Wealth Advisor and UCLA Anderson Supporter Takes the Ethical Lead

Evelyn and David (B.A. ’88, ’92) Hou are longtime supporters of UCLA Anderson. Their generosity established the Evelyn and David Hou Fellowship. David sits on the board of Anderson’s Fink Center for Finance, and a co-lab in Marion Anderson Hall bears the Hous’ name.

As a result of their most recent gift, the Hous sponsor the annual UCLA Anderson Ethics Summit, an all-day case competition in which Anderson students from each of the school’s master’s programs contemplate and deal with an ethical dilemma that mirrors those facing professionals every day.

David Hou’s company Evoke Advisors serves as financial advisor to institutions and private clients. As a co-founder and managing partner, Hou has relished the role since earning his MBA. His other career stops include Goldman, Sachs & Co. and Merrill Lynch, as well as Luminous Capital, a company he co-founded in 2008 (and which was acquired by First Republic in 2012). Barron’s and Forbes have ranked Hou perennially as one of the Top 100 Wealth Advisors in the country.

MBA team Ethical VanGard won the Ethics Summit case competition

Hou was inspired to support the Ethics Summit in part because of the infamous Theranos case that saw the blood testing startup dissolved after the SEC charged Elizabeth Holmes, the former CEO, and her former business partner Ramesh “Sunny” Balwani with fraud, wire fraud and conspiracy. Completely by coincidence, one of the principals involved in that case was a First Republic client when Hou was with that company. At a different point in Hou’s career, a client had been an investor with the notorious Bernie Madoff. (Hou says that client tried to set up a meeting between Hou and Madoff that Madoff refused).

All of this got Hou thinking about how, throughout his career, he’d crossed paths with people who he says had “low ethics.”

“I’ve come across a lot of people over the years that I’m surprised how successful they are, given how they think about what’s ethical and what’s not ethical,” Hou says. “In all the companies I’ve been involved with, we always try to make sure the client’s interest comes first and that we’re doing everything on a fiduciary basis. So when the school asked my wife and me how we were interested supporting the school, I said, ‘I’m interested in ethics, because I feel like there’s a lack of ethics in business much of the time.’ And I was intrigued by that, because when I went to school, I don’t recall there being a requirement to take an ethics class.”

Ethics education is now an essential part of the Anderson experience, and the Ethics Summit is an integral part of the school’s ethical ecosystem.

David and Evelyn Hou unveiled the top prize of $10,000

Heather Caruso is associate dean of equity, diversity and inclusion and an adjunct associate professor of management and organizations and behavioral decision making at UCLA Anderson. She also serves as faculty co-director of Anderson’s Inclusive Ethics Initiative. Caruso says that ethical leadership recognizes the diversity of stakeholder perspectives, which is often greater than people assume. People understand right and wrong in a variety of ways, and those perspectives determine whether they feel their organization’s actions serve them well or do them wrong. Caruso says that it is essential to get ahead of those expectations by creating open and welcoming channels of communication through which accurate understandings can be developed and kept current over time.

“At Anderson,” Caruso says, “we offer our ethics courses and the Ethics Summit to ensure that students can practice handling the weight and complexity of ethical decision making in a supportive learning space, before they are ‘on the spot’ in their jobs having to make a challenging, high-stakes decision. Here, they have the luxury of time and coaching to helping them think responsibly through the details of a case and cooperate in addressing it with peers.” She advises students, “If you’re going to make a mistake, make it here where you and your fellow students can debrief and where you have faculty experts to help guide you. You’ll have an invaluable opportunity to see the many different ways a problem can be approached, and to better inform your strategies for tackling whatever ethical challenges next come your way.”

The Ethics Summit competition, held in the Grand Salon of UCLA Anderson’s Marion Anderson Hall asked teams to grapple with a case study titled “Should Some Employees Be Allowed to Work Remotely Even If Others Can’t?” The case focused on Oklahoma City’s Vallia Energy and how that company and its CEO Sean Lewis dealt with issues involving remote work for its employees. At the summit, five teams of Anderson students presented their recommendations to a panel of judges in the morning, then returned in the afternoon for a second round of revised presentations.

Earning first place honors and the $10,000 prize were Ethical VanGard, comprising MBA Class of 2024’s Aruna Naryanan, Yoshita Manne, Andrew McCormick, Haritha Gorthi and Melanie Sirisoma. Moral Mavericks, an MBA Class of 2024 team that included Ritika Shah, Sania Salunkhe, Simran Modi and Varun Iyer, came in second place, earning $5,000. The MSBA Class of 2024 team EthicGeeks, which included Hamza Shahab Shafqat, Namra Naseem, Zain Yusuf Hussain and Jane Lee, finished third with a $2,000 award.

“Having an ethics summit at Anderson is very important,” said Ethical VanGard’s Gorthi. “For two years we learn a lot about business and how to run companies, getting a bird’s eye view of the different roles people play in organizations. In a few years we want to be in leadership positions where we’ll be facing ethical dilemmas, very similar situations to what were given to us here. I think simulating those situations and understanding what frameworks to use, asking what are the different implications of the decisions we make, is very important. I think the competition did a fantastic job giving us a sense of how it would look in future for us.”

While Anderson students grapple with ethical issues in the safety of the classroom or a competition, David Hou has been grappling with such issues as a practitioner for more than two decades. “I always tell my research team to underwrite for character. The rules themselves are black and white, if you’re stealing money, you know what you’re doing is wrong, that’s easy to call one way or the other, but the stuff in the middle is harder to call.

“So I tell them to underwrite for character, because you want managers that you’re giving money to, to bend over backward and do things the right way,” Hou says. “At the end of the day, Evelyn and I feel like we’re always trying to do our ethical best — for clients and investors and just in life in general.”