Speaker 1:
From the library of the New York Stock Exchange at the corner of Wall and Broad Streets in New York City, you're Inside the ICE House, our podcast from Intercontinental Exchange on markets, leadership and vision and global business, the dream drivers that have made the NYSE an indispensable institution of global growth for over 225 years. Each week, we feature stories of those who hatch plans, create jobs and harness the engine of capitalism, right here, right now at the NYSE and at ICE's exchanges and clearing houses around the world. And now, welcome, Inside the ICE House. Here's your host, Josh King of Intercontinental Exchange.
Josh King:
10 years ago in 2012, the headlines blared, ICE makes bid for NYSE, the cost, $8.2 billion. Suddenly, then 220-year-old institution would be owned by a 12-year-old upstart led by Jeffrey Sprecher, a chemical engineer who grew up far away from Wall Street in the hamlet of Madison, Wisconsin. Here's Jeff talking to Maria Bartiromo when the deal was announced.
Maria Bartiromo:
So in terms of revenue synergies, that's the point. You don't want to have a lot of overlap. Otherwise, the deal wouldn't be passing muster.
Jeffrey Sprecher:
Absolutely.
Maria Bartiromo:
Is that what you're saying? Okay.
Jeffrey Sprecher:
That's exactly right. And we've seen in our industry particularly, and NYSE Euronext specifically, it's been hard to put these mergers together. So if you look at our two businesses as we sit here today, we have no overlap, which we think will help make it easy to put the businesses together.
Josh King:
So putting the businesses together was one task, re-imagining how this building at 11 Wall Street would function was another task entirely. The team got down to work taking the sixth and seventh floors, the old Big Board Club, which had been the rarefied bastion of the exchange staff and member firms, and turning it into a massive modern event space for the 2,000 or so public companies traded here. Their home away from home when they're in New York City. You can still find a throwback to that bastion in the chairman's room, the old office of longtime chairman, Dick Grasso, where now hang the portraits of three of those chairman from the two century period of the place. There's John Coleman, William Batten and John Phelan, along with a few other men who served as president of the NYSE. One of them, John Warren, was in office when the stock ticker was invented and oversaw the change in membership to a property right, allowing members to sell their seats forever changing the nature of the exchange.
Josh King:
One thing that's common among all eight portraits that hang in that room though, they're all white men. That all changes now. The announcement last December that Sharon Bowen would succeed Jeff Sprecher as chair of the exchange, the first African American woman to hold that post, drawing a line from a half century ago in 1970 when Joseph Searles on February 12th of that year signed the constitution of the New York Stock Exchange, making him its first black member. As we mark Black History Month 2022, coming up a conversation with our new chair, Sharon Bowen, on the future of the in New York Stock Exchange, why diversity is an essential part of success and her amazing career that brought her to the corner of Wall and Broad Streets from an all black elementary school in Chesapeake, Virginia. That conversation coming up right after this.
Speaker 5:
India has one of the strongest and fastest growing economies in the world. With a population of 1.4 billion, making energy secure, affordable and sustainable is essential in supporting its growth. In response, the Indian government aims to diversify its energy mix, increasing its natural gas consumption to 15% by 2030. Efficient to transport, liquified natural gas is critical in countries with developing infrastructure. ICE's West India Marker LNG Futures contract compliments our global natural gas complex, providing essential risk management as demand for liquified natural gas in India and the Middle East grows.
Josh King:
Our guest today, Sharon Bowen, was named Chair of the Board of Directors of the New York Stock Exchange in December 2021 and joined ICE's Board of Directors in December 2017. Sharon served as a commissioner of the Commodity Futures Trading Commission from 2014 to 2017, where she was sponsor of the CFTCs Market Risk Advisory Committee. Previously, she was confirmed by the U.S. Senate and appointed by President Barack Obama to serve as Vice Chair of the Securities Investor Protection Corporation, the old SIPC, where she assumed the role of acting chair in March 2012. Prior to her appointment to the CFTC, Sharon was a partner in the New York Office of Latham and Watkins. Welcome, Sharon, back Inside the ICE House.
Sharon Bowen:
Thanks so much for having me.
Josh King:
In early December, Jeff Sprecher, the Founder, Chairman and CEO of ICE, announced several changes to the company's leadership, including that you'd be succeeding him as chair of the NYSE. When did you both first talk about him handing the reins to you after nearly a decade in that seat?
Sharon Bowen:
We hit the conversation a couple of months before the announcement and I was on it, frankly, when Jeff approached me about sitting in his chair. I joke because as you know, I've been on the board of the New York Stock Exchange and I said, "So Jeff, this just means I just move four seats over, right?" He goes, "Well a little bit more than that." I'm really excited about it. And of course, this is an iconic institution and being the first woman, being the first person of color I think just symbolizes where we are as a country.
