William H. Donaldson - An appreciation

Let’s face it, William Donaldson was so awesome it’s an injustice to try to briefly summarize what was a sensational business career, an incredible career in public service and before either began he was an accomplished military officer. Thus this note is in our Obituary series but marked as “An Appreciation” as I could be here for days and still barely have scratched the surface of an incredible life.

Even living to 93, the great Mr Donaldson packed an enormous number of achievements into his existence. He was a founder of leading Wall Street boutique Donaldson, Lufkin & Jenrette (“DLJ” - acquired by Credit Suisse in 2000 A.D.) having begun in brokerage working for the great-uncle of George W Bush, Herbert Walker at G.H.Walker & co.?

He would go on to chair the New York Stock Exchange between 1990 - 1995 and then was called out of retirement (by family friend President George W. Bush) to lead the SEC in the wake of Chairman Harvey Pitt. Donaldson himself remarked in 2003:

“People are annoyed with Wall Street. That’s troublesome. So I plan to continue to call for corporate America and Wall Street to do a real self-examination, to go beyond just complying with the letter of the law and fulfill the spirit of what’s right. There has to be a culture of ethics that starts at the top.”

Amongst the more than 1700 enforcement actions brought by the SEC during his Chairmanship, the Donaldson-era SEC assisted then NY AG Eliot L. Spitzer in cracking down on brokerage houses that illegally helped clients trade mutual funds after hours. Speaking of trading hours, when at NYSE, Donaldson considered opening the NYSE at 0900 instead of 0930. That was nixed by, amongst others, West Coast folks worried they were already sleep-deprived to be in the office for the opening bell at 0630 AM…

Donaldson was widely admired for his management skills which included a 2-year stint as CEO of the healthcare giant Aetna and he was the founding dean of the Yale School of Management. His last role in the parish was on the board of IEX where he gave counsel to the “flash boys.”

I had the pleasure of meeting and spending some quality time with William Donaldson in Seoul in March 2011. He was one of the headline speakers, alongside Jim Rogers at a conference where I was appointed as the ‘backing band’ to the remarkable “WHD.”?

Bill was an absolute gentleman and a fount of knowledge. A kind and generous man. The whole experience in Seoul was an educational joy, particularly given the other speakers on the roster like Bill. It was also instructive. “WHD” outlined the US regulatory upheaval post-2008 and “PLY” gave the European perspective…it was an eye-opening experience as it became clear just how the USA was preparing to power its economy into the sunset while the EU/EC was already engineering its path to economic obscurity.

However, the most touching element to the entire event was the standing ovation delivered by the South Korean audience to applaud a man whose career had begun as a junior officer in the Marine Corps. deployed to South Korea in the wake of the Korean war when the Cold War was a very real threat to our world peace. Every day in South Korea, the US forces were acutely aware of the Communist forces mustered along the 38th parallel with orders to head south if the ceasefire collapsed.

The only equivalent I can think of for Bill Donaldson was Bernard Baruch who achieved the same mix of scintillating private enterprise career mixed with brilliant legacy of public service a half-century earlier. He was a great man and our parish is much diminished with his passing. RIP, a great man.