The yin-yang symbol is on the cover page of Robert Bushman’s teaching notes for his accounting class. A circle divided in two halves by a curved line, it expresses the Chinese philosophical principle of dynamic balance between interdependent opposites.
Dynamic balance also underpins the fundamental equation of accounting: assets = liabilities + shareholders’ equity. This means that assets are balanced against economic claims on those assets by creditors and owners.
Taoist internal energy arts and accounting are Bushman’s two principal passions. “I don’t want to sound mystical, but this emphasis on fundamental balance in both domains really resonates with me,” says Bushman, Forensic Accounting Distinguished Professor at UNC Kenan-Flagler Business School.
As a college student in the early 1970s, without a major, he hit his calling in life by taking classes at random. “It was a very crazy time, a couple years earlier we had the big anti-Vietnam war riots at U.S. universities,” says Bushman. “There was a lot of wild experimentation going on.”
Accounting instantly resonated with him, he says. “When I started doing it, I just seemed to know it already.”
He made it his major and, after graduating from Ohio University, Bushman landed a job at one of the best accounting firms in the country.
He left public accounting, however, to pursue self-discovery. He traveled across the country with a band of serious martial artists, managing their public performances in a production called “The Amazing Martial Arts Show.”
“I lived almost exclusively out of a tent, reading books, studying martial arts, keeping a journal, and just soaking up experiences,” says Bushman.
The gig paid poorly, so after a while he took a job as an internal auditor. Yet he “found the work less than interesting, which is an understatement.”
He pondered a future as an educator and decided to pursue a PhD at the University of Minnesota.
There he developed a passion for research, having met a professor who was conducting experiments using pigeons to see if they would diversify risk based on pressing buttons with different probabilities of receiving food. “It was beyond intellectually stimulating,” Bushman says, “so I got drawn into research.”
After earning his PhD, he joined the faculty at the prestigious University of Chicago where he spent more than a decade researching and teaching. There came a point where it was time to move on, and he searched for his next career move.
That’s when the offer to join the UNC Kenan-Flagler faculty emerged. Bushman was sold on the intellectual horsepower of the professors at UNC and the envious lifestyle perks of Chapel Hill.
“I live on seven-and-a-half acres of land in an oak forest,” he says. “And while Chicago has all those Nobel-Prize-winners, I don’t feel like I’m missing out on anything, given the caliber of my colleagues and the way UNC Kenan-Flagler has supported my research. The whole setup is top-notch.”
“Accounting is age-old, but the new Charlotte program has motivated a complete redesign of our Executive MBA courses,” Bushman says. “This gives me an opportunity to reinvent both my course and myself as a teacher. With the help of the UNC team, I am really focused on powering up the learning experience.”
Bushman is a productive scholar at the Business School, where he served as chair for the accounting area for 16 years. His research has been extensively published in leading academic journals and presented at conferences and seminars around the world. His work was honored by the Weatherspoon Award for Distinguished Research at UNC Kenan-Flagler.
One striking example is his paper “Bank CEO Materialism: Risk Controls, Culture and Tail Risk” in the Journal of Accounting and Economics.
Using background data purchased from private investigators, he and his colleagues found the proportion of banks run by materialistic CEOs (those who bought luxury cars, yachts and prime real estate) increased significantly from 1994 to 2004, coinciding with major bank deregulation.
Risk-management controls substantially weakened at banks that hired materialistic CEOs. Further, executives at banks with materialistic CEOs more aggressively exploited insider-trading opportunities around government intervention during the 2008 financial crisis.