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In the Nation's Interest

2017 Awards Dinner Spotlight: Ronald P. O’Hanley

by CED August 15, 2017

Ronald P. O'Hanley is the President and CEO of State Street Global Advisors and the Vice Chairman of State Street Corporation. You can view his bio here. He is the recipient of the 2017 CED Leadership Award. 

Has your company spearheaded a particular philanthropic or societal initiative that you would like to share?   

Accompanying State Street’s privileged position as one of the world’s largest asset managers is the responsibility to steward those assets to help ensure long-term value creation.  As part of this stewardship, we have sharpened our insistence on increased gender diversity on corporate boards and on more women in leadership roles in the companies we own on behalf of our clients. This push was symbolized powerfully by our Fearless Girl statue in lower Manhattan. Despite the fact that research demonstrates that gender diversity at the senior leadership levels leads to better decision making, stronger corporate results and benefits to the economy[1][2][3][4], we still see many companies lagging, and we are committed to improving that.

This effort is part of our broader asset stewardship, with emphasis on environmental, social and governance (ESG) issues. Through this lens we promote positive outcomes over the long run – both for our clients and society as a whole. We advocate for effective, independent board leadership to ensure that a long-term strategy is articulated and that management is held accountable for executing it. This involves achieving the right skill sets as well as a diversity of views, and increasing the number of women on boards is an important element in breaking through group think. We see gender diversity as a critical component to board quality and, ultimately, driving sustainable value. But we have also called on our portfolio companies to incorporate environmental and social sustainability issues into their long-term strategy. 

Other important areas we focus on, with implications far beyond our immediate business, include partnering with policymakers to expand access to retirement savings programs to help more Americans save for their futures, and partnering with regulators on market structure reforms that promote stable, resilient global capital markets.

Among past and present business executives, is there one in particular whose leadership you especially admire?

A good friend and long-time mentor passed away in June. The lessons I learned from Frank Cahouet, former Chairman and CEO of Mellon Bank, were many and wide-ranging. We first met in 1992 when I was at McKinsey, and Mellon was purchasing a subsidiary of my client. Soon after the transaction closed, Frank asked me to help him at Mellon and a few years later hired me to run a small business unit at Mellon. In the years that followed I learned countless invaluable lessons in business, leadership and ethics, while working with him and long into his retirement.

Frank helped me understand the importance of diversity of thought to effective leadership. Frank surrounded himself with an extraordinary breadth of people and opinions. Never without his own opinion, Frank nonetheless tapped a diverse network internally and externally as he charted new directions and actions. Additionally, as he was building his teams, he was not afraid to take a chance on people with high potential, regardless of tenure or the organization chart. He believed that will and the innate desire to succeed could often overcome lack of experience. He took calculated risks on people – indeed, I am one of those people upon whom Frank took a chance. I firmly believe that if more leaders adopted Frank’s mindset in this regard, it would go a long way in helping to break down some of the barriers that have prevented greater diversity in leadership and board roles to date.   

What advice do you have for those who aspire to careers in leadership, or have just started to serve in a leadership capacity?

Be bold. I mentioned that Frank Cahouet taught me to take calculated risks on people. But this idea extends beyond building strong teams. It means that you must be willing to speak up or take action to put forth a new idea or approach. You have to be bold in tackling big, complex projects. And, then, if things don’t go as planned, identify a new solution and try again.

Another piece of advice: Be empathetic. Don’t get so buried in your role as a leader that you become disconnected from the pain points and needs of the people your company is serving. In a prior role, before State Street, we were trying to understand why a particular process was so challenging for clients and so frustrating for employees. Rather than hire another consultant, the most senior leaders at the firm all stepped away from their desks to hear directly from employees their ideas for solving the issue. Then we walked through the entire process – starting where the customer first made contact with the company, then to the operations center, the mail facility, the call center.  Doing this walk through and hearing employee perspectives helped bring the problem to life and speed progress toward a solution in a way that just going through a slide deck could not have matched. 

Finally, solve the problem before hunting for the guilty. Too often more time is spent ascribing blame rather than doing the right thing. Solve the immediate problem, identify root causes, and develop and implement a permanent fix. More often than not, those that were to be assigned blame will turn out to be a major part of the solution.

[1] “Why Diversity Matters,” McKinsey, Feb 2015

[2] “Women on Boards: Global Trends in Gender Diversity on Corporate Boards,” MSCI, Nov 2015

[3] “Is Gender Diversity Profitable?” Peterson Institute for International Economic, Feb 2016

[4] Darren Rosenblum, Daria Roithmayr “The Effect of Gender Diversity on Board Decision-making: Interviews with Board Members and Stakeholders,” The Conference Board, January 2017.