Before I took on the advancement portfolio officially in 2008, I did a six-month interim in 2004 while they were searching for the director for advancement. That was interesting because I went right smack without advancement experience then right smack into the stewardship of the biggest gift to SMU then. It was the stewardship of that landmark gift, $50-million gift from the Lee Foundation. It was then the largest private gift to a university [in Singapore]. With the government match of $150 million, it became a $200-million gift which makes it one of the biggest gifts internationally, I think, to a university. So we did a lot of things in term of stewardship. We actually produced a CNA [Channel NewsAsia] documentary on Lee Kong Chian. And so I had to go and interview his family members, friends who knew him then, and pull together the research together with the CNA producer which was also good because we were able to capture then on the website the life of this man, who has the foresight to set up the Lee Foundation and to support education in such a big way. Also part of that, not everybody's aware, it was also the first naming of a school in the local universities, because there wasn't any naming of a school then, so the Lee Kong Chian business school was the first school to be named in the local universities.
Traditionally most institutions will go to a bank and arrange a bilateral loan. Another way for institutions to tap financing is to basically go to the marketplace and issue a bond. We invited the bankers in and they look at our financial statements and they found that we are strong enough to be able to access the market. And that there is enough interest in the marketplace for people to want to invest in bonds issued by a university as long as it pays a reasonable yield. So the result to the bankers and they say, sure if you go out, there will be interest.
I guess the role of CFO has changed, not just for university but in general. Primarily also because of the changes in the marketplace. Traditionally, many CFOs are very much keeping the books, the financial books. But now, given what goes on in the marketplace the need to compete, the need to survive, the need to respond to negative market changes the CFO has to step up and help the business heads stay ahead of the curve. You have to stay ahead of the curve, to look out for what are the bad things that may come. So the CFO is one of the key people to do that because he has his hand on the financial pulse of the institution. You know, you don't want the institution to die from bleeding financially or to die from a heart attack because it can't take a market shock. So the CFO is very key. So now the CFO, apart from balancing the books, he's also a key risk manager for the institution, managing the business risk to make sure that we don't undertake businesses that have high financial commitment and high financial risks. And also to make sure that, financially, the institution is kept on a sustainable path that we don't over commit beyond our ability to sustain. So all these are incumbent upon the CFO's role nowadays. That you can no longer just sit back and account for the numbers. Now those numbers represents information to you. You should be interpreting those numbers and say what are those numbers telling you about the institution, about the financial health of the institution and therefore, how do we keep it going. That's the role of the CFO. And also, on top of that, with all I mean needs are always changing and growing how do I plan to meet those needs, sometimes with resources that you don't have? So you got to plan ahead. How am I going to find financing and funding to meet those needs as well? So, you are, in a sense, a key player in bringing in a key financial resource to keep the institution going. So it's a very vital role now.
Okay. You know it's a dream come true. And I told you when I first started I looked at all the wonderful facilities that we had in other career centers, career services in the U.S and other places. I said why can't we have this for our students? And back in my mind, (I see that) we have simulation labs, we have all sorts of labs. Why can't we simulate the corporate working environment? So as the students step up into that plate, the floor plate, they are stepping into a corporate working environment. They encounter the working environment before they actually go to the place of work. If I could simulate that, that would be great. And because we also have people coming in from overseas to interview, and even now employers come to SMU to use our interview rooms (it had to be of a corporate standard). So, why can't I have that? And the interview is typically, you know, one or two of them (employers), with the student. Do I need a huge meeting room for two or three people? Why can't I better use that asset? Can I have smaller rooms? Could I have smaller syndicate rooms? Can I have technology that's so wired that should New York want to interview my student, yes it can be done with today's technology. Yes, it can be done but they need a conducive environment and they need a (good) place. So, all these things were working in my mind. Some people have asked me When do you want these things done? What can we do for you? But nothing came out of it. Okay we will work (and make do) with the (given) office space.
One day, Joan Toh, one of the ladies with the Office of Advancement [(then) - came to my office and said], Ruth, let me introduce you to Dato Kho Hui Meng. It came out of the blue, I was totally unprepared. He asked me, What is your dream? Tell me your dream. I want to do something for the students. I told him my dream, Go ahead. Give me a proposal. Do it. Wow, I had the opportunity to dream and to make it come true. So you know, we put in facilities for training, we put in facilities for smaller meeting rooms, we wired it with the technology, we created the space for networking and we created the whole corporate environment. So when you step up into the 7th floor, the atmosphere changes. And that's what we want for the students. So I stayed back to help finish that dream , working with the contractors, the designers (and put) everything (in place) - small little details like the wiring, and the facilities and all that. And also the (revamped) Finishing Touch.
Whether you are a business or you are a not-for-profit business, the only way to sustain it is financial resources. Without financial resources, you can't do anything, so that is fundamental to all entities. And, like I say for businesses, it's in the sense different to the extent that they have the ability to offer services and products that the marketplace is willing to pay, and therefore, that's where they make their money. But in the case of a university and the model that we run here it is subsidised business and that's quite typical of most publicly funded universities, they are heavily subsidised so you are heavily dependent on the Government to sustain it and what you can charge the students is only a portion of the cost of teaching them. So, how do you balance that? Now the Government doesn't write you a blank check. So, the need to again balance the needs of the university with the financial resources to keep it is the same as any other business, so it's the same. In fact, more challenging. I'd say our ability to generate revenue, like other businesses do, is more limited because of that subsidy component. We cannot charge as we please because there's a public service aspect to it. And so it's a fine, limited capacity that we can use to bring in the extra resources. So really, we got to run the university as a very tight ship and make sure that we don't go off-course financially.
