CalPERs CEO Marcie Frost on Private Markets & Building Her Career

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Transcript Provided by Kensho

Joseph Cass

Hello, and welcome. My name is Joe Cass, Senior Director at S&P Global Ratings and the host and the creator of the Leaders podcast, formerly the Fixed Income In 15 podcast. On this episode, we have Marcie Frost, CEO of CalPERS; and Martina Cheung, CEO and President at S&P Global. Very quick reminder that the views of the external guests are their views alone, and they do not represent the views of S&P Global. Okay. Thank you so much, Marcie and Martina, for joining me today.

Marcie Frost

Thanks, Joe.

Martina Cheung

Thanks, Joe.

Joseph Cass

Mary, let's kick off with you. Would you be able to outline at kind of a high level what CalPERS is, your career path up to now and your role and responsibilities as CEO?

Marcie Frost

Yes. Thank you. So CalPERS happens to be -- here in the United States, we're the largest defined benefit retirement plan. And that's really important to us, taking care of 2.3 million members here in the state of California, taking care of their financial security.

That mission is really important to the team that works at CalPERS. Not only do we have the defined benefit or the pension plan part of CalPERS, we are also the second largest purchaser of health care besides the federal government, and with about 1.5 million covered lives in that program.

So between the 2, this dual mission organization, they're very complementary missions that truly, health care is really what provides that vital part of a retirement. As you age, you want to have immediate access to health care when you need it.

It needs to be affordable. It needs to be accessible and it needs to be of high quality. And those are the things that we certainly monitor for our membership. I happen to be the Chief Executive Officer here.

I took this role in October of 2016. I came from Washington State, and I worked at the Department of Retirement Systems for about 15 years prior to getting the phone call from the headhunter asking if I might be interested in this opportunity.

That job in Washington put me on the cabinet for Governor Inslee, the incoming governor when I was appointed. And then it also gave me an ex-officio position on the Washington State Investment Board. 

And when I came here in 2016, I left as its Chair. And so my career -- I know we can talk a little more about this in detail if you'd like. But my career has really been more -- I describe it more as this career lattice.

It was never really this upward mobility career ladder. I know we talk a lot about career ladders. But mine was really more where I navigated across organizations because I felt it was really important that I worked for leaders who I respected, leaders who were really looking out for the team that worked for them, not vice versa.

I think that's extremely important. I've also worked for leaders who didn't feel that way. And just getting up in the morning and having that a little bit of dread of coming into the office, that's something I certainly don't want any of the 2,800 team members at CalPERS to ever feel.

We want an environment and a culture where people can thrive, they can bring their best selves and they feel comfortable giving the gifts that they bring into the office. But I did start as a typist, and I worked my way up through the organization. If you look at organizations in terms of an organizational chart, I started down the little bottom box at the bottom of the organizational chart. And then again, in 2013 when Governor Inslee came in, he appointed me to his cabinet and made it possible for me to come to CalPERS.

Joseph Cass

Fantastic. Thanks, Marcie. Martina, welcome back. Could you provide a high-level summary of initiatives from, say, the past 12 months and any growth areas you're excited about in 2025?

Martina Cheung

Yes. Thanks, Joe. And Marcie, congratulations on such a phenomenal career. super excited to hear more about your journey today. So the past 12 months for S&P has been a time of just real excitement and optimism.

And I personally couldn't be prouder to be taking the company forward. Our fantastic CEO, Doug Peterson, retired at the end of October, and I've been in seat since November 1. And Joe, we were quick to get out and talk a little bit about the 5 priority areas for us going forward that we continue to focus on.

Those include benchmarks, energy transition, our data and IP, the way that generative AI can transform that data and IP and our insights and last but not least, private markets. And these are all areas that we've been focused on for many years, and we'll continue to invest and we see incredible opportunity in areas for innovation. And it's a privileged to be able to drive the company forward at this point.

Joseph Cass

Great. Thanks, Martina. Marcie, what are the key challenges facing CalPERS today? And how do you prioritize addressing them?

Marcie Frost

There are always challenges, I think, any institution -- and congratulations, Martina, on your appointment as well. I think the challenges or the primary challenge is just making sure that our members have access to the information that they need to make these really important milestone decisions throughout their career.

