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Women are running for office in record numbers this year, and in the world of finance, they just scored a notable victory: The New York Stock Exchange is headed by a woman, Stacey Cunningham, for the first time in its 226-year history.
Intercontinental Exchange, which bought the New York Stock Exchange in 2013 for $8 billion, named the 43-year-old Cunningham president of the NYSE in May. She has spent nearly her entire career at the exchange and on the trading floor, and was chief operating officer before last month. Her promotion means both of the leading stock exchanges in the United States are being led by women — Cunningham at the NYSE, and Adena Friedman at Nasdaq.
Despite the historic nature of her position, Cunningham isn’t overly eager to cast herself as a trailblazer on a gender-based crusade. “It wasn’t, for me, about breaking glass ceilings or breaking barriers; it was about accomplishing what I set out to accomplish,” she told me in an interview at the New York Stock Exchange last week.
Whether she wants it or not, Cunningham’s arrival at the top of the NYSE is an important event for women. The #MeToo movement is in the background. Women are seeking public office in record numbers, their ambitions ignited by the election of President Donald Trump. But as corporate CEOs, they’re actually losing ground.
Cunningham, who oversees some 2,800 companies that trade on the New York Stock Exchange, discussed the significance of her position as NYSE president and how she sees her role in promoting diversity where she can. We also talked about whether she thinks Wall Street needs a #MeToo moment, how she thinks the markets have digested the Trump presidency, and the case for investing in the stock market when many Americans are still unsettled by the events of the financial crisis.
This interview has been edited and condensed for clarity.
Emily Stewart
So we’re seeing a reduction in the number of women CEOs in the Fortune 500, from 32 to 24, and in the S&P 500, the number is pretty stagnant. The line you often hear on that is that women will get there eventually, in the C-suite and in the boardroom. Is that a good enough answer?
Stacey Cunningham
No, I don’t think it is, and 32 to 24, that’s just going the wrong way. One of the things we need to do is to start the conversation much earlier in the individual life.
I had a conversation recently with my cousin, whose young daughter enjoys robotics and was told that, “Hey, you’re going to get made fun of if you go into robotics.” If we’re telling girls in 2018 that they shouldn’t be getting into STEM industries or into finance, then we’re not going to have people set up to be CEOs later in their career.
Emily Stewart
Using yourself as an example for women, what did you do differently that helped you get to where you are?
Stacey Cunningham
I think what I did is I found something I loved to do and I followed that. And if you really love what you’re doing, you’re not as likely to walk away from it because it provides its own satisfaction. So I was really excited about what I was doing — I really loved the trading floor for the first stint of my career; I really love what I’m doing right now. That really keeps you motivated and keeps you pushing forward.
It wasn’t, for me, about breaking glass ceilings or breaking barriers; it was about accomplishing what I set out to accomplish.
Emily Stewart
How do you make sure there is a diverse pipeline at the NYSE? That after you leav, it doesn’t just go back to white man after white man?
Stacey Cunningham
I think where we really need to be focused is making sure you’re building teams that have different viewpoints and perspectives. When you do that, and you focus on having people of different backgrounds and different experiences, you’re much more likely to have a visibly diverse team as well. That’s really the key.
It’s not just about gender. Different people have different dynamics, and you have a much more well-balanced view as a leadership team if you’re focusing on making sure you’re not all talking with the same voice.
Emily Stewart
So you’re president of the New York Stock Exchange; there’s a woman in charge of Nasdaq. And we’re also in the midst of this #MeToo movement. It seems to me that Wall Street might not have yet had its #MeToo moment — do you think it needs one?
Stacey Cunningham
I think Wall Street probably led the charge on that going back a couple of decades ago. I certainly wouldn’t say that Wall Street is perfect, or that any industry is perfect; there’s always room for improvement, especially when it comes to treating your colleagues with respect and treating them appropriately. But I do think there was a lot of improvement in the financial markets with respect to how women were treated coming out of some of the scandals that were [happening] a couple of decades ago.
Frankly, I’ve been very fortunate in that I haven’t had to struggle with what a lot of women have had to struggle with, and I don’t take that for granted. I feel very lucky not to have had to go through many of those situations.
Emily Stewart
You’re overseeing a number of companies at the stock exchange; you’re dealing with companies that are going public. Is there anything that you feel you can do to make sure there’s some diversity in the companies that are listing with you?
Stacey Cunningham
We certainly look to lead by example. When you look at ICE — the Intercontinental Exchange is the parent company that owns the New York Stock Exchange — we’ve taken great efforts to have a diverse team. There are senior leaders within the company — our general counsel of the New York Stock Exchange is a woman, the president of ICE Data Services is a woman, the president of ICE Futures US is a woman. We have a lot of senior women; we’ve put additional women on the board of ICE. That’s just one simple thing, to set that example.