Josh King:
I mean you look up at those portraits on the wall of the chairman's room that I spoke of and you wonder about the process of them succeeding one another. What was the process like for you? We're far from Vatican City where you see smoke coming up from the chimney to announce a new pope. What has the first month been for you during this changing of the guard on Wall Street?
Sharon Bowen:
Well the first thing that happened was my emails just went crazy and my phone did too. I heard from people from all over the world, many friends and from the industry, and that was a lot of fun to reconnect with a lot of folks. But I think the real highlight when it really hit me was on January 3rd, I rang the opening bell, the first day of trading for this year. And walking into that room, I'm always excited when I walk on the floor of the New York Stock Exchange. But that particular day, all the signs were like, "Congratulations, Sharon Bowen." And when I rang the bell at the podium, [inaudible 00:06:42] next to me, it was just magical. I was just thrilled beyond anything I could have imagined.
Josh King:
I think the first time you ever stepped foot on the floor of the exchange was, I don't know how many years ago, when you were an intern at Goldman Sachs. What brought you here then?
Sharon Bowen:
Yeah, that was a long time ago. So a little bit about my history, obviously I did a JD-MBA and one of my summers I spent here in New York City working at Goldman Sachs. And as a summer intern, you spent time either following the specialists on the floor or doing fed runs to make bids on treasury securities. What I do remember from that day, there were a lot of guys with different colored jackets and there was a lot of paper on the floor. So this is clearly before the digital age, it was a little bit scary and intimidating.
Josh King:
That day might have been scary all those years ago, but you are now only the 26th person to hold the title of NYSE chair and notably first woman and the first person of color. What does the chair of the NYSE do? I mean is it possible to go back to that experience with Goldman and everything else that's come since and prepare for the responsibility? Or do you think it's mostly over the coming years, mostly going to be on the job training?
Sharon Bowen:
Well I think my love of the markets has been there, frankly, ever since I majored in economics, going back to my college year. So I've always loved the financial markets and I've always followed the markets. Obviously, you mentioned my time as a commissioner of CFTC, I saw what happened when our markets don't work. And that happened to be the period of time when we had some of the biggest bankruptcies of broker dealers like Lehman Brothers at Madoff. And so when I was approached the second time by the Obama Administration to consider to be the CFTC chair, rather commissioner of the CFTC, I knew that was an opportunity to not only just give back and to be a public servant, but also to try to do whatever I could to make sure that we hopefully would never have another crisis like that again.
Sharon Bowen:
But more importantly, as I said at my hearing at the time, I wanted to be that person who was the voice of those who had never had a seat at the table, many of whom had lost their jobs, there were time and accounts. And so I took that position as a commissioner through that lens.
Josh King:
We heard that brief clip of Jeff talking to Maria Bartiromo the day that ICE announced that it was going to acquire NYSE Euronext at the time, it would take another 11 or 12 months for the deal to be consummated. But then Jeff takes the title of chairman and serves as chair for the eight years following. But he also goes back to Atlanta and focuses on continuing to build ICE, which has grown leaps and bounds many, many acquisitions later. In some ways, he's a distant chair of the NYSE, you are much more present in New York. And as you take the gavel, must have different ambitions of what you might be able to do with this office.
Sharon Bowen:
Oh, absolutely. So technically as the chair, I will be chairing the board meetings, but I plan to use this platform in other really amazing ways. I obviously want to see more listed companies, so I want to help however I can to make sure we're being relevant to companies. I'm a big proponent of transparency. So the more companies we have public, that's always a good thing for me. I also think I'm a big passionate believer in diversity and inclusion, also focused on access to capital for women and the underrepresented. And so I hope that I'll be able to use this platform to advance the ball in those areas as well. No, that's not really in the job description per se, but I wouldn't be where I am today if I didn't focus on those things as well.
Josh King:
I mean a lot of those people on the wall figured out different ways to use the platform for their own purposes and to advance this institution, which by the way, this year is going to mark it's 230th anniversary.
Sharon Bowen:
I think you've got to be relevant to grow. And we know that ESG is important to investors. We know from our list of companies their journey to become more diverse and inclusion, ways that we can help them do that. We formed the New York Stock Exchange Advisory Council, that was a way for us to burden the universe of diverse candidates to be board ready, nominated by CEOs, so we're already vetted, already board ready. And so part of that was to help companies to give them a resource to find people that could serve on their boards day one.
