Name: TIAA CEO “couldn’t be more thrilled” to hand the reins to Thasunda Brown Duckett
Uploaded: 2021-04-15
Duration: 14 min 48 s
Description: Roger Ferguson reflects on his legacy, addresses rumors about being the next Fed Chair, and more.

Roger Ferguson reflects on his legacy, addresses rumors about being the next Fed Chair, and more.

TIAA CEO “couldn’t be more thrilled” to hand the reins to Thasunda Brown Duckett

Leadership

TIAA CEO on handing the reins to Thasunda Brown Duckett

Watch: TIAA CEO “couldn’t be more thrilled” to hand the reins to Thasunda Brown Duckett

roger. So great to see you again and to talk about all the news that your company, T I. A. You know, you surprised a lot of people when you announced plans to retire at the end of this month. You've been such a successful ceo at T. I. A. Building the company into a financial powerhouse. And then shortly after that you made history when you announced your successor to Shonda Brown Duck. It this is the first time that A T. I. A. Will be headed by a woman in its 100 year history and this is the first time in Fortune 500 history that a black Ceo namely, you named a successor as another black executive. So what is the significance of all of these milestones right now and twice to shun the Ducat the right person for the job, Susie, thank you so much for inviting me and giving me this chance ever conversation. So, first as to my retirement, I recognize I'm actually very fortunate to be able to talk about and move on to retirement. Not everyone can do that after 13 years, it was clear to me that was really time to hand the reins over to another leader. Uh I've seen this company through two different crises, 1st 2000 and 8, 2009 and then, you know, 2020 with the pandemic, so it's time to move on with respective to Shonda Brown Duckett. Uh let's start with the fact she is a wonderful business leader. She has had a great deal of experience that Jpmorgan Chase, um and she has phenomenal skills as a person leader as well. Uh In addition, I'd say that our own story is one that resonates in terms of focus on financial security and retirement security in particular. Um and so I'm very, very thrilled to have her come on as my successor as to the history element of it. Um Yes, we are proud to be part of history. You know, we're the first company, as you say, they have a black ceo succeeded by another individual color in the CC in the ceo seat. Um and we are only the first company to have three black ceos if one includes. Uh my iconic predecessor, Clifton Ward, is certainly one should, but at the end of the day, this is really a story about talent uh and finding the right leader for this company at the right time. And I couldn't be more thrilled. Well, you know, when we talked last summer and it was right in the aftermath of the George Floyd tragedy, I asked you how our Ceo two are promising that they're going to build diverse workplaces. How are they going to achieve that goal? And you said to me in very simple, candid terms, they have to be intentional about hiring women and people of color for leadership role. And now it's almost a year later, we see that besides to Sanders rise at T. I. A. Walgreens, New Ceo is a black woman. Starbucks has a black female chairperson of the board, and CBS's new boss is the highest ranking female Ceo on the Fortune 500. So what's your take on all of this? And do you see this as a beginning of real change? Well, I certainly think it's a start, but there's also a long way to go. Um First and foremost is important for all companies to recognize that it's critical to attract talent from diverse backgrounds so that you have a strong pipeline for future leaders so that more individuals get promoted to the C suite and hopefully the Ceo seat as well. Um and I think more and more companies are coming to recognize the need to reflect the diversity of our customer base as well. So, um I believe that the question of diversity and inclusion are becoming gradually the cornerstone of many companies cultures and if they're not, they certainly should be. I think it's a high priority for business to do that. And what does that mean? What means putting a diversity equity and inclusion at the heart of decision making when it comes to hiring and developing employees and selecting selecting directors and leaders. So, um, now is the right thing to do. Um I think it's it makes good business sense. And as I said, I think we're off to a start, but there's a long way to go. Well, you've been advocating this for such a long time and recently you wrote an op ed, teeth for fortune. Uh the title, I'm a Black Fortune 500 Ceo. Here are four principles to guide companies in combating systemic racism. Can you give us a quick description of those principles? The first principle that I talked about in that article is what I call your own, your own part, which is to say, you know, companies themselves have to make sure that their houses are in order when it comes to attracting, retaining mentoring and promoting people of color and women. You don't have credibility if your own shop is not in order. Uh, the second principle I put forward was that the CEO has to own this himself or herself. So it's not enough to look to your people either say gee, what are you doing? The CEO has to speak forcefully and consistently and take actions that are consistent with those words around diversity and inclusion. The third principle was empowering your people. Um, so many decisions about assignments, promotion, selection, mentoring are done, you know, down the organization far from the Ceo and so it's imperative for the company to train and prepare all of their individuals, all of their contributors on how to be good leaders in a diverse culture and my own company. We have a training called a Journey to inclusion. And finally, uh I talked about strengthening communities. Companies do not exist in a vacuum. You know, they hire from the local community, they get support from local community. Uh and so it's important to think about diversity and inclusion and a broader social context in and around the company itself, in in the community. And while we've seen some progress on these sorts of things in corporate America still, when you look at most corporate boards, uh most of them do not have a black director on the board. And I understand that TIA is using its voting power uh, as a shareholder to change that. Can you tell us what you're doing? And is it working well? You're certainly right that as a, as a large investor, T I A. Ahold shares and numerous publicly traded companies, I don't think it is working. So as an example, a few years ago, we decided to actively engage talk to companies that had no female representation on their boards. And we identified about 450 companies in the us Where that was the case just a few years ago. And I'm pleased to say that, um, as of today, over 325 of those companies, roughly 75 have added at least one woman to the board. So I think it is working, uh, similarly, we've started to have discussions with companies where there are no people of color on the board and we've given them, you know, an ample warning that we intend over time to watch closely what they're doing. And if we don't see progress, we will vote against the chairs of the nominee