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Lawyers at New York Life give high ratings to general counsel Sheila Kearney Davidson. Rate the management New York Surveyof your law department Life Insurance Averages Very Poor 0 % 4 % Poor 3 8 Average 3 20 Above Average 48 44 Outstanding 45 24 He day after Sheila Kearney Davidson took over as general counsel of New York Life Insurance Company in May 2000, she called a staff meeting. As her lawyers nervously filed into the room, she booted up a PowerPoint presentation. It listed just a few agenda items: hours, office relocations, and dress code. When the “hours” slide popped up, Davidson briskly ran through its three bulleted points: “My philosophy on hours is informed by my situation.” Click. “I have a 24/7 job.” Click. “I have a demanding boss.” Click. The next slide, however, wasn’t the org chart everyone expected. It was a snapshot, with a simple caption: “The Boss.” And the smiling subject wasn’t the insurer’s chairman, Seymour Sternberg. Instead, a sturdy, blond toddler beamed down from the screen: Davidson’s son Andrew. After the laughter faded, the GC outlined her philosophy on office hours: 9 to 5, subject to “client demands, personal demands, good manners, and common sense.” The rest of the top attorney’s marching orders? Fridays would be casual dress year-round, and everyone would soon be moving to the tenth floor so they could sit together. Davidson’s maiden presentation to her lawyers is something they still remember in detail because it revealed several things about their boss and her management style. Davidson, they say, is a down-to-earth, “regular” person with a good sense of humor. And family is a top priority. Law department colleagues say that the 41-year-old Davidson, taking over from an older, more traditional, male GC, has made the department more family-friendly, eliminating “face time” and encouraging her staff to use the company’s generous work-life benefits, such as sabbaticals for new parents and an emergency, on-site day care center. tough love But while Davidson is very progressive in those areas, she’s also a traditional, no-nonsense boss in other respects. In that first presentation, it was no mistake that “client demands” topped her list of priorities, not “personal demands.” The message: An employee’s private life should be respected, but clients’ needs come first. Davidson doesn’t tolerate excuses, either; her lawyers say she can be painfully direct if their work isn’t up to par. “Sheila does a good job of keeping people challengedand kicking them in the butt if that’s what’s required,” says associate general counsel Mark Gomez. “But,” he adds, “she would never ask you to do something she wouldn’t do herself.” The data Corporate Counsel gathered in our 2002 Quality of Life Survey supports staffers’ comments. Ninety-three percent of respondents from the Manhattan-based company gave Davidson’s management above-average ratings. They also rated departmental collegiality highly (84 percent awarded high marks)an area that’s heavily influenced by the GC’s tone. This doesn’t mean there were no complaints among the New York Life lawyers. They gave the department mediocre ratings on opportunities for advancement (only 39 percent of respondents awarded high marks), and complained about administrative headachesfor example, too many meetings. But the survey data, naturally, tells only part of the story about the department and its leader. In person, the tall, broad-shouldered GC projects an air of unflappable confidence. According to colleagues and friends, Davidson’s self-assurance comes, at least in part, from her strong moral convictions. Davidson relishes her GC role, she says, because “I help people do the right thing.” This ethical bent has been with her for years. Davidson describes herself as the product of “a long line of Irish cops,” with a respect for following the letter of the law. Her sense of right and wrong, she explains, was instilled at Catholic primary and secondary schools. Coworkers say she’s tough on herself, paying for any company expense, such as cab fare, that might fall into a moral gray area. As one of her lawyers, who had a similar Catholic education, puts it: “We were taught that you follow the rules not just because they’re there, but because it’s the right thing to do.” Davidson earned her law degree at George Washington University, graduating in 1986. Although she started out as an attorney at Shearson Lehman, she abandoned that path after a year to take an enforcement job with the National Association of Securities Dealers (NASD). Good Timing The New York Life GC started at the company in 1991; her timing could not have been better for someone with her background. In the early 1990s the insurance industry was rocked by a series of scandals arising from agent misconduct. As a result, Prudential Insurance Co. of America agreed to a settlement that amounted to an estimated cost of $1 billion to that company. New York Life, which ranks among the top ten life insurance providers in the country and has over $100 billion in assets, wasn’t unscathed, and agreed to a $65 million arbitration plan with disgruntled policyholders. In the wake of the scandal, cleaning up agents’ behavior and instituting monitoring systems was essential for every insurance company’s survival. An industry observer, Michael Cohen of the insurance rating agency A.M. Best Company, says that New York Life worked very hard back then to implement strict sales and monitoring procedures, and that Davidson was at the “center of the action.” After starting out as the junior lawyer with the multidisciplinary group that set up the insurer’s compliance program, Davidson surged up through the ranks. In 1997 New York Life made her the head of corporate compliance, where her work is reported to have impressed then-chairman Harry Hohon and the board. “The audit committee fell in love with her,” recalls vice president and deputy general counsel Patrick Connolly. “She just totally revamped the compliance department.” She was appointed general counsel in May 2000 and last year was named to the insurer’s executive management committee. It’s been an extraordinarily speedy rise at a company where rapid ascents are rare. Although they’re not about to say anything critical on the record, colleague after colleague says that Davidson’s success is due to her intelligence and competence. Davidson, for her part, says that her rise was partly due to sheer luck. Her high profile within New York Life has helped her lawyers win respect throughout the organizationand from senior management. Sternberg, New York Life’s chairman, says he appreciates her willingness to “stand up to him” and deliver bad news. “I’m more aligned with Sheila [than I was with her predecessor],” he says. What he appreciates most, Sternberg says, is her ability to balance business goals and ethics: “She’s been able to find that sweet spot.” No Room to move? But Davidson still has her critics. The loudest complaint voiced by New York Life’s lawyers is about lack of opportunities for advancement within the department. Only 39 percent of survey respondents gave overall opportunities for advancement above-average marks. This is the same as the survey average, but it’s a huge drop from the response in 2001, when 71 percent of New York Life lawyers gave advancement opportunities above-average marks. Those giving high marks to promotion opportunities for women dropped too, from 84 percent to 60 percent this year (versus the survey average of 77 percent). Company policies are partly to blame for some of the discontent. New York Life has promotions once a year. Davidson made several staff-pleasing “off-season” promotions shortly after taking over as GC, but few occurred since then. Davidson acknowledges the problem but says much of it is beyond her control. A basic reality of in-house practice is that happy people stay put and end up crowding the senior jobs, she says. Davidson’s solution? She urges lawyers to consider leaving the department “comfort zone” for other areas of the insurer, as she temporarily did herself, when she left legal to head up the compliance division. Gripes or not though, hardly anyone in Davidson’s department seems to be making getaway plans to another company. Of the 28 New York Lifers who told us where they’d like to be in five years, only one person professed a desire to work elsewhere. The GC, it seems, is making her mark.

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