Josh King:
And we're going to talk more about the Board Advisory Council in a couple minutes, but let's take a little journey back in time, Sharon. I mean you are, as I mentioned earlier, from Chesapeake, Virginia. Your dad was an electrician at the nearby Norfolk Naval Shipyard. Here is a clip from a news reel from the early 1960s when your dad was probably repairing the battleships and aircraft carriers and submarines of America's fleet. Let's listen.
Speaker 7:
The Norfolk Naval Shipyard is one of the largest and most flexible industrial facilities in the Tidewater area. In fact, it is the largest shipyard in the world now devoted exclusively to ship repair and conversion work. Located on the Southern branch of the Elizabeth River, it is the oldest of the 11 Naval shipyards in the United States.
Josh King:
Norfolk still running strong, Sharon. But what do you remember of growing up back then? And what values did your dad impart to you as he came home from work at the yard?
Sharon Bowen:
Yeah. So it's really interesting, in addition to my father, my sister and brother both also had worked at the shipyard. And there were a couple of things. A lot of people came to Virginia from different parts of the military. So the students who were in class with me, some of their fathers served in the service at the time. But at a really young age, I was able to actually go in a submarine which is unusual. I got to see a [inaudible 00:12:46] be commissioned, which is a great experience as well. And so the whole part of our history of our country was in my blood in that sense. I didn't think anything was unusual about it, but I also knew how important those big aircraft carriers were to the safety of our country.
Josh King:
Your dad put in these long days, didn't have a college education I think you told me. But certainly when you saw him come through the door, a lot of the values that he brought to his work and gave to his kids were very much in evidence weren't they?
Sharon Bowen:
Oh, absolutely. Growing up, two things that were instilled in us, hard work was one, but also the importance of an education. Both my mother and father were big proponents of make sure you get a great education. We came from a community, it really was a village. Our neighbors were encouraging us to do well in school. And I remember the days when I used to get a quarter for each A on my report card from my neighbors, and those were good days for me. So I wanted to get A's and that motivated me to get A's as well. So I think I came from a community that just believed in hard work. It actually believed our country would definitely be a better place. And as you mentioned, I grew up initially in an all black neighborhood, went to an all black elementary school. So you can tell by doing the math how old I am. But before desegregation, it really hit in Virginia. And that was not an easy time. Many people fought for civil rights for people like me.
Josh King:
Your mom is a busy person too at the time, raising five kids, also substitute teaching, doing other jobs around town. But they were determined to make sure that that wasn't going to happen with the case of the next generation that you guys were going to get educated. How did they make sure that that happened for you?
Sharon Bowen:
It wasn't really an option. I think we just knew that that was the ticket to a better life. And then also, I think just the notion of curiosity. We were groomed at an early age, you should be curious about things. And I always attribute my success to having that curiosity and learning about things and being exposed to things. So even my mother, she would do people's hair in our kitchen. As I said, our neighbors, they grew vegetables that we ate. We were pretty well cared for, even though we were poor back then. We didn't know we were poor back then.
Josh King:
Talking about curiosity, Sharon, you've said that I think that among your brothers and sisters, maybe they outshined you in math and science skills. Hearing about your sister, nuclear physicist, Sheila Bowen Taylor, it reminded me of that scene in Hidden Figures where Katherine Johnson solves the riddle of orbital transfer using Euler's method. Let's take a listen.
Katherine Johnson:
The problem is when the capsule moves from an elliptical orbit to a parabolic orbit. There's no mathematical formula for that, as we can calculate launch and landing, but without this conversion, the capsule stays in orbit. We can't bring it back home.
Speaker 9:
Maybe we've been thinking about this all wrong.
Speaker 10:
How's that?
Speaker 9:
Maybe it's not new math at all.
Katherine Johnson:
It could be old math, something that looks at the problem numerically and not theoretically.
Josh King:
Tell me about your sister.
Sharon Bowen:
I always said she had the brains of the family. Being a physicist, math and science came easy to her as well. And she was during that era and in fact was recently recognized. Once that move came out, I think a lot of people thought about the other really smart black women who had helped our country. And she was definitely one of the first black women in that sense. She's a great friend and role model today. She's my only sibling who's still alive. We're really, really close. And she always inspired me. I guess my brothers and sisters did, all of them inspired me.
Josh King:
And turning to you, Sharon, you did all of your schoolwork before lunch and then spent the rest of the day in the library devouring books, maybe three a week until you got through just about everything on the shelves. In some ways, it didn't matter what was on the pages, it was just moving your eyes over the page was the key for you for advancement.
