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Remarks at the DirectWomen Board Institute

Commissioner Elisse B. Walter

U.S. Securities and Exchange Commission

New York, NY

June 13, 2013

Thank you, Hillary [Sales], for your kind introduction. I am so pleased to be here today to talk about the importance of DirectWomen's mission and offer my congratulations to this year's honorees and DirectWomen class. I'd also like to share with you all just a few observations from my perspective as an SEC Commissioner.

This organization continues to hold a very special place in my heart. I learned so much as a participant in the 2007 Board Institute and from sharing that experience side-by-side with my fellow classmates. And, as I've said before, it was my DirectWomen-reviewed resume that helped secure my nomination to serve the public as a member of the Securities and Exchange Commission.

I stand here as proof that you do great work - providing the support, background and practical skills that actually get women on corporate boards - and the occasional regulatory commission. Your work is all the more critical as a changing economy and business environment increasingly demand a corporate culture that values not only gender equality but also sound governance, knowledgeable and independent audit committees, and rigorous risk management oversight.

I'm also very happy to be here to help you honor Gloria Santona and Mary Cranston - the 2013 recipients of the Sandra Day O'Connor award.

As you know, Gloria is Executive Vice President and Chief Legal Officer of McDonald's Corporation and serves as a director of Aon plc, a leading global provider of risk management, insurance and reinsurance brokerage, and human resources solutions and outsourcing service. And, particularly appealing to me, she, as I learned earlier today, came up through the ranks at McDonald's. I am also proud to be one of many to say that Mary is a fellow DirectWomen Class of 2007 alumna. She serves as a director of GrafTech International Ltd., Visa Inc., Juniper Networks, Inc., International Rectifier Corporation, and Exponent, Inc.

Their achievements are indeed impressive, setting a high bar and serving as an example for us all.

And there's even more talent here in this room today -- the breadth and depth of the Class of 2013's experience is outstanding. I have every confidence that you possess the qualities and experience that will add value to the companies you will someday - and, someday soon, I hope -- serve.

In my remarks for today, I want to move away from the statistics and the studies about boardroom diversity and reflect a little bit on my own experiences as SEC Commissioner and Chair. As many of you know, the last five years have seen service by the first-ever woman Chair of the SEC, and the first time in SEC history that three women chairs have served in succession; we've come a long way in a short period of time. My predecessor Mary Schapiro's term also included the only Commission ever comprised of a majority of women - again, another first for the SEC.

It certainly has been an interesting and challenging past five years for me. In looking back, I've arrived at three observations that I'd like to share with you today.

First - we should be mindful of the consequences that false choices can have on decision-making.

Second - decision-making is enhanced by a diversity of approaches, viewpoints, demographics, and personal histories.

Third - the SEC does have a role in promoting diversity.

But, before I go any further, I need to tell you that the views I share with you today are my own, and do not necessarily reflect the views of the Commission, my fellow Commissioners, or members of the staff.1

When I first became Chair, I gave some remarks at the meeting held by our Advisory Committee on Small and Emerging Companies, expressing my view that discussions relating to "balancing" the desire for easier capital formation against the need for investor protection presented a false choice.

You can't facilitate capital formation by weakening investor protections that ultimately diminish investor confidence. You don't strengthen one option by weakening the other. These goals are often cited as being in conflict with one another, when actually they are complementary.

The issue is similar to one raised by then Justice Sandra Day O'Connor in her 1991 lecture entitled Portia's Progress.2

In that lecture, Justice O'Connor cautioned that "asking whether women attorneys speak with a ‘different voice' than men do is a question that is both dangerous and unanswerable."3

She expressed her deep concerns that if a choice were forced between women's voices and men's voices, we might end up with new categories of ‘women's work'-as in Victorian-era ‘women's work' -- that would actually serve to confine women and also exclude men.

Her solution was for the different voices to learn from each other. She expressed her hope was that "whatever our gender or background, we all may become wise - wise through our different struggles and different victories, wise through work and play, profession and family."4

Applying similar principles, I believe that we can advance both investor protection and capital formation. By strengthening investor protections and consequently increasing investor confidence, the marketplace will in turn flourish.

And, on her point about wisdom, I have to agree with Justice O'Connor that it's pretty hard for anyone to argue against putting wisdom into a corporate board seat.

That brings me to my second observation - the power that diverse perspectives can bring to decision-making and what can happen when different voices do, as Justice O'Connor hoped, that different voices actually learn from each other.

Given the complexity and breadth of our capital markets and the increase in regulatory compliance matters over the past few years, no one can know it all - even the regulators at the SEC and elsewhere -- even with all the data and technology improvements we've made over the past five years.

We try to bridge any gaps in knowledge in many ways. In our rulemaking, for example, when the Commission is tasked with solving a problem with limited information, we solicit comment to access those with first-hand experience, and we try to leverage the collective wisdom of those experiences.

As a multi-member body, the Commission weighs potential actions on any given issue from its own diverse set of experiences and views. In the comment process, we ask the public, including investors, industry, gatekeepers, and other stakeholders to engage in a public dialogue and provide input and, hopefully, empirical information on the issues.

To me, the comment process helps to maximize regulatory effectiveness while minimizing the economic impact on business - it gives us more bang for the buck. It is invaluable in developing stronger, clearer and more workable rules, which generally-speaking is a good thing for both business and for investors. Similarly, in the boardroom, bringing to bear diverse perspectives significantly improves decision-making.

On the subject of rulemaking - that brings me to my third observation - the SEC's role in promoting diversity.

We continue to reinforce to our staff the value of having a workforce that reflects the diversity of America and the investors we are charged with protecting - in particular, through our Office of Minority and Women Inclusion (or OMWI, as we call it) as required under Section 342 of the Dodd-Frank Act. Our OMWI Director is required to develop standards for the equal employment opportunity and the racial, ethnic and gender diversity of the workforce and senior management of the SEC and for the increased participation of minority-owned and women-owned businesses in the SEC's programs and contracts, and to assess the diversity policies and practices of entities regulated by the SEC.

In addition, we also have our disclosure requirement for public companies to inform investors about corporate board or nominating committee considerations of diversity in identifying director nominees.

I know that there are those who remain disappointed with the rules we adopted and those who continue to believe there is still more for the SEC to do in response to our rules. But, at least for now, I would like to re-issue my plea for all companies to ensure that their disclosures about their diversity policies are truly informing their investors, who are after all the owners of your companies. A company's proxy disclosure should ensure that investors have access to information that fuels healthy and more robust engagement.


Before I conclude my remarks for today, I wanted to share with you one additional observation.

I recently checked in with our Division of Enforcement and learned that only 9 of the 105 individuals we charged in our financial crisis cases were women.

There are likely a number of reasons for this low number - and I'll leave it to the experts in the field to reach any conclusions about what it means.

I will say, though, that if there are, as Justice O'Connor once suggested, opportunities for the "different voices" to learn from each other on that front, by all means - they should learn.

Let me stop there and offer my heartfelt thanks to DirectWomen. Thank you for inviting me to be here with all of you today and for giving me the opportunity to share these thoughts with you.

My congratulations again go to Gloria, Mary and each of the members of this year's fabulous class of future directors.

Best wishes to all of you for a happy, healthy, and successful second-half of 2013.

1The Securities and Exchange Commission, as a matter of policy, disclaims responsibility for any private publications or statements by any of its employees. The views expressed herein are those of the author and do not necessarily reflect the views of the Commission, other Commissioners, or the staff.

2Supreme Court Justice Sandra Day O'Connor, "Portia's Progress," 66 NYO Law Rev. 1546, 1557 (1991).



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