gulf committee or maybe against the independent lead director if need be to make sure they start to take action on this broader kind of diversity at the board table. So you're basically sending a warning. Do you think that's going to work? We are seeing your warning. And yes, we do think it's going to work. Look, we know that there's ample talent out there, uh, female talent, people of color. Uh, and so it's important that boards have the incentive and know that the shareholders are watching when it comes to bring university into the board table. And there's ample evidence that diversity at the board table is not only the ethically right thing to do, but it may well be related to improving outcomes from the standpoint of shareholders. Let's talk a little bit now about the economy and the market. We've been seeing stocks hitting new records, one blockbuster rally after another. And this is happening even though millions of people still don't have jobs. I'm sure this is a confusing time for investors. And your clients must be calling Tia to say, what should you be doing with our portfolios? What are you telling them what we're saying to our participants? Our clients is threefold. First invest for the long term, Have a long term goal in mind. 2ndly, do not panic. Do not trade or, or take action based on emotion. And the third thing is periodically do take a look at your portfolio and see if it still reflects your risk tolerance. And maybe with the help of an adviser, think through, uh, is a time to do a do a rebalancing. And so I think there's some relatively simple approaches that we hope all long term investors take to avoid some of the volatility and hopefully avoid loss. Is it possible you've also been saying some optimistic things about the economy? Are things really that good? Because we're still in the middle of a pandemic and there's so much uncertainty about what could be coming next? Well, we think things actually are improving and maybe accelerating very very quickly. Um, and I think that's been a surprise to many economists and many market analysts. What's driving this? It's pretty straightforward two things. One is a new stimulus package that by the administration came in and quickly got through Congress at $1.9 trillion US. is picking up steam and creating your greatest sense of optimism. And so all the economists that I've talked to are rapidly marking up their expectations for U. S. Growth and maybe even global growth for the rest of this year. Let me follow up on that because still higher interest rates, higher inflation are big worries for many people. What do you think of how the Federal Reserve is managing the economy after all, you've served as vice chair of the Fed for many, many years. Uh is the Fed making the right moves right now? I think they are. Um if one thinks back uh to how aggressive they were at the beginning of the pandemic and and the downturn that was associated with it. You know, they cut interest rates and importantly they went back to the tool and brought out a number of new tools to directly support households and businesses and different parts of the market. I think they've done that quite well. They also recognize that inflation dynamics may have changed and so it's somewhat technical, they've adjusted their their framework for thinking about inflation. I think that's been well received. So I give my my former colleagues entrance the Fed very high marks for how they managed through this crisis today. What concerns you most about the financial well being of the American people? And you mentioned the stimulus program just a moment ago, how much are those $1,400 stimulus checks? Really helping? I think the evidence is that they absolutely are helping for some people. Uh It turns out that that will help them pay down debt. And so we've seen the household debt level go down for others. It is allowing them to make ends meet on a month to month basis. Um And so I think one of the reasons that the economy is not in worse shape is the existence of these stimulus checks. Um and so, you know, count me a supporter of the efforts made thus far. Roger. Let's talk a little bit about you. You've had a remarkable career. You've been a lawyer and economist, Fed policymaker. And 13 years as ceo of T. I. A. What's your proudest achievements? Yeah. I think my proudest achievement vis a vis my most recent job is helping to get this company through to what should have been once in 100 year crises, first, the great financial crisis in 2008 2009, and then most recently, you know, the pandemic, the racial justice crisis and the economic downturn Of 2020. And I'm proud of how well the company performed. Uh and that we have come through this with financial stability, ample capital, uh good risk-based capital ratios, which is a more technical term. Uh and overall I think we've done quite well and better than perhaps some would have thought. Mhm. Well, you have accomplished so much in your long career. What do you want people to say about your legacy? Well, I hope they say that I built a bedrock in this company that would allow to be prepared for the next 100 years. Obviously not everything is perfect, no human being is allowed to do that. And I really hope they say that, you know, whatever the ups and downs may maybe you know, that our values continue to show through. Uh and that the legacy of the roger Ferguson tenure T. I. A. Is that we continue to be a mission driven, values based organization. You say you're retiring and then you're very quick to add that you're going to be very active. What is next for you? What's on your to do list? Well, uh, several things on my to do list, Susie, and you're right to say that I'm retiring from this job, I'm not leaving the labor force, so I want to stay very focused in on corporate governance and I will be on a number of boards. I want to talk about the need to have inclusive capitalism. I think that's really, really important. Um financial literacy and actually financial innovation. Maybe work with some younger people on, on Fintech, it's something I'm eager to do. And then I hope to at least have occasional comments around, you know, sort of policy, the economy, um, you know, have a chance to just reflect on the, on the state of the world in some way that might be helpful. Well, there's been a considerable speculation that President biden will ask you to join his administration. How does chairman of the Federal Reserve sound to you? Uh, as you know, Jerome Powell's term as set share ends next year. So with that interest you, uh, jay Powell and I have been friends and and and colleagues for a period of time and I think he's done a remarkable job as to whether or not, you know, I have a role in the biden administration at some point in the future. You know, frankly, that's really totally up to them. You know, I've got a portfolio that I'm developing right now and we'll just let this all play out over time. Yeah. But if asked, would you accept? I mean, besides being so qualified for such a job, you would make history. You would be the first black set share ever. You know, one of the things I've learned in life, Susie is you never accept or reject the job that you haven't been offered. And so we'll just let time play out and we'll see how things unfold.