Sharon Bowen:
No, absolutely. I still have a passion for reading and I tell that story, it was a creative way that the teachers came up with to keep me occupied, that I would just do my schoolwork before lunch and then after lunch I would go in the library and I went on reading pretty much every book. I'm a big advocate reader. And I tell people read anything, but read. And you learn through reading. And that sense of curiosity, I think it's one of the reasons that I succeeded in the different things that I tried throughout my career.
Josh King:
You and another black woman graduated number one and two in your high school class. And if you look at the rest of the rankings, those who graduated in the number three, four and five positions were all white. They were planning to go on to the University of Virginia, which Thomas Jefferson founded 1819. And you could have easily gone perhaps to an HBCU, but you decided to go to Charlottesville which had only admitted women since 1970. Why did you want to push those boundaries at that time?
Sharon Bowen:
It's really interesting. So when I found out my peers who were graduating two, three, and four, five were going to UVA, I was like, "Well what is this UVA?" And I said, "Well I should apply there too," even though the guidance counselor was not encouraging me to do that. In fact, she was a little bit baffled as to why I wouldn't want to go to historically by college. And I was just curious, I'd never been to Charlottesville at all. Fortunately, I got a full academic scholarship room and board to go there. And you're right, I was the fourth entering class of women in the college at that time. Clearly, not that many women of color, not that many people of color even, at UVA at that time, that was in the fact it was a public university. But I really thoroughly enjoyed my four years there, met my husband there, got really involved in student government and the resident staff program. And one of my highest honors was to live on The Lawn my fourth year, to be the head resident on The Lawn, which was really special.
Josh King:
I mean another thing you did when you got there was you were involved in a march on the president's house to get a full African American affairs program. How much resistance was there to that?
Sharon Bowen:
There was a lot of resistance, but we were pretty vocal back then. Looking back on it, yeah, I was just starting when the people who were the third and fourth year students who were my mentors were leading those marches. I knew how important that was particularly having grown up, having seen KKK rallies as a kid in the south, I knew how important it was for us to learn more about our heritage and for everyone else to learn about our heritage. And so the fact that there were very few, I think maybe there was maybe one black person in the dean's office at the time and maybe one black professor at the time, it just didn't make sense to me. It just did not make sense to us just given the intellect that was out there.
Josh King:
I mean by the time you got out of UVA, you got out of law school, you're a young lawyer at Davis Polk. You're working on really some of the biggest M&A deal of the 1980s. It's the time of Drexel Burnham and the RJR Nabisco and Barbarians at the Gate. And yet, there you are flying to Chicago for meetings in first class in your business suit and some people are still thinking you might be a flight attendant. How was your journey through the legal profession tracking with changes you've seen in the recruitment of young black lawyers today?
Sharon Bowen:
So when I started on wall street as a corporate lawyer, again, there were not that many black partners at firms and not that many black associates at the majority of firms either. And so what we decided to do was we self-mentored ourselves and created an organization that's still thriving today to encourage more students of color to go to majority firms. And so what I typically would do is we would try to solve for problems. If something didn't exist, we would create it. So I decided we wanted to have more black associates to relate them, so we created what was called a diversity weekend to bring in recruits to learn about the firm.
Sharon Bowen:
When we started a women's initiative, that was in response to the young women saying, "I don't know how to develop business. I'm supposed to go get business. No one taught me how to do that, to create avenues and tools to solve for a problem." And so that's what's happened with our country as well. So people have solved for gaps that have been there by either creating trade associations, fraternities, sororities, community organizations, civil rights organizations, nonprofits, again, to solve for things. And so that's something I've always enjoyed doing frankly.
Josh King:
I mean if you think back to those that mentored you, in turn, you looking back at your own career from this perch that you're sitting in now have to think of all the people that you've mentored and recruited, you've actually seated a large number of the partners that are white-shoe firms up and down Wall Street now.
Sharon Bowen:
Yeah, that's true. I'm proud of my tribe as I call them, and I enjoyed mentoring and I still do today. I still mentor today as well. And I was a beneficiary of having great mentors. And so I always told people, people ask, "How do you find a mentor?" And I said, "Well be a good mentee. Provide something to someone who could use a helping hand," whether it's that partner at the law firm who doesn't have the time to write that article that's an important subject matter or to volunteer for that hard thing to do. People will notice you. And before you know it, you'll have mentors.
Josh King:
I mean you've talked about law school tuition really being a barrier for entry into the profession even today. What progress do you see being made?
Sharon Bowen:
I, along with a group of my colleagues at Northwestern Law School, we endow a scholarship for African American law students. And so the good news is we're in a position where we can actually do that today and encourage others to do that, to endow chairs, to have African American professors, that's something I just had a conversation with one of my law school classmates with a couple hours ago. Those are important things to do, to give back that way. And then when people see us giving back, then our peers will do the same.