One, was the admission process, the process and the quality of student admission. Secondly, was the design of the programmes that we were going to run. A third one, was simply physical capacity, where was the university located now. There was a debate, I remember, over whether we should indeed stay at Bukit Timah. It became a very comfortable venue. We spent all this money it would have seemed in bringing it up standard and here we were about to move out. There was quite a movement around to stay at Bukit Timah and then should we go to site A or B or C. This one wasn’t the only site that was on offer, so that was part of the discussion.
But the area that I paid most attention to—I guess it is why in large part I’ve been brought onto to the board—was the international dimension of the university, how would it reach. If you’re a young institution, how do you get the attention from the revered institutions overseas? If you are so young, one of the answers is, be young in Singapore because you’ve got the cache of Singapore on your calling card when you try to open the doors.
The other thing I was interested in was governance structures and management systems. How do you arrange for people to be appointed to the university pay scales, remuneration arrangements? I was particularly keen to see a system of performance review which was transparent and well-understood so that remuneration adjustment would reflect contribution to the university and scholarly performance. It wouldn’t be a type of public service formulaic increase as the years roll by.
The other area that I was involved in was the development of the committee structure within the university. I then went particularly to the financial remuneration committee, designed its charter—the way in which it worked its way through the year, and the events that had remuneration on the one hand, budgeting on the other. I guess in the other ways, I was involved in strategy, workshops. I led the first strategy work day that the university had and then got involved in various other projects as they came along, but primarily FinRem [Finance and Remuneration Committee] was my home base within the board.
The few years when I was heading up both corporate communications and advancement and alumni, even though it was officially two portfolios, it was actually three portfolios. Because advancement and alumni then, alumni wasn't really contributing to advancement. At most universities, they have alumni and advancement together because most of your donors are your alumni. But in our case, that's not the case at all. So in fact, alumni was a whole different portfolio to engage our alumni, to nurture that bond that our alumni has with the university. So it was really three portfolios. But there's a bit of synergy in the sense that the branding, the telling of the SMU stories to the media, we have to package it in even more sophisticated form to the donor. It was really, again, telling the SMU story and convincing them that this is the place that is worthy of their support.
Yes. That’s true, I was the one who set it up so I was the so-called founding chairperson of the IRB institutional review board, which really means the ethics board for looking at research involving human participants. For people in psychology it’s a no-brainer, it is something that you need to do because in all research, you need to protect the welfare of the human participants. In fact, in most journals in psychology, they would want to make sure that you declare that you have cleared your ethics board, or the IRB, before you do your data collection. So for psychology it’s a must, for psychologist it’s a must, and behavioural scientists in general. And in the case of in NUS, I was from the department of psychology, obviously, we had our own ethics board and we were doing that. So when I came to SMU and not only me doing research, and my psychologists were all doing work, and then I looked around and I realized that there is no institutional review board. Now you can’t blame the university, there were basically no senior social scientist to ensure that that gets done. Immediately, it’s obvious that you need to get that moving as fast as possible. So when I was tasked with heading the Office of Research, that was probably one of the, in fact it may have been the earliest initiative, that I said we need to do this. So I went ahead and set it up, according to certain international rules and guidelines on how you compose the board, so that all research involving data collection where human subjects are providing data, will have to go through the ethics board. Fortunately, the university is small, not every research involved human participants, we did not have tons of applications. So we were able, the new members, who were not as familiar, were able to learn along the way and we were able to do the turnaround very fast. So when somebody submitted an application, literally within days we were able to get back with decisions to revise and resubmit or the approval of the project. In most universities, you take up to months doing that. So faculty researchers took relatively short time to get used to it, and did not see it as an obstacle to research but as a necessary thing to do to protect human participants, as well as actually protect the faculty, the researcher. Why? Because when there’s a question about the ethics, proprietary and the adequateness of the procedure, and if you follow what the approved procedures, the university is able to stand behind you and back you up on the research.
The first thing which I mentioned earlier was, we decided upon, after consultation with the students’ association, a fixed fee arrangement so that when a first-year student enters he or she knows what the fees will be for the whole time for the degree. So there are no changes while a student.
The second thing was to develop a comprehensive financial assistance plan that would be available to all students who had any kind of financial need. We have some students who win scholarships competitively and those are often generous, they’re usually endowed by some endowment. And those students are well taken care of. But there are many, many other students who will either have continuing needs, or short-term needs, or perhaps need some assistance in going overseas for a study term or some other programme. And what we try to do is make it easy for people to gain access to these kinds of funds by giving out a lot of information to both students and parents about their availability, whether they’re loans or student jobs in the university—students work as research assistants, teaching assistants, library assistants and so forth—or whether they’re straightforward bursaries. We also have some scholarships which are purely merit-based and some which are merit-plus-need. And I think there’s plenty of room to develop in Singapore something that’s done more commonly in some other places where there may be a prestigious scholarship or something, but the amount of it is based somewhat on the need. So a student may have the honour of being called the XYZ scholar and put that on his CV [Curriculum Vitae] and so forth and so on, but if he comes from a very wealthy family, the stipend might be quite small, whereas another student who comes from a family of very modest means might get a larger stipend as part of it, rather than the same for everybody.
