IN FUTURES FIELD, SHE MADE LEAPS
Mary McDonnell has been a key player as electronic trading reshapes the industry, but she's an island in a sea of male execs
By Susan Diesenhouse
Tribune staff reporter
Published April 9, 2006

At a lunch in February for 40 Chicago futures industry leaders, Mary McDonnell realized she was the only woman in the room.
"Holy smokes, is this 2005 or 1980?" wondered the 50-year-old president and chief executive of Geneva Trading USA LLC. 

McDonnell said that during her 28 years in the financial futures business she hasn't bumped up against a glass ceiling. Certainly, the industry has several other women in such key executive positions as general counsels and chief operating officers.

But in the highest ranks of the rapidly growing and changing financial derivatives business, McDonnell is one of the few women who has reached and remains at the pinnacle.

She has made her mark through perseverance and by promoting the electronic trading revolution that has fed explosive growth in trading volume and led to recent consolidations among exchanges.

McDonnell has earned her high perch.

"She's smart enough to determine when there's a problem and tough enough to make people listen," said Scott Early, an attorney who was once the general counsel for the Chicago Board of Trade, where McDonnell also worked.

She would like to see more women join her. But when Geneva, one of the city's major proprietary trading firms, wants to fill a job on its trading staff, one woman applies for every 40 men.

"It's dreary," she said.

An only child raised in a northwest Chicago neighborhood, Mary Margaret McDonnell always knew she would end up in the financial world.

She was adept at math. As a youngster she read the stock tables with her father, James, who directed security for Harris Bank, "the kind with guns," she explained. McDonnell earned a bachelor's degree in accounting from Marquette University and an MBA from the Kellogg School of Management at Northwestern University.

In 1977, she joined the Chicago Board of Trade as an auditor. Two years later, she became the chief financial and operating officer at Griffin Trading Co. In 1996, she was offered a job as an executive vice president helping to launch the Bermuda Commodities Exchange, an early Internet-based, all-electronic exchange for trading catastrophic reinsurance risk.

She traded in the old job and her boyfriend for life on a sun-splashed island.

"It was a huge leap," McDonnell said during an interview at her offices--sleek and spare and adorned mostly with family photos. "I'm not a big risk taker, but I was in a rut: the same job for 17 years; dating the same guy for 10 years."

Ensconced in an aquamarine world, McDonnell decided it was time to fulfill another long-held aspiration.

"I had always wanted children" she said. "I was in my 40s, there was no man around, and a friend had just adopted a baby from Russia."

More eager than experienced, she leapt into motherhood, adopting two sibling babies who were 23 months and 5 months old. "I had never changed diapers and had no clue what to do," she recalled.

In October 1999, a soft market for catastrophic insurance led the Bermuda exchange to close shop.

McDonnell didn't mind leaving the high-cost island with "bugs as big as cats." She came home and joined the staff of the Chicago Board of Trade to help launch a new electronic trading system and soon rose to senior vice president.

"They looked at her to do a big job because she has integrity and knows everyone," said Christopher Hehmeyer, who is co-chairman of Goldenberg Hehmeyer & Co., a futures commission merchant.

But she wasn't always well received, especially by pit traders who saw the inexorable expansion of electronic trading as a threat to their livelihood.

So tense was the atmosphere that one day as she walked through the exchange floor, "some people I'd known for 20 years spit on me," she said without bitterness. "Low and behold, look what's happened. Electronic trading is a success."

Three years ago, she landed her current post at Geneva, which trades futures in stock indices, commodities, currencies and fixed-interest rate and energy products on several major U.S. and European markets.

Founded in 1999 by H. Arthur Brereton and Thomas Freytag, both still active traders, it employs about 100 people who work at its Chicago headquarters and in its Dublin and Gibraltar offices.

McDonnell declined to state the revenue of the firm that trades only on its own behalf.

"It's on the short list of the city's major proprietary trading firms," said Ben Van Vliet, who lectures on finance at the Illinois Institute of Technology.

Now living 10 minutes from work, McDonnell can stay on top of fast-moving markets and ferry her children to gymnastics and Irish step-dancing classes.

"But I'm no martyr," she said. "I've always had full-time help."

Risks in fast, large orders

For all its pluses, electronic trading also has minuses. Since it's now faster, easier and cheaper to place large orders, "sometimes big traders can move markets for no fundamental economic reason," she said. At some point, she said, "firms and clearing houses could lose tons of money."

Meanwhile, as the growth in revenue and trading volume has helped spur exchanges that were once member-owned non-profits to transform into for-profit businesses, they have attracted new partners and investors. But when investors are also major exchange customers, that could undermine corporate efficiency, McDonnell said.

"If owner/users can sway votes, will they focus on the institution or their own interests?' she asked.

Shift may lure more women

On the gender imbalance, relocating the action out of the trading pits where the tallest, broadest, loudest person can have an advantage and into offices may help attract more women, said Carol Burke, a former general counsel at the Chicago Board of Trade.

As the locker-room mentality of trading floors gives way to "a more cerebral and intentional environment, more women will migrate to the industry if it tries to recruit them," Burke said.

However, it will be a long haul to boost the number of women, said Patricia Lunkes, a longtime human resource consultant to financial firms here. Although she has no statistical evidence, she estimates that only a handful of women are chief executives in big local firms.

"My impression: that's fewer than 15 years ago," she estimated.

Meanwhile, the trade group Futures Industry Association was unable to estimate how many women chief executives fill its membership roster. At its recent convention in Boca Raton, Fla., attended by more than 800 guests, its many panelists were mostly men.

But as far as McDonnell is concerned, anyone can thrive in futures if he or she is at ease with stress, risk and a fast pace.

"It's critical to be able to think on the run," she said.

As the single mother of two youngsters, she has likely honed that skill.

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