Josh King:
I wonder how you look back at your corporate law career today. I mean when you see news of fleets of new airplanes being financed for new airlines starting up, which we've talked about on this show when we had Steven Udvar-Házy on the program, or when we see news about Microsoft buying Activision Blizzard, you have to harken back to your own work for companies like Delta Airlines or Nintendo as they planted flags for either a global root structure or these ubiquitous gaming platforms. I mean you saw this stuff at its infancy.
Sharon Bowen:
Which was a lot of fun, definitely a lot of fun. One of the things I don't miss are the long hours and the late nights, but that's also how you learn on the job frankly. And it was, again, that curiosity about solving for problems for clients and doing so in an efficient way and doing so in a... I was fortunate because I had a business degree and a law degree, I could talk business and talk law and business at the same time and understand what they were trying to achieve.
Josh King:
What Delta is trying to achieve is their growing airline. They've got to buy a lot of DC-10s, MD-11s and 767s.
Sharon Bowen:
Yeah, those are expensive. At the time, I was doing a little bit of leasing of aircraft. Those are very expensive planes to finance you or to help clients that are doing strategic investments as a way to grow their businesses and understanding that model. And again, I also know what happens when things go bad. I do remember when the M&A business dried up and we all became restructuring warriors at that time. I remember when the dotcom bubble burst and having to pivot. So it's another thing you learn to do is you learn how to pivot. Again, I think you can be a great lawyer under any subject matter. Litigators will tell you that. But as a corporate lawyer, I believe the same thing is true.
Josh King:
I mean about a decade after the dotcom bubble burst, you did pivot. 2010, you're confirmed by the United States Senate to serve on the Securities Investor Protection Corporation. Was that your first experience as a regulator? And how does that organization work with like FINRA, the SEC and the self-regulating exchanges?
Sharon Bowen:
That was my first time being involved in serving in that capacity. And when I got the phone call from the Obama Administration about it, I initially said, "Well let me think about it over the weekend." And then I got out a book to say "What's SIPC?" And once I read about what SIPC was, and it's interesting, it is a nonprofit corporation. It's not a federal agency, which is how I was able to stay at my firm as a partner. My fellow partner thought it was a great idea and a great experience for me. And in fact, it really was. I mean not withstanding the fact that one of the hardest things I had to do was...
Sharon Bowen:
And we did this intentionally was to meet with people who had lost their jobs and their life savings. We wanted to make sure that they knew that we were listening. The importance of having that SIPC fund there to provide some cushion for lost funds and why that was really, really important. That experience was a really good one. I learned so much, again, about the broker dealer community that I hadn't really focused on before.
Josh King:
I mean I'm curious, what was the backdrop a little later of President Obama appointing you as the first African American commissioner of the CFTC while you're back at Latham and Watkins? I mean you were confirmed really by a party line vote, 46, 40. What were the challenges that the commission was facing back then?
Sharon Bowen:
So Dodd-Frank had just been implemented and the agency was in the rule making and the rule writing stages, which was another reason why I was very excited to say yes was to be part of trying to come up with a solution where investors would be protected, that we wouldn't have another great recession of financial crisis. And so because of my background, because of my securities background, because of my SIPC background and my knowledge of business, it just seemed like a perfect opportunity to serve in that way. And also by the way, I did spend a summer at the Chicago Board of Trade, so I actually knew a little bit about commodities and [inaudible 00:28:04] at the same time.
Josh King:
In your farewell addressed to the CFTC, you said that you'd be judged by the answer to the following question, are markets more stable and protected today upon my departure than they were when I arrived? And that was five years ago. So I'm wondering how would you assess them today?
Sharon Bowen:
Well we haven't had another financial crisis, have we?
Josh King:
No.
Sharon Bowen:
So I think we did a good job. No, seriously, I think so. The key is transparency and one of the things that we did at the agency, and one of the reasons why my Market Risk Advisory Committee was so active is we wanted to solve for things like liquidity and transparency and clearing houses and skin in the game. And as a regulator, you don't pick winners and losers. But as I tell people, there's no Democratic answer or Republican answer, there's a right answer. And so through collaboration, which again, that agency is very collaborative in working with the industry, we definitely created greater transparency. Well you're dealing with a dark opaque market Like the derivatives markets were, they created those weapons of mass destruction. I think that's what Warren Buffet called them.
Sharon Bowen:
Once we shun a light on what those things were and to make sure that companies have the capital to withstand another downturn, to make sure that people had cybersecurity protections in place testing their systems. So we tried to work on all those things that we saw that would help better protect our markets and to make them more transparent, more fair, more stable.