Low Aik Meng, who is dean of students, was in charge of developing these programmes, and together with Alan Goh, the director of admissions, they did something about five years ago now which was incredibly effective. This was when there was a lot of publicity going on about fees for universities, and SMU’s more expensive than NUS and NTU. So in one of the regular ads that Alan puts in the newspaper and other places during the admissions season, he put a straightforward statement about financial aid, and how to do it, how to get it, what it’s for—step one, two, three, four, and here we can make this available to you. Nothing complicated, no barriers. And he also sent a letter with all that information to the parents of all applicants and potential applicants. And it was very effective because it just gave people a little blueprint about the options which are available. And in fact we can safely say that no student has been prevented from getting an SMU education by reason of financial need. We try to reach out when we’ve known and somebody hasn’t asked, we’ve gone to them and tried to do things for them.
SMU has a broad spectrum of financial assistance schemes for students. In particular, Singapore students who qualified for admission can be assured that they will not be denied an SMU education because of fees. The schemes comprise loans, grants, bursaries, awards, and scholarships. Students who prefer to earn to fund their studies can also take advantage of the Work Study Grant by working with SMU schools and offices. This grant has both a work and financial assistance element. Recently, an education loan was introduced to assist local and international students to cope with fee increases. To encourage more Singapore students to seek global exposure and to broaden their mindsets, the Government and SMU co-fund an Overseas Student Program Loan. Students can utilize the loan scheme for up to $11,500 for overseas trips sanctioned by SMU such as exchange programs, BSM, internships, and community service. There is also a conference grant for students who wish to present papers at academic conferences. For students facing serious financial difficulties, there is a Student Life Financial Grant available for them. We also recently introduced an Overseas Entrepreneurship Attachment Grant which provides funds to enable students who wish to eventually start their own companies to intern with an overseas start-up venture. In line with SMU’s emphasis on a holistic education, scholarships and awards are given to students based on a list of criteria. Besides GPA [Grade Point Average], these include active involvement in CCAs, contributions to the university, undertaking leadership roles in clubs or in organizing major university events, and contributing to the community at large.
Now our 2010 valedictorian is Russell Tan. He was selected because of his very active involvement in student life. He was the president of the SSU which is the SMU Sports Union. Tan Lay Khim was selected as salutatorian because she was very active, being one of the founders of the SMU’s Advisory and Assurance Team which audits the student clubs for SMU. So, we use a holistic measure when we actually award winners.
It impacted in two ways. It impacted donors. They became more careful about giving because their own financial positions are also affected. It impacted us in terms of our investment portfolio. Of course, global stock markets, financial markets were all going down, so our portfolio was negatively impacted like everybody else. We want to thank our investment committee for their wisdom and their perseverance. They believe that what we have invested are the right things. Let's just hang in there and ride through this big storm. And true enough, one year after that, the market turned and we got back everything, literally everything that we lost. So it was a wise thing to do. Had we cashed out, we would have missed the rise, so we must thank the investment committee for that wisdom.
When SMU started, I was holding two portfolios. I was Director of Student Life as well as Director of Career Planning. It was called Office of Career Planning, OCPP, Placement and Planning. So I said, Alright, perhaps we should change it to career services so that it's not just Placement and Planning but Career Services. At that point in time, not many people knew about SMU. We had quickly set up a two-story building, and taxi drivers brought our potential employers to SIM at Clementi and they would call, Oh Ruth, we are at Clementi. Where should we go? So we said, No To start with we've got nothing to show the employers. How do we then sell our product that they were good enough for the market place? So we went around to all the employers. (Our) skin was very thick, the shoes wore out; we knocked at their doors, we spoke to the employers, tell us what you like and what you don't like about the people that you hired. And what kind of people can we train to meet your needs? So then they gave us a slew of things that they didn't like and could you do this? Could you change this? Could you change mindsets? Could you give us people we could use? And who can be put on the job and they can run? So that got us thinking. I think one of the great assets that we had then was that we didn't have any baggage. We just looked at (what the) market needs, and if the market needed that, then how do we get our people, our products, to meet the needs of the market. So we then started with Finishing Touch.So I (spoke with) the best student, who had a 4.3 GPA, and said, Alright, show me your CV, your resume. Then okay, this was before we polished it up. And then I said, Alright, let me help you write a better CV that will bring out who you are, what you are capable of and the qualities that employers would want to look at. So I polished up his CV; of course working with him, not just editing for him, and then I brought this to senior management. I said, Look. This was your best student's CV, he had gone for some career planning, some training, and this was (his CV) before and this (CV) was after we polished it. Tell me, do they need this (finishing Touch Module)? No quarrels after that. Yes, they need it. So we started Finishing Touch.
