William H. Donaldson is
Chairman of the U.S. Securities
and Exchange Commission. In
a career spanning more than
forty years, he has held numerous
senior positions in business,
academia, and government.
These include chairman and
CEO of the New York Stock
Exchange, founder and first dean of Yale University’s Graduate School of
Management, U.S. Undersecretary of State under Henry
Kissinger, and counsel and special adviser to Vice
President Nelson Rockefeller. He also worked on Wall
Street as the CEO of a major international investment
banking firm that he co-founded in 1959. He graduated
from Yale University in 1953 with a bachelor’s degree in
American Studies and, received an MBA with Distinction
from the Harvard Graduate School of Business
Administration in 1958.
Corporate scandals have contributed to the $7 trillion
dollar loss in the aggregate market value of American
corporations as of March 2003. Many of the scandals
were the consequence of shifting power in favor of chief
executive officers and away from boards of directors. We
are now entering a period of increased government
activism that also requires a thorough review of how
directors, executives, and financial and legal services
view their responsibilities. Board members must reassert
their authority and their responsibility to shareholders
and other stakeholders. There must also be a shift in focus on the part of directors and executive management
from “hitting the numbers” to a longer-term focus and a
reassertion of strong ethical foundations for corporations.
This effort must be led by boards of directors, the
stewards of shareholder and other stakeholder interests.
While there are several specific issues that need to be
addressed regarding corporate governance, corporations
should not be so oriented toward narrow compliance that
larger ethical issues are neglected and flexibility and
entrepreneurship are inhibited.
William H. Donaldson