Josh King:
After the break, the New York Stock Exchange Chair, Sharon Bowen, and I are going to discuss her role at Intercontinental Exchange and the New York Stock Exchange now and how they can help shape the conversations around ESG and diversity today. And that's all coming up right after this.
Speaker 11:
The transition to electronic trading is gaining support in fixed income markets, presenting opportunity and driving demand for data. At ICE, we're a leading provider for fixed income data and analytics. We offer a comprehensive fixed income execution solution via ICE bonds, committed to execution quality, transparency and information. We provide a wide range of platforms with deep liquidity pools that support multiple trading protocols. Our fixed income indices can be tailored to your investment strategy powered by our data. Our ESG data offers increased transparency into fixed income markets. Access the ICE fixed income ecosystem, including the ICE bonds execution platforms, evaluated pricing and analytics via ICE fixed income select. By creating a single point of access for our execution platforms, customers can utilize a variety of trading protocols and manage risk. ICE supports your end-to-end fixed income workflow, increasing transparency, execution efficiency and data access across the fixed income marketplace.
Josh King:
Welcome back. Before the break, the New York Stock Exchange's Chair, Sharon Bowen, and I were discussing her career arc from Chesapeake, Virginia to Wall Street, and some of her observations about the intersection of law and regulation in both the public and private sector. Sharon, you're now on the board of three companies, including ICE. Do you remember when you first heard of Intercontinental Exchange and why coming off your tenure at the CFTC that ICE might have been the company whose board you wanted to join?
Sharon Bowen:
So obviously, as a commissioner of the CFTC, ICE was one of the entities that we regulated. I got to see the good, the bad and the ugly of all companies. The good news is most of them were really good companies. ICE in particular was extremely well managed, very proactive in terms of regulation. It didn't shy away from engaging us as regulators, problem solvers in that sense. And so when I left the agency and got the phone call, I knew number one, Jeff Sprecher is a brilliant guy, I knew what he built ICE into, but also, I had the chance to meet most of the senior management team as a regulator. And I got to see the plumbing, if you will. And so I knew I was joining a place where your integrity and transparency were really key. A founder led company creates a different culture. And that also was really attractive. So not withstanding the fact that ICE is a public company, Jeff really built it from scratch. And so that tone from the top, rewarding people who succeed and teamwork, those attributes really attracted me to it.
Josh King:
What for you had been, coming to that point, the best training to be a board member? And what are the things that you had to learn as you went along with it?
Sharon Bowen:
Probably the best training was advising boards, particularly in bad times, which is always really hard, when they're dealing with really complicated issues and how do you explain complex legal terms in a way that makes sense? And also, how do you talk about pros and cons in terms of, "Well if you do this, this is what's going to happen?" To give them all of the things that they need to know to be able to make a decision, you don't make the decision for them, but you tee them up so they know what the landscape is. Corporate governance was something I often advise companies on what that looked like and what that meant. So my legal training definitely prepared me for... I knew what a good board person should be able to do.
Josh King:
And what are the things that you don't think you could have anticipated and you end up learning on the job?
Sharon Bowen:
I would say two things. The hardest thing is to not micromanage the company. Your job is not to run the company. Your job is to be a strategic advisor to the company. As the director, you've got a fiduciary obligation to the corporation and its shareholders. As a director, being on top of what are the burning issues that we need to know about? What are the strengths? What's the competition being a lot more strategic and knowing the competitive landscape is really important. And so those are the things that I've learned a lot about since.
Josh King:
And now, sharing the New York Stock Exchange of which you've long been on the board, but you're now a chair of, the battle for listings played this out-sized role in how the public views the New York Stock Exchange. But behind the scenes, Sharon, the relationship between our new president, Lynn Martin, and the SEC's new chair, Gary Gensler, may play a big role in the future of trading. What do you see as some of the big issues on the docket for the SEC and the exchanges? You've worked closely with Gensler in the past.
Sharon Bowen:
Well I read in the paper, this is not based on any conversation I've had with Gary Gensler, but I read in the paper I think today or yesterday that he's got a pretty broad agenda and some of them are mostly focused on investor protection, focused on more disclosure, focus on more transparency. Again, as a former regulator, all things I care about is a regulated exchange all things we care about as well. At the same time, I'm a big believer that regulators in the market need to listen to each other. You don't want to solve for something that's not broken. At the same time, you don't want to make regulations where you have unintended consequences because no one actually talked to a market participant about how that actually worked in their market.
