Hester Peirce: All women do not speak with the same voice, and SEC commissioners are no different

A history of decisions by female members of the Securities and Exchange Commission demonstrates that women bring multiple perspectives to their roles

Nov 17, 2018 @ 6:00 am

By Hester Peirce

Fifty years ago, then-Securities and Exchange Commission chairman Manny Cohen, speaking to the Women's Bond Club of New York, predicted: "Perhaps if we take steps to make clear that women really have an important role to play in the world of finance, [you] will, one day, be gathered here to listen to an address by a lady chairman, or at least a commissioner, of the Securities and Exchange Commission."

He was right. Ten years later The New York Times was writing about the first female commissioner, Roberta Karmel, whom the newspaper described as the "SEC's Voice of Dissension." Thus began a long line of "lady" commissioners, some of whom have served as chairwomen. Following the lead of Commissioner Karmel, each of these commissioners has used her voice to provide a unique perspective to the commission's work.

Commissioner Karmel — among other professional accomplishments, a former SEC enforcement attorney — spoke up during her tenure on the commission for a careful approach to rulemaking and enforcement. Noting that "adherence to the law is encouraged by the clarity of standards which are rigorously enforced," she called for "clarity and predictability, especially in a regulatory scheme as complex as the securities laws." She was willing to raise difficult questions for discussion. She exercised skepticism, which she described as "an especially healthy trait for regulatory officials who deal in the technicalities of often arcane statutes."

Twenty-five years later, Cynthia Glassman made her mark at the SEC by being only the second Ph.D. economist ever to hold the role. Through her economist's lens, commission actions sometimes looked different than they did to the lawyers that dominate the agency. She took aim, for example, at the complex disclosures our regulations inspire: "As a nonlawyer … I don't speak legalese and neither do most investors." She had a deep understanding of the power of markets to solve problems and an expert's ability to assess the economic analyses being used to support rulemakings. Her perspective was reflected in her dissent from several SEC rulemakings, including Regulation NMS (National Market System).

A predecessor of Commissioner Glassman's, Laura Unger, likewise dissented from a major rulemaking — Regulation FD (Fair Disclosure). Modeling a healthy and underutilized regulatory practice, after the rule was in effect for a year, she issued a report that looked at how well it was working. Among the report's recommendations was affording issuers greater latitude to use technology to comply with the rule. When she later served as acting chairwoman, she picked up that technology theme by making "keep[ing] pace with technology" a key priority of her tenure. My colleague Kara Stein has likewise underscored the value of retrospective review of our rulemakings and the importance of thinking through the challenges and promise raised by technological developments in the financial world.

These commissioners are a representative subset of the women who have served on the commission. By boldly bringing their perspectives, intellectual curiosity, interests and professional experience to bear on the job of commissioner, they have enriched the SEC's approach to regulating the financial markets. Chairman Cohen may not have realized in 1968, when he suggested the possibility that women would one day serve on the commission, the wide diversity of views that these women would bring to the job.

Unfortunately, the diversity of perspectives women bring to jobs like that of an SEC commissioner sometimes gets lost today, when we assume that all women speak with one voice. An assumption of homogeneity in perspective seems particularly common when it comes to financial regulation — namely a perspective that women will, merely by dint of being female, favor aggressive regulatory intervention in markets. Some women embrace such a view, and others do not. Following the lead of Commissioner Karmel, who did not "make too much" of the fact that she was a woman, the women who have been commissioners have approached their jobs as individuals who bring their own views and experiences to bear on the issues before the commission.

Generations of women have argued that women deserve a voice, and it would be a shame now to argue that all women must speak with the same voice on financial regulatory policy. A now long line of outspoken commissioners at the SEC illustrates that women's perspectives on this subject — as on every other — are wonderfully diverse, and that is what makes the debate so interesting.

Hester Peirce is a commissioner on the U.S. Securities and Exchange Commission.


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