Like many of the other disciplines within the Faculty of Business and Economics, Finance was taught as a subject at the University of Melbourne long before it was formally established as its own department. The youngest of the faculty’s four departments, Finance was only recognised as a singular department in July of 2001.
An embryonic discipline
Prior to that, most of what would now be deemed ‘finance’ fitted under the remit of the discipline of Accounting. Just four years into the Bachelor of Commerce’s existence at the University, undergraduate accounting subjects added some lessons on the basics of business finance. In the decades that followed, the Bachelor of Commerce remained relatively practical in its attitude towards this area. Attitudes started to shift in the 1950s, however, as momentum grew within the modern academic discipline of finance.
Geoff Burrows, the esteemed stalwart of the Department of Accounting, recalls in his book Promise Fulfilled that the Faculty’s first piece of research into capital market strategy came in 1957, with Keith Jones and Ken Wright’s comparison of investment companies' financial performances against the Melbourne Stock Exchange.
Attitude shifts
By the 1960s, Burrows writes, it became clear that while the University (and many of its counterparts across the state) were offering business studies and accounting subjects, it was not covering the rapidly evolving academic theory behind corporate finance. In 1984, the University used the reputation of Ken Wright, as well as other leading researchers, to attract the attention of the Victorian government, who were trying to build Melbourne as a financial centre for the Pacific region.
The next state budget included a grant for the Faculty to “offer a Master of Commerce with a specialisation in Finance, to strengthen the undergraduate teaching of finance and to develop short, non-credit-courses.”
The first MCom students in Finance started in 1986, with the grant also helping establish a founding chair of Finance, which was filled by Professor Kevin Davis. This decade also saw Business Finance 1 emerge as the fastest growing undergraduate subject within the Accounting department. A coinciding boom in financial services in the late 80s prompted employers to increase their effort to woo high-achieving students completing these subjects.
A powerhouse emerges
In 1991, the Department of Accounting and Business Law became the Department of Accounting and Finance, which was then organised into four ‘clusters’: accounting, managerial accounting, information systems and finance. In 1994, the Master of Applied Finance was added, aimed at established financial practitioners wanting to bolster their experience with academic study. These options proved popular, with more than 50 students being enrolled in a Master of Commerce in Finance or Applied Finance each year.
As the decade went on, the remit of the Finance and Accounting disciplines continued to diverge, and with increasing staff and student numbers, the size of the Department swelled. A faculty restructure in 1999 prompted the creation of an interim Centre of Financial Studies, led by Professor Peter Lloyd.
Finance steps out on its own
By 2001, the Department of Finance was officially established. Professor Rob Brown was appointed as Head of the Department, deputised by the Faculty’s current Dean, Professor Paul Kofman, who also occupied a Chair.
Upon its foundation, Professor Brown wrote: “The Department of Finance is one of the very few academic departments in Australia that specialises solely in finance. This gives it a strong academic and industry focus.”
Associate Professor Sean Pinder had just arrived at the department in those earliest days.
“It was a bit of an exciting time, there was a very fresh outlook on what subjects we could take on,” he said.
Professor Brown was right about the industry focus. Finance had emerged as an academic discipline in such a short period of time, many of the students Sean was teaching were already working in the finance industry and were looking to add a strong educational foundation to their experiences.
“The Master of Applied Finance was really vibrant. It was a really popular program, with strong links to downtown,” he said.
“Almost all of my teaching seemed to be between 6.15 and 9.15pm,” Associate Professor Pinder says, referencing the attendances of students who studied after their day jobs.
Shifting mindsets of the present
Over the years since then, Finance has become a well-established major within the Bachelor of Commerce. Melbourne’s Accounting and Finance offerings are now ranked Number 1 in Australia by the QS World University Subject Rankings. The shift in attitude means the Department has had to learn to adapt to a bigger proportion of undergraduates looking to build their career in finance on day one. Despite this shift, Associate Professor Pinder says, current-day student are no more cynical or profit-minded than their counterparts 20 years ago.
“These students actually want to make a difference to the world, and if we’re not talking to that, then they’re not engaged.”
“They’re more aware of what’s going on outside in markets, and they want to know how what they’re doing in class is linked to what’s happening in the real world.”
At a time where financial literacy is paramount, the Finance department will no doubt continue to arm its students with the abilities required to succeed both inside and outside of the boardroom.
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