It is my privilege, more than that my honour, to be writing about my one time student, Gishan Dissanaike at Peradeniya, who after a brilliant career as an academic in Britain has been recently appointed as Professor of Corporate Governance to a prestigious named-endowed Chair at the University of Cambridge.
It may be mentioned here that Gishan is understood to be the first graduate of a Sri Lankan University to get a professorial Chair at either Oxford or Cambridge. Gishan graduated in 1986, having read a Special Economics degree course, specializing in Monetary Economics for his B.A. degree which he obtained with flying colours. He achieved a First Class in Monetary Economics at Peradeniya which is of significance as a feat, for in the annals of the Department of Economics this happened to be the First Class in that subject that was earned after a gap of 18 years.
My contribution to him in his making was to lecture to him on Economic Development and Planning and, of course as Head of the Department, make the necessary arrangements for his studies and supervise them in an overall way.
In the year after his graduation he was offered a Presidential Scholarship for post graduate studies in the UK. A few weeks later, Trinity College, Cambridge, awarded him one of just six prestigious External Research Studentships which were open across all subject areas and to graduates from all universities, other than Cambridge. He was also awarded an Overseas Research Studentship by the Committee of Vice-chancellors and Principals of the Universities of the UK. The Presidential Scholarship was available for two years of study, whereas the Trinity Studentship and ORS award were available for three years of doctoral work.
With my background knowledge and experience I could ponder over on the various choices he had, having done my own post-graduate studies at the LSE and having spent my sabbatical as a Commonwealth Academic Staff Visiting Fellow at the University of Cambridge. Gishan eventually accepted only one year of funding from the Presidential scholarship and relied on the Trinity and ORS awards in the next three years. He chose to hold the Presidential Scholarship only nominally in the second year, to free up the money for use by another Sri Lankan student. Thus, he was admitted to Trinity College of Cambridge University in October 1988 where he completed his MPhil and Ph.D in Economics in just over four years.
With his appointment subsequently as a lecturer in the Department of Economics at the University of Durham, Gishan began his career in his chosen field which is university teaching. On his graduation from Cambridge he certainly would have had many lucrative opportunities in the corporate sector or in other well paid research organizations but using his own wisdom and insights, he chose to develop his career working with academic communities in an academic environment. After a one year stint at the University of Durham he joined the University of Cambridge where his talents as a post-graduate student were well known and appreciated and was welcomed warmly by his former teachers.
hereas Gishan completed his PhD in the Faculty of Economics, he returned in 1994 to a University Lectureship in Financial Economics at the University’s Judge Business School. Judge Business School had been created in 1990 to be a focus for business and management-related teaching and research, and brought, under one roof, research that had previously been pursued in disparate faculties, such as Economics, Engineering, Mathematics, and Sociology. A few years later, the MPhil in Finance programme that used to be run by the Economics Faculty became a joint degree programme offered by three Cambridge faculties – Economics, Mathematics and Judge Business School – and Gishan was installed as the Director of the cross-faculty programme in finance.
In 2009 a prestigious endowed Chair for Corporate Governance at Cambridge was advertised for open selection. Gishan did not apply for it as he had been setting his sight on an internal promotion to a professorship. But by that time his reputation for his studies on stock market efficiencies/inefficiencies had been noted by the international electoral body that had been appointed to do the selection. Going by the information provided by one of the external committee members who had heard about his work, the electors sought Gishan’s consent to be included in the short list they were preparing. This process ended in 2010 with him being appointed unanimously as Robert Monks Professor of Corporate Governance, and then subsequently as the Head of the Finance Department in his faculty.
The subject of Corporate Governance relates to the internal, market and regulatory mechanisms that can potentially reduce or eliminate the principal-agent problem in organisations, so as to enhance economic efficiency. As such, different subjects such as economics, finance or law, all have their stakes in it. Gishan’s own research focuses on the efficiency/inefficiency of stock market pricing and its role in corporate governance.
I as a development economist cannot have much to say on this except to reflect on commonly known related issues. Keynes whom we studied has led us to some degree of bewilderment with the logic behind the speculative motive lending to the suggestion that the bullish or bearish, buying or selling, in the stock exchange produce action that is similar to what takes place in the race course. We felt let down when we came to this point because troubling questions began to haunt our minds. If that is how the stock exchange behaves how can it function rationally to allocate and channel resources into productive investments through the capital market and bring about capital growth leading to economic growth and development?
Also, what about the declining trend of long term average productivity of capital on which Keynes had much to say? Next, from a development economics point of view how would the theory of a sector that would take the lead, rise in productivity and virtually pull the economy forward but eventually lose its momentum only to be succeeded by another sector that takes the lead and further pulls the economy forward, and so on and so forth, as history of the economics of technological innovations testifies, can play their roles as expected in a capital market that is so weird as a gamblers’ den?
These are some of the issues that would cross the mind of a development economist like me. Capital market is one where one expects near perfect competitive buying and selling operations to prevail. Much of this activity whether driven by bullish speculative demand or by bearish precautionary action producing events of a rise or a decline in the market prices of assets can be auto-generated. If some expect the prices of some stocks to rise then in the wake of their present buying others will also follow suit and the expected price rise will become a reality in the event, only to be followed by a decline in prices again also in an auto-generated manner.
The reverse of this happens when some expect the asset prices to fall and start selling making it happen that such will become a reality with others following suit. In this situation the rises and falls are only temporary because a process when pushed further will spell its own death knell. These are rises and falls in asset prices in roller coaster fashion, so to speak, that we are now witnessing in our country. What can take place is a mere rise in the market prices of assets not necessarily involving an increase in investment which is a concern from an economic development point of view.
For instance, although we see rises in the market prices of stock exchange assets we do not see any increase in foreign direct investment (FDI). We now see in Sri Lanka our small capital market performing ups and downs, but should that warrant some to get tempted to consider an upward swing as an indicator of the improvement of the health and strength of the economy and get themselves transported into a “feel good” mood?
Gishan’s research is consistent with the idea that stock market prices, even in a developed market like the UK, are subject to overreaction and fads. Efficiency analysis of the stock exchange is his approach. It is indeed a hard nut to crack. This is where that originality, intellectual courage and penetrative thinking like what Gishan has always displayed can lead to a better understanding of the great puzzles in the working of the capital market.
There are no shortcuts or easy paths to good academic achievements; it is only dedicated and disciplined application of one’s capabilities with a sense of modesty that can take one up the academic ladder, the same way that Gishan built himself up as a high profile academic within so short a time. Indeed, given his qualities and other attributes he did not have to chase after opportunities but rather the opportunities chased after him!