But when I created the accounting system and the planning system, at the back of my mind was to make it such that it helps us understand the business dynamics of SMU, more so than just trying to say this is the money we have, how do we spread it. It must be looked upon from a business perspective, so all the things that I set up was similar to a business model with revenue streams, with cost and what is the bottom line. And how do we balance the budget? Again, not just as one entity, but with all its subcomponents because we have different schools. Different schools have different needs. Different schools have different dynamics. So, again we have to be able to look at things that way. So I, in a sense, set up the system all to enable us to look at it and not just as one university and one pot of money to spread around. So, I guess, that's where I wanted to look at it very differently and so that's where I want to be different.
I created a [cost] centre, responsible for running the services that you are set up for and responsible for managing the financial resources that we are allocating to you to offer those services. That created a bit of apprehension on many because they were never held that way, to be accountable for not just what you are doing, but to manage the resources that I allocate to you. So that was quite a bit of change for many. They were very apprehensive. I guess for the obvious fact that, what if I don't have enough money to do the things that I need to do. I say, No, you are responsible, so you manage.� Of course, you have to justify your needs every year, based on what is expected of you, and we will allocate what we think we can allocate to you. So, that was one part of the journey that we went through. But after a couple of years, people got comfortable, and it worked wonderfully later on because then truly accountability and responsibility are now aligned.
Different schools have different capabilities in terms of the ability to offer programs that they can use to generate additional income to support the school. From business school, to say social sciences, they are all very different. And if we look at our portfolio of programs today, clearly business school can offer a lot more. And, therefore, they have that ability to use those programs to bring in additional revenue to support the school. But I would say if we look at social science today, that capability is much less compared to business school. That difference will have impact in terms of the financial outcome of each school. Some may end up generating surplus within the school. Some may always be in a perpetual deficit situation and we recognise that. But we cannot say -- let's get rid of the loss leaders because in the way we have structured it, they are all interdependent.
SMU, Singapore Management University, is a private limited company incorporated under the laws of Singapore as a non-profit private limited company with an independent board of trustees. We have a contract with the Ministry of Education for funding. That contract is in the form of a performance agreement where we agree that we will accomplish certain things. Some of them are very straightforward. We’ll be of a certain size, we’ll take students et cetera. Some of them very specific these are redone every five years. Some are permanent performance issues; some are five-year performance things. And in return for our agreeing to do those things, we get finding from the Government, both capitation grants for undergraduate students and research funding for faculty research and then a separate set of funds for postgraduate students who are doing PhDs.
No other country in the world has that form of organisation for universities. And in the case of SMU it was purely an experiment to see how this would work. It worked so well for us that in 2006, both NUS and NTU were reorganised into the same legal structure. And SUTD, the fourth university, same way. So all four universities are now legally the same kinds of entities. And again, there’s no other place in the world with that kind of structure. If you’re a state university in the United States, you are a public body; you’re not a private one.
I spent a big part in the 80s and up to the mid-90s, with the same bank for twenty years and being the Chief Financial Officer. So, in that role, there is the helping the businesses understand their financial performance, their financial results, their financial planning. Subsequently, I was headhunted to join a real estate company as their CFO. It is a family-owned company that has a portfolio of properties. They are basically developers. They own a portfolio of real, top quality properties from hotels to condominiums to shopping malls, the whole range. I was with them for three and a half years when I got a call again that there is this start-up university that is looking for finance person, would I be interested. So, in the sense, in terms of my own journey in my career, it fitted in because when I started out, my wish was that, ultimately, I would like to end up working for a Singaporean entity either it is family, or a local company. So that kind of fitted in quite well and at that time now this is just before 2000 these were the days of the start-ups. Everybody was talking about starting up something. And the Internet world was just growing, so that was something interesting to me. A few things appealed to me one was the start-up, secondly was it is a university. Two, the other thing, is that it is something that impacts the next generation. So I say, Fantastic, it appeals to my own career goal. So, I responded and I met up with Janice [Janice Bellace] in the interview and I got a job as Director of Finance.
I started in corporate communication, PR [public relations], corporate affairs before moving into arts management at a little art center, The Substation, and then moving on to Cirque du Soleil, the French-Canadian circus, before coming to SMU. So it's rather a different sort of background from an educational career. And I have been more than ten years with SMU now.
Before I came to SMU, I was working with the Peoples Association, and that's a community development organization. And I guess that is an association to garner people to come together, to work as a community, to bring back that kampong spirit and to serve the needs of the community. So I worked with the advisors to our grassroots organizations. And I've worked with the organization that has the Prime Minister as the Chairperson. And we meet rather regularly, every quarter for our board meetings. And there would be times when the Prime Minister would come and chair the meetings but most of the time it was chaired by the Deputy Chairman. He sets the direction and he is a Minister, usually the Minister. So I have served under at least 4 Ministers, and worked very closely with some of the politicians as well. So that was my life before I came to SMU.
I spent most of my life, well, spent most of my adult working life in universities, but in and out of universities. I did a PhD in the US at the University of Illinois, labour economics, economics of education. From the University of Illinois, I went to Cornell [University], was on the faculty there for four years or so. Then my wife and I decided to come back to Australia to the ANU [Australian National University] for a year or two, and then I got a full chair at the University of New South Wales.
I was the foundation professor of industrial relations which was a major public policy area in the 1970s. I moved on up through the university ladders and spent some time as the head of the School of Economics, dean of the Faculty of Commerce and then on to vice-chancellorship. But along the way I took time out; I did a lot of consulting work in organisational change at the workplace level.