And then also in how we promote many of the diversity actions that our listed companies are taking. They come in on International Women’s Day and highlight their efforts to drive diversity. Raising the profile of all of the good work that our listed companies are doing on that I think helps the broader community recognize that there’s more to be done.
And Fearless Girl is one. Fearless Girl gives that message out to corporate America to, on their boards and in their organizations, do better with gender diversity. We’re really excited to have her right outside the exchange with that message.
Emily Stewart
To move beyond some of the gender stuff, what initiatives are you focusing on at the stock exchange?
Stacey Cunningham
There are a lot of things that we’re focused on. One that’s critical is to make sure that the voice of the companies that choose to list on the New York Stock Exchange is part of any changes to how the markets evolve going forward. Our organization has been around for 226 years, but we are not the same company that we were 226 years ago.
In fact, many people don’t realize that we’re owned by the Intercontinental Exchange, so it’s interesting to see that a 13-year-old startup was buying an organization that was more than two centuries old. And part of why they did that is because they’re disruptors. ICE takes a view of, how can we improve and make more efficient what exists today? How can we build on it and provide a better experience for our customers?
So for the past four years that we’ve been owned by ICE, we’ve looked at how we can do this better? What do we want to preserve that is unique that we provide our customers, and what can we just completely eliminate, because it’s just the old way of doing things, and focus on the future?
If you look at where we’re heading as an organization, it’s where our customers are heading as an organization. I think, historically, a lot of the customers of NYSE worked with us because we were the biggest, and we’re really focused on winning their business because we’re the best. That’s how we’ve evolved our business over the past few years, and that’s what I plan to continue to do.
Emily Stewart
What do you make of the Ubers, the Airbnbs, the big companies that are staying private instead of going public? Is there a benefit to companies going public right now, especially given the availability of private capital and with market valuations so high?
Stacey Cunningham
There’s a lot more access to private money than there was historically, so companies that are looking to raise more money so they can grow their businesses have more choices than they had historically, they don’t have to go to the public markets.
But there still are a good number of reasons as to why companies get the benefit of the public markets. One, they can still raise money there. Two, they can raise their brand and their profile. They can provide currency so that they can acquire other companies and merge with other companies and grow their businesses in that way, having shares provides that for them.
They can provide their employees and early investors with ways to get into and out of their investments in the company, so having that liquidity is important. That’s why you’re seeing some of those “unicorns“ eventually become public companies, even though they have access to private capital.
I think what’s important, and where I’m focused, is that we spend our energy with politicians and regulators to make sure that we have the right rule set, because if a company like an Uber or an Airbnb waits until they’re really large to access the public markets, it means that all the Main Street investors missed out on that growth.
They didn’t get the benefit of going along for the ride while those companies were growing if they’re coming to the public markets when they’re already really grown. So we want to make sure that we have a framework in place that allows all investors to invest in the success of dreamers that are building large businesses. That’s what makes this country so unique and so special, and so we want to make sure that we’re protecting that.
Emily Stewart
When you talk about regulations and framework, what specifically are you looking for, or who are you looking to, on that front?
Stacey Cunningham
We work with the Securities and Exchange Commission closely because we want to make sure that the rules that are in place are right-sized and that they’re not so cumbersome that you have to be a really large company to comply with them.
Emily Stewart
So does that mean this deregulatory push that’s coming from the Trump administration, what’s coming from SEC Chair Jay Clayton, you see that as favorable?
Stacey Cunningham
We work closely with them, and we’d like to see that we have appropriate regulation. Certainly, there are a lot of very well-intended rules out there that, when we hear from our issuers, it’s very, very costly to comply. If you’re a small to midsize company, you’re better off — sometimes, you could consider that you might as well go after private capital so that you don’t have to deal with those, and we want to make sure that’s not a barrier.
Emily Stewart
Do you mean, for example, the pay ratio disclosure rule [that requires companies to disclose their CEO’s pay compared to their median worker’s pay]?
Stacey Cunningham
Yes, things like that, or conflict minerals disclosure [which required companies to tell investors whether their products contained tantalum, tin, gold, or tungsten mined from the Democratic Republic of Congo]. We saw some movement on that front this past year. It’s very well-intended regulation, we certainly want that goal and share that goal, but we heard from companies that it was so hard for them to track all the way down to their end sources and that it became very expensive.
Emily Stewart
Well, that was scrapped, right?
Stacey Cunningham
Yes, that was one of the first things that we saw out of the Trump administration. It was actually acting SEC Chair Mike Piwowar that took some movement on that front.
Emily Stewart
What is your take on the pay ratio disclosure rule? My sense is that companies are complaining about having to do it, but don’t they presumably know what they’re paying their workers?
