind it,” Khan responds. “It’s fine to make a lot of money, but it is important that the wealthiest people have a symbiotic relationship with their wealth creators – i.e. the people. At its finest, that translates into people such as Bill Gates, who give large amounts of money to good causes. By doing these things, we are facilitating other people’s transition into society.”

But it’s not just global poverty that business people such as Khan are fighting. “Aspirational poverty” is often the reason behind under-achieving. In order to get that top job and to increase our self-belief, there are two core pieces of advice, according to Khan, that are worth listening to. Firstly, finding a good mentor is the key to success.

“Without advice or people to support and guide you, the journey will be much harder. Students tend to spend a lot of time discussing career options with each other, which can run the risk of the blind leading the blind. Having direct communications with somebody who is already in the City is much more helpful.”

Khan has co-authored a book with his mentee Jan Smarek– “Racing Towards Excellence” – which contains “5% of his knowledge – a great start” for any City wanabee. When asked about his somewhat idealistic ideas of work-life balance in the book, Khan insists that this balance is possible, especially if we bag ourselves a good mentor. But how do we go about finding one?

“Durham is particularly lucky in that, because of its reputation, in any given year you could get 100 speakers to come and give talks. The problem is, do students attend? Do the societies work together to find the speakers? How many students get involved and vote in their elections? The great thing is how much power you guys have in getting what you want. So it’s sad to see how poorly attended these lectures are.”

But be warned; mentors don’t always come for free – unless you take a liberal interpretation of the word “payment”. Many mentees get involved with the mentor’s projects or charitable work, for example, instead of handing over cash. However, Khan argues that whatever kind of “payment” can be agreed upon, the mentor-mentee relationship will be of overall benefit to the student.

The second core piece of advice is to obtain the highest class of degree that you can.

“Students often don’t understand how important a 2:1 can be: it is a basic filter, especially for front office jobs in sales, trading and investment banking. Your employer has nothing else objective to go on. It’s a strict benchmark, and an easy quantifiable one.”

The forum of high-profile speakers in which Khan will be participating takes place on 12 February, in conjunction with the Durham University Investment and Finance Group (DUIFG), and should prove to stimulate exciting debate as well as giving a broader perspective on the world of finance.

“I hope that the Durham students can come away from this seminar having cultivated a sense of moral responsibility, so that they can contribute to creating a world with fair rules, integrity and mutual benefit. Without that all you create is an amoral vacuum.”

So come along to profit from the combined experience of these panellists. Who can argue with a man who managed the largest hedge fund in the world?

“Students don’t understand that advice – or at least the right kind at the right time – is much more powerful than just walking out with a degree.”

The DUIFG forum will be held in the Palace Green Debating Chamber on the 12th of February at 7pm until 8.30pm. Attendance is free and open to all students.

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