ALUMNUS PROFILE,
for MIT Sloan School Communications Office

MANAGING RISK
A Way of Life for Joseph Chow, SM '81

It's New Year's Eve 1999, and Joe Chow, like every other State Street Corporation senior executive, has his beeper on. Though he's on call for the entire 24 hours it takes the planet to ring in Y2K, he is not chained to his desk. He is, in fact, enjoying his traditional New Year's celebration with his wife Selina Jung Chow, also SM '81, and two other Sloan classmates.

As Executive Vice-President of Credit and Risk Policy, Chow heads a team that identifies and manages risk across the company. Throughout the Y2K weekend and the days that follow, his team feeds him round-the-clock reports from locations around the globe, starting in Australia. Each one reaffirms his faith that the company has prepared well for Y2K.

Chow points out, however, that the success of his operation demands that complex global risk be managed every day, not just in a single high-profile millennium changeover. That success is reflected in State Street's twenty-three years of consistent double-digit annual earnings growth.

Chow joined State Street and this division in 1990. He's been at the helm for the past five years. He credits this relationship in part to a contact he made in 1980 through the late Professor Phyllis Wallace. During an interview at State Street ten years later, he mentioned the contact, who was by then the EVP of Credit and Risk Policy. Shortly afterwards, Chow recalls, he got a call from that same EVP's office: "He remembered me and wanted to talk. Next thing I knew, I was working for him." When he retired, Chow succeeded him.

But his relationship with risk actually began much earlier. At 14, he immigrated with his family to the U.S. from Hong Kong, ending up in the delta region of Mississippi. It was the late 1960s, during the height of desegregation. His high school environment? "Terrible." His solution? "Get out fast." His plan? Graduate from high school in three years. To accomplish this he took accelerated courses, then attended a Catholic-run summer school. After the nuns' initial surprise at finding Chow in the Deep South, it didn't take them long to recognize his potential. They steered him toward Yale's transitional year program for minorities, where he was the only Asian-American in a group of more than 30 African-Americans and Hispanics. The following year he entered Brandeis University on a full scholarship.

Economics degree in hand, Chow worked for two years on community development projects in Boston's Chinatown. He returned to school, earning a masters in city planning from MIT School for Architecture and Planning and an MS in finance from Sloan. Praising Sloan's conceptual and theoretical approach to the study of finance, he credits this framework for his ability "to define boundaries and examine conceptual consistency," a skill he fosters in others: "When someone brings me an issue, I always ask them to tear the problem apart and look hard at assumptions and limitations."

He also cites Sloan's administrative flexibility for saving the day when he and Selina Jung, a first-year Wharton student, learned that long-distance relationships and business school do not mix. Sloan invited her to transfer for second semester, accepting all her first-semester credits. Without missing a beat, they finished the program together, then got married. She spent 15 years in the computer industry before switching careers five years ago. Explains Chow, "Selina's now in 'asset management' with our most important assets: our children Joanna, 14; Jason, 12; and Kathryn, 7."

Chow contributes regularly to Sloan, knowing that he continues to reap benefits from the "Sloan connection". He humbly credits MIT's "mystique" for what he describes as "immediate credibility." Maybe he's right. On the other hand, maybe-like the nuns in Mississippi-it just doesn't take people very long, once they meet him, to believe in Joe Chow.