I was particularly interested in enterprise bargaining, collective bargaining, which was quite a foreign concept in Australia, but is now essentially the standard approach. I spent a period away from the university on leave to head up the Environment Protection Authority. And I went in and out of various other things. Along the way, I spent time as the head of the academic trade union in Australia. Then I spent time as the head of the vice-chancellors in Australia, so I have been on both sides of that particular equation. I came along to SMU as you say in about 2000, I think it was.
Universities are not-for-profit and for public service and also subsidised so, like I say, you need various sources of funding to come in. Tuition fee, government funding is one. Of course, quite typically I think in most universities, maybe the US universities are pioneers in this, created something called the endowment which basically is a kind of capital that the university raises, but from private donors. And they are there for the university as a financial resource not to spend, but to invest and from there, generate income to support the university. So that's the whole concept of the endowment. And when SMU was started, the Government was the first party to contribute to the endowment. They gave us a seed grant, fifty million dollars, so that was the first cheque we got. And at that time to help us build that endowment, they also committed a three dollar-to-one match, which is very generous. So if a donor gives a dollar, they match three dollars and that's how we built up our endowment to what it is today. So it is also good in the sense that for the fact that you can't spend the money. The university has to first manage it. Secondly, be very disciplined about not spending it. So it also builds financial responsibility on the university part. You cannot spend that money away. You are supposed to invest it so you earn and you are also not supposed to, hopefully, lose it away to your investments, so that's the discipline that it puts on us. So with that we have this now another resource that we can use to generate funding for the university and it is a wonderful good for the university.
Yes, I was managing finance and along the way came many things. That role turned more from finance to administration. All the facilities-related things, whether new one or running existing ones, all came to me. As in all organisations, there are basically in today's term, four key resources money, humans, facilities, IT. The other parts of my portfolio, investment side is basically looking after the endowment fund, so that is directly impacted by the financial markets so something to watch daily. Ok, that again is another stage of the SMU journey. Having been around for thirteen, fourteen years, we have been very busy building. We are just building to meet the growing need. It therefore comes as a time now for us to take a look at ourselves. Are there areas that we need to improve? Are there areas that we need to innovate? So that's the reason for establishing this capability - Business Productivity Improvement. But it is not just about process improvement, it's also about innovation, because competition is getting more intense. What SMU has created is fast being adopted by our competitors and you can't stand still because they will soon catch up and they may surpass you. So we have to continue to innovate to stay ahead and that's what we always wanted SMU to do, to stay ahead and not be always catching up. So the innovation part is also the intent of this journey.
So the improvement part is, ok, how can we improve so that our services are more pleasant, more desirable from our customers' point of view, our students, our faculty, our other stakeholders? So how to sharpen that? How can we do things more efficiently, more cost effectively so that, like I said, in one sense, we can cut waste and redeploy those resources for other purposes, so that's the other intent as well. And, like I say, because we embark on responsibility centre accounting, people are saying, It cost me too much to buy your services. Is there a better way for you to deliver your services? So business process improvement is one way to help all the heads of departments and schools look at their services and say where can I improve? So that I can provide a better service, a faster service at a cheaper cost. So, those are all the intent. So, in one sense, it is also right time for us to do some housekeeping and say, how can we do better and cut some of the waste. How can we improve our services, how can we offer new things? As a result of eliminating waste, we can have capacity to do new things. So that's the other intent of this part.
I think given that it was such a young institution with very young alumni, I have seen quite amazing support from the community for SMU. Every gift, whether it is big or small, I think it is an endorsement on what we've done right. People don't have to give [to us, you know, they are not alumni; very few are parents and or have done things with the university. They just give because of the appeal of the SMU story. A lot of times they like what we are doing. They can see the difference that we're creating. And that's why they want to support us. Also, I believe that being small and nimble, we were able to kind of match the donor interest with the needs of the university. So that helps a lot in bringing people on board and helping them find what is meaningful to them and what the university needs to do that initiative, to proceed with the initiative. We were also very conscious because these people sometimes have very little to do with the university you know, no relationship whatsoever with the university we were very conscious in term of when we have them on board as a donor to protect that relationship, to grow that relationship as a long-term relationship. I highly emphasized with the team stewardship and accountability to the donor. And in that way, even in our short history, we were able to have repeat donors, donors who have given and then come back to give a bigger gift. Or donors who were kind enough to introduce people to us. So we had a lot of referral donors. I'm really quite touched by people who have supported the university.
Well, on finance, it was to oversee the budget, to ask the questions. The key question to me was: How can we make the budgeting process a strategic exercise? How can you design all of the boxes and cells and levers and buttons, and all the rest that goes on in the budget process? How can you design that so that it serves the strategic goals of the university? And I think we’re still working at that.
Also on the finance side, universities never have enough money. It’s always a question of how do you get more? SMU had a slightly different issue. We had significant resourcing; the funding in the early years was a multiple of what we knew it was going to be when we reached steady state. It was a premium applied, four at one stage, three and then two. So what the university was doing was building up a reserve through forward funding, through front-end funding, which we could use to plan with assurance. But then we knew that when we got to a certain stage, we’d drop down to the same level of funding as the other two universities.