Sharon Bowen:
So I think it's important to have a lot of people around the table at the time, which is why those advisory committees and councils are really important. And I'm sure Chairman Gensler will have an open door. He too is a really curious person, as well a real smart guy. And I'm sure we'll have a great way of making our markets just the envy of the world, which they are today. That's what we all want.
Josh King:
And you talked about what it was like for you when you came into SIPC 2010 right after the financial crisis. I mean things were going nuts. 2022, Sharon has started in a volatile way. And in some ways, it reminds you of 2020 as the pandemic changed the paradigm for so many investors. How do you think, perhaps as what we're seeing now, rising inflation, market uncertainty might affect the decision this year of companies to go public versus staying private longer?
Sharon Bowen:
They've dealt with this issue, I mean that's nothing new, right? And again, this January was slow, but you're right. The beginning of 2020 was slow and the beginning of 2021 was slow. And look what happened in terms of it being record years for our markets. The good news is I mean the markets, they factor in macro, decisions like interest rates and what the fed is going to do. Sometimes they get it right, sometimes they don't. But the good news is everyone has that same information at the same time. But I'm pretty confident our markets are going to function well because they do so in good times and bad times, again, if there's that transparency that's there, I think we'll be fine.
Josh King:
You mentioned earlier ESG, and as we both know, a company's management of their environmental, social and governance issues is often seen as critical to that company's long-term success and a focus of all of their boards on all companies. I mean from where you sit, what are companies doing well and what can they do better when it comes to ESG?
Sharon Bowen:
So I'm a big believer in making sure that you're listening to all of your stakeholders. And so that goes from your employees. Are you attracting the right talent pool? We know that people in the workforce today want to work at companies that are diverse. They want to diverse peers. We know half of the talent pool, 50% of the workforce are women that are out there, so why wouldn't we not tap that talent pool? So that's one stakeholder group. You look at shareholders, the biggest stakeholder in that sense who want to see companies grow and succeed. And to do that, they've got to make products that people want to buy that are safe, that serve a purpose and that don't harm the environment. Those are things that the shareholders are looking for and asking for today.
Sharon Bowen:
And they want diversity. They want representation on the boards and in the C-suite. And so at a minimum, they want disclosure about that so they can decide to vote with their feet if they choose to do so. Likewise, climate change, that varies from industry to industry. Companies are along different paths of growth in that respect in the ESG journey if you will. But the good news is everyone's on the path, which I think is really important. And then the other part of the stakeholders, I think you've got to look at the communities where you work and where you live. And you want to be a good citizen. As a corporation, you want to be a good citizen at the same time and give back to those communities that embrace you and where you sit in their backyards.
Josh King:
You mentioned this earlier, Sharon, but this is not your first visit Inside the ICE House. The first time back in Episode 151, you were joined by Duriya Farooqui and Betty Liu to talk about the New York Stock Exchange Board's Advisory Council that you are the Co-Chair. How has the council evolved since Duriya, you and Betty sat in this office with me?
Sharon Bowen:
Well we had a really, really great beginning and our database has really grown. I think our first class, we had maybe 30 candidates. And again, these are women and diverse candidates who have been recommended by CEOs. So there are people the CEOs know, they know their skill sets, they know that they're board ready. And that's important because we all know that network is important. People tend to refer people they know. In this case, we want to make that pool a diverse pool of people that you know in that respect. We're continuing to evolve. I think we have about 180 candidates now in our data pool and we've placed candidates as well. So it's a progress.
Josh King:
I mean is your mentoring potential board members in talking to them about how they get themselves ready to be tapped for this moment when they too will be serving on the board of a public company, what are the top lessons that you tell them they need to be ready to do?
Sharon Bowen:
You've got to know the industry. You've got to know the company. So read the [inaudible 00:41:11] statement, the annual year report, see what skill sets are already on the board, make sure you've got a resume that's going to resonate with a board in terms of your own skillset. So don't just make it a chronological, "I went to school here and I worked there." What are you bringing to the table? What have you created? What have you run? What have you structured? What did you help grow? And that could be a nonprofit. It could being the treasurer of your church that you belong to. There are all different ways you can create skill sets. And so I encourage people to do that. So you may want to start with a nonprofit board. And I tell people if you do that, make sure it's one that you are passionate about and treat that like any other board. Be prepared to have meetings, et cetera, because the fiduciary obligation is the same and the corporate government should be the same.
Josh King:
As you look at the statistics, Sharon, women have hit a record share of seats in the S&P 500 in boardrooms in 2021, occupying 113 more seats than they did at the end of the prior year, up 7% from 2020. Where do you make of where we are? Where do we have to go?