Stacey Cunningham
I think a lot of these things seem really straightforward, and it’s not until you’re actually implementing them that you realize how complicated they can be. That’s really where we’re focused — whether it’s on rules that govern listed companies or rules that govern trading in their securities, we want to make sure that the complexity of complying doesn’t outweigh the benefits.
Emily Stewart
To shift a little, there’s this reticence among millennials, among people who watched the financial crisis, to invest. What’s the case for putting your money into publicly traded companies?
Stacey Cunningham
Investors today have more to invest than they have ever had before. They have more choices than they’ve ever had, if you look at all the different corporations that are out there than they can invest in. They also have a whole suite of ETFs (exchange-traded funds) that they can invest in, and ETFs give them a way to, at a low cost, invest in asset classes that they couldn’t have, whether it’s currencies or different fixed-income products that it might have been hard for them to trade before. So there’s just so much opportunity for them to, in a very low-cost way, have access to grow their savings and plan for their retirements.
Emily Stewart
In February, when there was a sudden surge of market volatility, there were those inverse volatility products that were essentially wiped out in a matter of hours. Some investors who had money in those products didn’t understand what they were getting into. Do you think the necessary market safeguards are in place right now? How would you advise someone who’s thinking about investing to watch out for their money?
Stacey Cunningham
Not all products are created equal. The two that you referenced from February actually are institutional products. Many retail clients aren’t allowed to trade those products because they aren’t designed as retail products, and while they did lose a lot of their worth on February 5, they recovered very rapidly too, because they are institutional-based products, meaning large investors typically are buying those and not individuals like you or me.
I wouldn’t see much of an issue there. In fact, in February, there was a lot of volatility in the market, but the markets performed really well. The numbers were really big, when you looked at how much the Dow Jones Industrial Average was down, but on a percentage basis, they weren’t really significant moves in the market. And the market had been up so dramatically in the prior months, it’s helpful to let a little steam out of the market at times.
Emily Stewart
One of the things I look at a lot at Vox is stock buybacks and whether or not that’s how companies are spending their tax savings in comparison to hiring workers, raising wages, investing in their businesses, etc. What do you make of this tension between the common man looking for a raise and the investment class benefiting from these stock buybacks?
Stacey Cunningham
To the extent that the retail investor is invested in the market, those buybacks are helpful for them also. The markets are here for investors across the board of all sizes, and if a company is investing in its own security, that benefits their shareholders too. And to the extent that they have Main Street shareholders, it is helpful for them.
Emily Stewart
What do you make of how the markets have digested the Trump administration? Before the election, a lot of experts were predicting a Trump win would mean the markets would be crazy, and they haven’t been.
Stacey Cunningham
Volatility in the market has shifted over the past couple of years, and the market doesn’t always react the same way it would have historically. We’ve seen some unexpected things. I remember one day when there were missiles flying over Japan and there were bombings in the London subway, and the market was as calm as could be. That’s unusual; that’s not, typically, how the market would have reacted. So there is a little bit of a different dynamic in how the market’s reaction to political events.
Emily Stewart
I think that’s what I wanted to cover. Is there anything else you’d want to add?
Stacey Cunningham
It’s interesting to sit here in this seat at the crossroads of finance and technology because those are industries — and we talked about gender a bit — that are predominantly male-dominated, and when you look and see how we are advancing that conversation, I think it’s really important for everyone to follow their passion, regardless of what the industry it is, and be successful.
When I look at the New York Stock Exchange and how we’ve changed so dramatically over the past few years, people don’t realize it. You look at 2017, 86 percent of the money that was raised to support technology companies through the initial public offering process was raised on the New York Stock Exchange. If you go back a few years, that number wasn’t anywhere near that.
We continue to change as a company. We have listed on the New York Stock Exchange the pillars of the economy that started, when you look back at companies like General Electric and others that really started the growth of this country, to sophisticated technology companies globally like Alibaba, which listed on the New York Stock Exchange, or Spotify more recently. It’s certainly a spectrum.
Emily Stewart
One more question. You mentioned some of the companies that listed with you — another of them is Snap, Snapchat’s parent company. They went public with the NYSE with a unique shareholder structure that basically doesn’t give investors voting rights, which has been controversial. Do you anticipate more of that, with companies going public with structures where shareholders don’t get much of a say?
Stacey Cunningham
There’s a lot of debate around the merits of dual-class voting structures, and one of the things we hear a lot is we want to make sure that we’re not putting in too stringent of rules so that companies choose to stay private. Because if companies choose to stay private, nobody gets to invest in them. We don’t want to drive them to other markets, but we do want to have the appropriate balance of shareholder rights as well as incentives to access the public markets.