It also looked at the extent to which budgets would be in shortfall for funding coming in from the Government and from fees, and therefore how much we needed to be focusing on fund-raising endowment, international students and international student fees perhaps, and increasingly now the types of revenue generating activities that the universities engage in, such as executive education and outreach programmes. So that was the finance side.
So the reputational risk of a university is important. Therefore, from a CFO's perspective, it's to make sure that any new thing that we embark on whether it is a new program, a new degree, a new school, a new research centre that we undertake we are able to deliver something of quality and that the financial commitment is sustainable. That we don't end up going bankrupt because we start something that is, you know, going to drain, so that's one part. Of course, reputational risk as well, to make sure that programs don't suddenly go into financial trouble, you know. Or we have grants or gifts from donors to start a research centre, we don't run the research centre into financial trouble.
The provost is the Chief Academic Officer. The Provost is responsible for working with the President and shaping the academic strategy of the university. At the same time, if you want to look at it, if our business is education, one way to explain it to the lay community is that the Provost is the Chief Operating Officer for the education initiative. And so, I work with the Deans and the Deans report to the Provost Office. And the Provost works with the Deans to develop academic strategy, to work on the resource requirements, to make sure things get done sometimes, particularly at a place like SMU; we require collaboration across the schools. If we have, for example, there could be a major in Information Systems with a minor in Marketing, and that requires collaboration within schools. So it's not that the Deans can do that independently. So we need a mechanism by which we can facilitate that and that's another role that the Provost plays to help the schools achieve what they would like to achieve. So by and large, think of it as a Chief Academic Officer and a Chief Operating Officer.
Everything from system to money, these two were the major things. They were running the books on a spread sheet, and we were recruiting people. The payroll was building up; all kinds of costs were building up. To maintain that on a spread sheet is going to be not sustainable. So we have to look at building the system. That is where we embarked on implementing the SAP [business management software] system to take care of the administration of the university. So that was one. The other big problem like I shared earlier is MOE funding. They gave us a start-up but that is only to last for a couple of years but we are going like that. So how do we meet that need was another stage that we had to plan. And that is where we started looking at the long-term need of the university, not just at the start-up phase. Having started, how are we going to grow this institution? What kind of resources must we bring to bear to keep that growth? So we embarked on looking at five, ten, even twenty years. And given the model that we were embracing, the US-style of business education, it was a model that it was, in the sense, [The funding] beyond what was needed to fund the other two universities, NUS and NTU. So we realised that there will be a gap going forward and that is where we started the discussion with MOE in terms of what we really need to sustain SMU long term. That was the other challenge. So we [MOE] recognise that, so we are prepared to give you what we call premium funding compared to the other two universities for a few years to let you ramp up the university. So, to a large extent, MOE was very supportive and I would also say been very generous in giving SMU the kind of financial support that we needed. So we had a head start of about eight years with that extra funding to keep us going.
Yes. I recall the first project was really the advertising campaign for SMU and thankfully that turned out to be hugely successful the jumping student ad and the SMU, we're different tagline. It was really the first time that a local tertiary institution has such a branding effort. Because before that, most of the advertisements were informational. I mean, they were listing the courses and all that, and nobody did, you know, sort of a huge picture of a student jumping and tagline like what we had done.
And that success of the campaign really was also because we were able to do a parallel media campaign. We were pitching stories of the students of SMU, at least two stories a week, pushing out a lot of media stories along with the branding ads. We were inviting the media to come and experience, attend classes, and experience, you know, the SMU difference, the small classrooms, and that was really how that whole campaign, I think, resonated with the community. The messaging in terms of the different pedagogy, the flexibility in the curriculum, the broad-based approach, us producing more creative, confident, articulate students. I think that really hit the right note with the community, whether it was the employers, potential employers, the parents, the potential students. They were all excited to see something so different then.
Well, some priorities were my own; some priorities were given to me. So for example, one priority was to get the AACSB accreditation. Another priority was to launch the executive MBA program which wasn't there at that time, and also the Post Graduate programs. My personal priority was that you cannot do any of these things till you hire the right faculty. And admittedly that was also the priority from the board to see if SMU could ramp up the rate and you can't just ramp up the rate, you need to ramp up the quality as well. And so you know, hiring of faculty, you also have to make sure that the environment is there when you hire young faculty to make sure that there are adequate processes and resources for faculty development because it costs a lot of money to train the faculty and you don't want to lose them when they are almost ready but not quite ready for tenure. So we have to make sure that we not only hire the right people but we are able to bring them to the level where, you know, we can keep them. And so acquisition and retention of faculty was the key priority. Then it was also important to begin to start linking with other universities. My personal background is in marketing and within marketing, brand management. And so one way, in which we build the brand is to build awareness about SMU, but also to build up quality, but that quality is signaled by the quality of academic institutions you are partnered with. And so it was important to also partner with and learn from but also contribute towards because if you are going to partner with somebody, they want something in return. So it was really thinking through the strategy of how we are going to ramp up our Post Graduate Program, ramp up our reputation, while, at the same time, not losing sight of the Undergraduate Program, which was then about 98% of the enrolment, and it is still, 89-90% of the, I mean, the Undergraduate Program is still our core business but it was building sort of a superstructure on the foundation that was already laid by the very strong Undergraduate Program.
