William H. Donaldson, who made an early fortune as a co-founder of the modern securities agency Donaldson, Lufkin & Jenrette and later pushed for tighter monetary regulation as chairman of the Securities and Exchange Commission within the wake of the Enron and WorldCom accounting scandals, died on Wednesday at his residence in Westchester County, N.Y. He was 93.
The trigger was leukemia, his son Adam mentioned.
Mr. Donaldson additionally served briefly as an underneath secretary of state underneath Henry A. Kissinger, headed the New York Stock Exchange and was chief government of the insurer Aetna Inc.
In 1975, he was named the founding dean of Yale University’s School of Organization and Management, now generally known as the School of Management, whose mission of coaching leaders for each enterprise and authorities was exemplified by his personal zigzagging profession.
Mr. Donaldson was solely 28 and a yr out of Harvard Business School in 1959 when he joined two mates, Dan Lufkin and Richard Jenrette, to discovered a securities agency bearing their names and generally known as D.L.J.
The three younger males seen that mutual funds and different institutional traders have been accounting for a bigger share of inventory market buying and selling. They believed that these skilled traders would welcome extra subtle analysis than was usually produced on Wall Street. D.L.J. centered on the shares of smaller, up-and-coming companies fairly than slower-growing blue chips.
Mr. Donaldson served as chief government because the agency expanded quickly and diversified into fund administration in the course of the “go-go” inventory market growth of the Sixties. In 1970, D.L.J. upended a Wall Street custom by providing its personal shares to the general public. Other securities companies quickly adopted, opening up a badly wanted new supply of capital for the personal partnerships that had lengthy dominated Wall Street.
In 1973, The New York Times known as Mr. Donaldson “considered one of Wall Street’s best-known whiz youngsters.”
That identical yr, feeling stressed, he whizzed off to Washington to work for Mr. Kissinger within the State Department. He resigned from that publish about eight months later after discovering himself slowed down in bureaucratic trivia, missing affect on coverage and infrequently in direct contact with the globe-trotting secretary of state.
But his public service wasn’t over. He was briefly an adviser to Vice President Nelson A. Rockefeller within the mid-Nineteen Seventies. President George W. Bush appointed him chairman of the S.E.C. in 2003.
The fee was underneath hearth on the time for showing too lax in its watchdog position. After the inventory market growth of the late Nineteen Nineties, Americans have been shocked and angered to study that the vitality agency Enron and telecommunication-services supplier WorldCom had used accounting trickery to inflate their reported income. Congress was decided to crack down and approved an even bigger price range for the S.E.C.
Mr. Donaldson, a reasonable Republican, usually sided with Democratic commissioners fairly than these of his personal get together when voting on new laws. Republicans and enterprise teams mentioned a few of his concepts, akin to imposing tighter regulation on hedge funds, would increase prices needlessly. Faced with this backlash among the many commissioners, he introduced his resignation in June 2005, a bit over two years after his arrival.
William Henry Donaldson was born on June 2, 1931, in Buffalo. His father, Eames Donaldson, a Yale-educated engineer, co-founded a machine-tool enterprise that collapsed in the course of the Depression, then took “a collection of not-very-lucrative jobs,” his son wrote in 2018 memoir, “Entrepreneurial Leader: A Lifetime of Adventures in Business, Education, and Government.” His mom, Guida (Marx) Donaldson, managed the family. Mr. Donaldson described her as gregarious however tormented by durations of melancholy.
William Donaldson was a scholarship pupil on the personal Nichols School in Buffalo, the place he performed varsity hockey. He began a short-lived humor journal, Read ’Em and Grin, primarily utilizing jokes cribbed from different sources and promoting advertisements to native retailers.
He had additionally proven entrepreneurial instincts as a teen, creating the grandly named United Enterprises to provide pupil labor for such duties as home portray and garden care.
As an undergraduate at Yale, Mr. Donaldson majored in American research and befriended members of the Bush political clan. He was enterprise supervisor of The Yale Daily News and a member of the unique Skull and Bones secret society. After graduating, he enlisted within the Marine Corps, earned a fee as a second lieutenant and served in varied places within the United States and Japan.
“When I received out of the service I used to be satisfied that helicopters have been the wave of the long run and that everyone was going to have one of their storage,” he mentioned in a 2002 oral historical past for Harvard Business School. After failing to discover a management-track job within the helicopter trade, he joined the Wall Street agency G.H. Walker & Company, run by members of the Bush household.
Around a yr later, he enrolled in Harvard Business School, the place he discovered that case research of enterprise issues sharpened his capability to ask probing questions. He returned to G.H. Walker after finishing his M.B.A. diploma in 1958. Soon he was speaking with two different Harvard Business School graduates, Mr. Lufkin and Mr. Jenrette, about beginning their very own agency.
Once D.L.J. was up and working, Mr. Donaldson wrote, the founders taught themselves to do inventory market analysis with an “investigative mind-set.” Rather than simply speaking to executives, they sought enter from prospects, suppliers and others.
The Equitable Life Assurance Society acquired D.L.J. in 1985 for about $430 million, and it was later absorbed into Credit Suisse.
In the mid-Nineteen Seventies, Mr. Donaldson tried to purchase The New York Post, solely to see it offered to Rupert Murdoch. Kingman Brewster Jr., then president of Yale, supplied an alternate by recruiting Mr. Donaldson to create a administration faculty. He served as its dean till 1980, selling the concept of mixing public service with enterprise careers.
“I feel the traces between the personal and public sectors are blurring increasingly,” he advised The Times in 1975. “Business has to interface with authorities more and more, and authorities is increasingly concerned with enterprise. It’s only a truth of life, and never essentially unhealthy.”
In the early Nineteen Eighties, he created an funding firm, Donaldson Enterprises, and briefly campaigned to grow to be the Republican nominee for governor of New York in 1982. “It was a time when the Republican Party was more and more on the far proper, and I wasn’t there, particularly on social points,” he advised The Journal News of White Plains, N.Y., in 2005.
The New York Stock Exchange, dealing with harder competitors and declining income, recruited him to be its chairman, beginning in January 1991. During his time period of about 4 and a half years there, the change lowered transaction prices and lured some buying and selling again from rivals.
Mr. Donaldson was a director of Aetna within the late Nineteen Nineties when that firm bumped into bother after splurging on acquisitions. In a February 2000 administration shake-up, Aetna’s board appointed him chairman and chief government. He happy shareholders with the sale of Aetna’s worldwide and financial-services companies. He was paid about $19 million in wage, bonuses and inventory choices (about $35 million in at this time’s foreign money) for spending about 13 months engaged on Aetna’s overhaul.
“My compensation was strongly aligned with shareholder pursuits,” Mr. Donaldson mentioned when requested about these funds throughout his S.E.C. affirmation listening to earlier than the Senate Banking Committee.
His first spouse, Evan (Burger) Donaldson, who led a nonprofit adoption service, died in 1994. The subsequent yr he married Jane Phillips, a former admissions and placement director on the Yale administration faculty. She survives him. In addition to his son Adam, he’s survived by two different youngsters, Matthew and Kimberly Donaldson; and three grandchildren. He lived within the hamlet of Waccabuc, a part of Lewisboro, in Westchester.
In the Harvard Business School oral historical past, Mr. Donaldson supplied a tip for all types of leaders: “Why are we doing it this fashion?,” he mentioned, is a query that may be requested about every part.