Sharon Bowen:
We have far to go. We're getting there, we're getting closer. That number should be 50% based on the population. Even you look at the percentage of people who are going to business schools and law schools, which is most people who serve on boards, not most, but a lot of them have law degrees or business degrees. You look at the compositions of those schools. They have been more women than men for a long, long time as well. So the numbers are gradually getting better. Yes, this last two years, especially for women, really good. But that's just a step in the right direction.
Josh King:
You're currently involved in a lot of other organizations beside ICE and the NYSE dedicated to the economic empowerment of girls and women, and made an effort to do so throughout your entire career, Sharon. Seneca Women where you are a partner as a platform solely dedicated to connecting and advancing women in the economy, why is it so important for you to participate in organizations that are focused on these causes?
Sharon Bowen:
Well women control like 75% of their purchasing power. And so I used to always say, it's somewhat baffling to me, as a woman, my money in the economy, I'm making purchasing decisions. Yet as a woman entrepreneur, I can't get a loan. I can't get a VC fund. 4% of VC funds go to women entrepreneurs, 10% of bank loans go to women entrepreneurs. And so I looked at this like why is that the case? And what are those barriers to entry? And what can we do to solve for that issue as well? We know it's not because there's an intellectual gap. We know that's not the case. But there's definitely an opportunity gap. The fact that a lot of the people are making the decisions as to who gets the money tend to be not women or people of color. And so that's one of the barriers to entry, if you will. They are the gatekeepers. And so making sure those financial institutions that hold the purse strings are providing fairly an opportunity for us to advance more.
Josh King:
So on Seneca Women, can you tell me a little bit more about the organization, how you got involved?
Sharon Bowen:
So Seneca Women was created and founded by Ambassador Melanne Verveer and Kim Azzarelli. And Ambassador Verveer was the first global ambassador for women and girls. And they started the organization as a way to amplify the voices of women. They advised many of the major corporations of their strategies. They helped create some of the biggest summits, the women's summits that exist today. Also, we have a podcast network that you can get your podcast any place. We have a newsletter. We've been working in partnership and overcoming big companies to try, again, to crack that access to capital that hopefully we'll be in a position to announce that soon. And then before COVID, we had events. We've had events here at the New York Stock Exchange, Davos [inaudible 00:45:38]. And so we try to create a platform for war leaders and industry leaders. We focus on women entrepreneurs and tips for them to share with each other. And so it's a place where we amplify the voices of women.
Josh King:
So coming down to the end of our conversation, Sharon, we've covered a lot of ground. The first time you've been here, that time that you were an intern at Goldman Sachs, saw the ups and downs of the market generally. But over time, over the course of those many decades, the marketers generally moved in this upward trajectory. As you think about on a macro level what the U.S. and world needs to do to continue a forward momentum, what do you think are the most important things?
Sharon Bowen:
Two things I can tell you for sure, markets are global. So we have to solve problems globally as well. We can't do this in an isolated market way. The other thing I think that's obviously apparent is that people need to talk to each other. When I first became a commissioner, I had always assumed that all the regulators talked to each other, and that was really not the case. That's less true today, thank goodness. But if you don't know what's happening by talking to your treasury, your fed person, your FDIC person, your FINRA person, your NFA person, those people all need to be talking to each other because if we don't, that's how crises happen. And that's how you miss things because no one's looking out for it. And I think the other thing you have to do is share information and share knowledge. I think that's really important to do as well.
Josh King:
Thank you so much for spending a little time with us and joining us Inside the ICE House.
Sharon Bowen:
Thanks so much for having me.
Josh King:
And that's our conversation for this week. Our guest was Sharon Bowen, Chair of the Board of Directors of the New York Stock Exchange. If you like what you heard, please rate us on iTunes so other folks know where to find us. And if you get a comment or question you'd like one of our experts to tackle on a future show, email us at icehouseice.com, or tweet at us @IcehousePodcast. Our show is produced by Pete Asch, with production assistance from Ken Abel and [inaudible 00:47:50] Ferguson. I'm Josh King, your host signing off from the library of the New York Stock Exchange. Thanks for listening. We'll talk to you next week.
Speaker 1:
Information contained in this podcast was obtained in part from publicly available sources and not independently verified. Neither ICE nor its affiliates make any representation or warranties expressed or implied as to the accuracy or completeness of the information and do not sponsor, approve, or endorse any of the content herein, all of which is presented solely for informational and educational purposes. Nothing herein constitution offered to sell a solicitation of an offer to buy any security or a recommendation of any security or trading practice. Some portions of the proceeding conversation may have been edited for the purpose of length or clarity.
