Thursday, Nov. 21, adjunct professor of finance Carl Tack ’78 delivered a community lecture on balancing financial interests and ethical concerns within corporations. Hosted by the Howard J. Busbee Finance Academy at the Raymond A. Mason School of Business, the lecture series, returned by popular demand, aimed to spark campus-wide engagement surrounding financial and corporate governance.
Tack opened the lecture with a provocative question for the audience. “What happens when a company prioritizes shareholder value over safety and innovation?” Tack posed.
Using Boeing as a cautionary tale, Tack recounted incidents like an emergency airplane landing after a door panel detached mid-flight and NASA astronauts stranded by the company’s Starliner capsule. He illustrated how a shift in corporate culture — from engineering excellence to financial engineering — can have far-reaching consequences.
“Boeing’s culture went from being a culture of an engineering company, focused on design, excellence, manufacturing excellence, product quality and reliability to a culture of ‘yeah, we still have to make great planes, but we also have to make money,’” Tack said.
Tack highlighted how two crashes involving Boeing 737 MAX planes in 2018 and 2019 exposed critical flaws in the company’s flight control software, resulting in 347 deaths. He pointed to Boeing’s 1997 merger with McDonnell Douglas as the turning point that introduced a profit-driven ethos and changed Boeing’s DNA.
Tack explained that the merger brought financial engineering to the forefront, fundamentally shifting the company’s priorities from innovation to shareholder returns.
“McDonnell Douglas was a company run by engineers, but it was a much more financially-savvy company, generated more profitability, better returns on investment, better shareholder returns, better stock price performance,” Tack said. “The executives got compensation linked to those metrics, not just engineering metrics. When Boeing bought McDonnell Douglas, that culture came into Boeing.”
Tack maintains a Substack blog, Banking and Beyond, where he dives deeper into topics like corporate governance, public policy and financial institutions. He often connects current events with finance principles, offering readers a chance to explore real-world applications.
The blog post Tack wrote about Boeing inspired the lecture’s focus and served as a resource for attendees.
The open Q&A portion of the event offered students an opportunity to engage directly with Tack.
Gavin Dennis ’27 asked about Boeing’s reliance on government contracts and its impact on defense policy. Tack acknowledged the issue’s complexity, explaining how Boeing’s manufacturing footprint and supply chain span nearly every U.S. state.
“The government isn’t just a customer — it’s a safety net,” Tack said.
He highlighted the concept of moral hazard, whereby large corporations take excessive safety risks, assuming government insurance will protect them.
“Moral hazard is the phenomenon by which an insured individual or company will take more risk because of insurance,” Tack said. “So if I have really good insurance on my car, I may be less careful about getting in accidents. I may not take the same steps to protect my house against fire hazard because I have insurance.”
Tack elaborated on how this risky practice contributed to the 2008 global financial crisis.
“A lot of people think that one of the reasons we got into the global financial crisis is that banks thought, ‘we’ll operate our business with basically no equity, we’ll invest in really high-risk assets like subprime mortgages and junk bonds,’” Tack said. “If it all works out, we’re going to make a ton of money for shareholders. Heads, we win, tails, we lose.”
Another question focused on balancing profitability with ethics, which Tack framed as central to corporate decision-making.
“It’s not just about making money—it’s about earning and maintaining public trust,” Tack said.
Finance Academy students at the talk reflected on Tack’s insights, noting the relevance of his discussion to broader themes of ethics and leadership.
Co-vice president of Finance Academy Amar Srinivasan ’26 described the lecture as a sobering look at corporate governance.
“It was really interesting to hear about the balance between shareholder returns and product quality,” Srinivasan said. “You don’t always hear about how decisions impact long-term trust and reliability.”
Fellow co-vice president Sofia de Chiara ’25 highlighted the lecture’s applicability to students entering various industries.
“These are incredibly complex issues,” de Chiara said. “Companies have a responsibility to create products they can stand behind, like safe planes customers can trust. When they succeed in their mission, financial returns follow.”
President of Finance Academy Charlie Unice ’24 echoed the importance of understanding these dynamics.
“Boeing’s story underscores how critical it is for companies to maintain trust while also delivering shareholder value,” Unice said. “It’s not easy, but it’s essential.”
Tack encouraged attendees to think critically about the purpose of a business.
“Is a corporation’s job to make money or to deliver a product?” Tack posed.
He referenced Tim Koller’s book “Value: The Four Cornerstones of Corporate Finance” to underscore the delicate balance successful companies must strike.
“Tim Koller believes as I do that the purpose of a business corporation is to make a product that customers want to buy and that making money is a means to this end,” Tack said. “But finance people think it’s just the opposite, that making planes is a means of making money. Two different views of the world. Successful companies have to do both of those things.”
The Finance Academy plans to continue hosting lectures that bridge current events and classroom principles.
Unice felt that Tack’s presentation offered students a rare opportunity to connect with complex issues at the intersection of finance, ethics and innovation.
“Lectures like these are a reminder to stay curious and think critically,” Unice said. “Whether you’re a finance major or not, there’s always something to learn.”