Very good, I was really, you know, glad in some way. I think maybe senior management know that when I get bored, I start looking around about, whether I should be doing something else. And many of us do get headhunted and get approached by executive search firms and many universities are actually looking for deans and, you know, they will come knocking. So when Arnoud came on board in, you know, couple of, a year and a half back, he was going like, You know, Annie I think you've done exec ed for a long time, and on top of exec ed you've been doing many other things which looks very much like business development. But we have never properly recognised all your other things which you are doing new initiatives, new curriculum which gets parked under the school and nobody attributed it to you because they only know of you as the executive education dean. So why don't we formalise all these many things that you do, all the different touch points and give you an Office of Business Development and External Relations. So I actually scratched my head because what exactly is this role, you know. Because it didn't seem to come with it, a specific job description. So I asked Arnoud, Is it possible for some of the institutes that I have started to come under me?� Because I do need to look after them because my sponsors have actually told me in no uncertain words that they will not be there if I'm not there.
So ITI is very precious because we do need that twenty-three sponsors, it's a donor model. So, if the donations don't come in, there will be no ITC, so we needed to make sure that ITI has support. So Arnoud was very kind, he says, That is exactly business development and lots of external relations, so fine, that goes under you. So, I have the ITI under me, I have Financial Training Institute, which is a government-funded, competency-based training programs for finance and banking professionals. So that's also a six-year entity and it was started by me with MAS funding and it's now self-sustainable with a lot of back-end funding for the competency-stamped accredited courses, so that comes under me. So these two are older institutes that I've built. UOB-SMU Entrepreneurship Institute rightly should go under Provost because we needed to use students for projects. Although it was started by me, I decided that I have to relinquish that, so I agreed that goes under the provost office.
And last baby that we are going to be so excited about is my Business Families Institute. Chairman's family is part of my founding family, so we have gathered a total of fifteen business families to be founding and alliance family members. They are going to help shape us in terms of what they need. We will be doing research, we will be writing cases and we hope eventually to have a family business concentration, but not called family business, because then it will be parked under business school. It will be called Business Family Concentration and we'll park it under social science school, because what matters is the family unit.
We are now coming back one full circle, Pat. The country is going back to the family as the basic structural unit. We are coming back to talking about values and values cannot be outsourced. Values are best inculcated, learnt in a family and many business families can do wonders if they get their values right. Because not only do they build the business as a family, they can contribute back to society and community if they get that value right. So, if we have a program that can teach people what it means to build a strong, sustainable business family and teach our students what it's like to become a professional manager working in a business family, I would have built another niche that no other business community will look for their talent. We will have social science students with sociology major understanding the world of business. Isn't this exciting?
Never give anyone a business development title if they have not been in the business long enough. Business development is not marketing. Business development is not sales. Business development is knowing how to find an opportunity and knowing how to find internal and external partners to monetize that opportunity and turn an idea into a reality. And it has to come with many stakeholders, so I actually loved this title because not everybody can do business development.
I like to believe that we are financially strong where we are now, in terms of what we have generated and built up over the years. So today, in fact on the 15th of April, we were able to report to the investment committee that the endowment fund and the invested surplus crossed the billion dollar mark. It's more than a billion dollar Singapore now on April 15th. After thirteen years, we are quite happy with that outcome. It's a valuable resource, we need to watch it carefully, manage it properly. And I think if we continue to do that we'll be in a financially strong position to be able to do the things that we need to do to build up the university.
I think the Board of Trustees has been one of the really important design features of SMU. Its role is essentially to bring wider experience and wisdom. It helps with checks and balances. It helps, I imagine, with status positioning of the university. It’s very hard to get a new university into the consciousness of the international community. You can’t really do it by running advertisements in The Economist, there are thousands of universities that do that. There has got to be a way of lifting the visibility, but also creating a cache for that institution that lets people see very quickly that you’re a serious-minded institution and endeavour.
The key responsibility for Academic Affairs Committee was to determine the nature of the gold standard at SMU. Were we going to be twenty-two carat gold or eighteen carat gold or...? Every university is gold, but there’s gold and there’s gold. And I had seen in another institution how easy it is to for the standards to drift down, rather than to build up, and to meet an aspiration that you set. So that we would not offer tenure to people coming in straight away. There are some who warranted it who would be offered tenure. But one of the things you find with a new institution is the senior leaders of that institution seek to recruit into it.
The other thing that came through—this reflects Janice’s background, I think this is one of the real contributions that she brought in the early years of the Academic Affairs Committee—was to recognise that really, there is a research-stream academic and there is an education or teaching-stream academic, adjunct or teaching or education, whatever you call it over here. But there was a research and tenure track, and if SMU was to be a research university then you needed the two tracks, which is not a common arrangement. It may have been fairly common at University of Pennsylvania, I’m not sure, but it certainly is not common in other universities because there the academic argument is well, an academic is an academic, you teach and you research, and you teach and you research, and you can’t split it out. But, in fact, you can, with honour and dignity for both sides of that equation. It’s not as though the researcher doesn’t teach and teaching is important. It’s not as though the good teacher doesn’t do research as well. It’s just that you’ve got different standards and a whole lot of other different arrangements. That’s the second thing I think that the Academic Affairs Committee delivered to SMU. We’ve had to tweak it at about Year 10 but it’s still essentially that model.
It is an external body of wise people who have standing in the eyes of the Government. And I have to say, whose academic and other profile also commends themselves, as a general rule, to the university environment. And that body comes in to run a ruler over the institution. In a way, it is the institutional level equivalent of the professional accreditation bodies that I used to deal with when I was president. I’d carve out a whole week when the medical schools accreditation visiting group was coming to town. The same with each of the three main areas of engineering. Any areas that require accreditation, the president really does need to give attention to. This is not exactly accreditation, but it is a group of people making observation and comments, often in a very gentle way. But it is a case of where someone treads softly, and speaks even more softly, you pay even more attention. I think it is an honourable process, it is a good thing.
I think it is important that the university is not expected to necessarily adopt every single recommendation that is made by QAFU, and I think QAFU needs to understand that. As I mentioned, that as long as eighty percent or ninety percent of the recommendations are adopted then, that’s fine. But it serves that purpose of making you think about how you’re doing things and it's a group of people who deserve to be taken seriously. Of course, the other aspect is they speak to Government and Government being the significant funder of the university is entitled to be informed, from time to time, on how its investment is going.
It looks at international and strategy and the university in a wider sense. QAFU looks at the operations of the university in a more functional sense. I think probably a couple of the comments I was making about QAFU really drifted into a mental set on the international panel. But the QAFU, it fits into a model that you find in most universities, I think in Australia it’s even called QAFU, again in Hong Kong, a similar operation in the UK. QAFU is looking at the quality of what is it that the university is doing. The international panel—which is a bit more unique to Singapore, I don’t see that in other universities so much—I think it has a wider view, its membership comes from a wider area across the academic globe. But in principle, they’re both doing the same thing—it’s an external body that is providing input in the interest of quality and good development for the university.
One of the reasons you probably need a longer tenure track at a new university is that we have fewer senior mentors for the younger faculty coming along. When I was at Cornell, there would have been a dozen of my colleagues up and down the corridors who were as grey then as I look now. I could easily turn up and you would get assistance. One of the things I found out about mentoring is that the individual mentee needs to have a choice. It’s much better to have twelve people out there who could possibly do it, but to focus on the two or three you would feel most comfortable with. If there is only one or two—well, the mentee has to take what is offered, I suppose. And even the best one in the world, some of the relationships won’t be as positive as they could be. So that’s one of the challenges of SMU and I think that’s one of the reasons that the tenure clock was extended.
First, was to help management and the board decide how should we manage tuition fee. When we look at the long-term financial need of the university, we only recognise theres a gap and therefore, tuition fee is one of the sources to fill the gap. So we had to look at it, how do we manage tuition fee over time as a resource to provide our financial need? So, with the long-term projection, projecting the gap, the board was engaged in terms of looking at what kind of increase should we be looking at over time to bring in the resources? So, that was one, the long-term outlook. Then, of course, each year when we look at the tuition fee for each year, what should the real increase be, is the other discussion. But, of course, that discussion is not just let's increase it ten percent as you like, because there is market and public consideration. So there are other information that you need to understand, while from a financial perspective you know that you need to go at a certain rate, but there is market reality that you must consider. So all these have to come into play to decide how do we want to manage tuition fee. The other thing that we had to do was this how do you make tuition fee increase as painless as possible? Ten years ago, the board was engaged in a discussion and I presented a paper, how should we package our tuition fee? Because in the past, tuition fee [increase] is a yearly thing. Your fee is only valid for this year. A student, sign up for U [university] for four years and they [only] know this year I pay so much, they have no clue what, in subsequent years, they are going to be paying. So there will be anxiety, both on their part and the parent's part. And that's when we looked at what we call a fixed-fee model? Meaning when you come to SMU, you know precisely how much you have to pay from the day you join to the day you graduate. So that removes uncertainty and that helps them to plan what kind of commitment to make. So that's how we started the fixed-fee model a few years back. And each year when we say the fee is so much, the students know that they will only pay this fee for the whole duration they are here. And that actually was very much welcomed by parents and students. And to a large extent, because we did it, the other two, the other institutions are all doing the same thing. And I think it's fair. I mean, if I'm buying something, I want to know the actual price and not a price that is subject to change, so it's a fair model.
There was a considerable amount of push back from current students and concern from the admissions office in particular about prospective students and how this would play in the heartlands and everywhere. And without going through all the details, I’ll say that this was an instance in which student government in particular was extremely important. There were some leaders of the student association who were very mature, thoughtful, young men and women. Ford Lai was then the president of student government and there were several others involved. And they came forward with two or three proposals about the way this could be implemented over some period of time that would not be so disruptive. And they were very good ones, and they were consistent; one of them was consistent with what we’d done at Emory, which was to have a flat tuition for an entering class. So if you came in the first year and your fees were X dollars, they would be X the whole time you were a student. For the ones who came after, they might be X plus N but you knew exactly what it was going to be.
And what we did was in a sense grandfather in existing students, and then implement the 15 percent increase in stages over time, and also introduce the flat fee notion so that a freshman would know my fees are four times X and that’s not going to change. That’s remained constant over time. And we really can credit the students’ association for being deeply involved in that, and it established as a result what has since turned in to be an excellent working relationship between the students’ association and the administration through successive student leaders. So it was very positive in the long run, [although] it was a little painful at the time.