But I think the largest challenge for me, and it was a challenge that was here when I was hired, and it's one that I have continued to focus on in the 8 years that I've been here, and that is the funding level of the plan.

And the current funding level, and this gets presented to me every week in a scorecard, and we don't really track funded levels or take action on those funded levels on a weekly basis, but we certainly pay attention to them as the markets return and the portfolio returns what it does to improve that funded level. 

But we're roughly 76%, 77% funded, meaning we have 77% of the assets needed to pay those ongoing liabilities. And that, for me, is the challenge because our members look at that number and they ask themselves, is CalPERS really going to be there at the time that I need it, when it's my turn to retire?

And will those funds be available throughout my retirement, throughout my remaining lifetime. And so that is a challenge, but every challenge can be presented to the opposite and where are the opportunities.

And that's where we bring Stephen Gilmore in, I would say that was a significant challenge as well, it's that turnover in our Chief Investment Officer role. And I think just in my first 6 months with Stephen and throughout his interview process, I have no concern that he's going to be here longer than the 18 months that I've seen some of our previous CIOs stay.

So I think back to challenges, and I think some of that turnover is really based on the public nature of CalPERS. This $500-plus billion fund does get a lot of attention. I wish the attention was more on the financial -- the retirement security side, but it's not.

Frankly, it's not. It's just the interest is really where the portfolio is, how the portfolio is being invested. How are we looking at geopolitical risk? How are we looking at private markets versus public markets.

And there's a lot of curiosity about what CalPERS and the investment team, in particular, are doing with those assets. So for me, it's the challenges, education and communication that there are -- I spend a lot of my time myth-busting.

It's actually one of my favorite parts of the job is to go out and do some myth-busting because you can see the relief that people have when they present this question to you that they have this fear about and then you answer the question with actual facts or data, you can see that anxiety level -- that anxious nature that you see in people, it just comes down nicely.

So finding better ways that we can use our platforms, our communication platforms to ensure that members have accurate information. And I have seen that improve. And particularly over the last 2 to 3 years, I've seen that really improve.

And I think part of that is when you are a healthier plan, people are less concerned and maybe less suspicious about what's happening within the portfolio or within the Board at CalPERS. So the challenge is making sure members are fully educated.

They feel confident that their benefit will be there. And then to the industry and everyone who operates here, primarily here in California, the taxpayer base also knows that CalPERS is doing its very best to invest the assets.

We can hire the team to do this professionally. And we have a Board of 13 trustees who have that oversight responsibility. So very important that the delegated authority that they give us that they can see how that delegated authority is being utilized and they have the information they need as well to have confidence and trust. So I think that is really where the challenges are, the public nature and the need for better communication to our members, our trustees, and the taxpayers here in California.

Joseph Cass

Great. Thanks, Marcie. Martina, how has the rise in popularity of private markets impacted S&P Global? And what are we hearing from asset owners when it comes to private markets?

Martina Cheung

Well, it's one of the most topical areas that we cover with our clients, particularly obviously in the financial sector, whether that's banks, asset managers or asset owners. And from an asset owner standpoint, and I'm very curious to hear Marcie's view on this as well, what we're observing is a phenomenon of asset owners increasing allocations to kind of a broader alternatives bucket, which in our parlance, we phrase that as private markets.

And it's about $15 trillion or so, we expect it to be this year and then climbing very fast after that, maybe about $18 trillion over a 3-year time period. That includes what we might have typically assumed to mean private equity, but the faster-growing areas there include private credit, infrastructure, real estate and other areas. 

And these areas are growing for a variety of reasons. Key one would be search for yields, higher yields and a comfort level with locking up assets, let's say, over a longer period of time that might be required for private credit, for example.

But we're also hearing a tremendous amount of interest and exuberance over opportunities in data center infrastructure, power infrastructure, and that's generating a lot of interest in different products that we have.

Overall, I think one of the most common things that I would hear is an interesting need in ratings, lots of interest in our ability to provide valuation services, interest in our data. And we're lucky enough to have a really broad and deep set of capabilities that we can use here to help our customers. And these are things that we're out talking about every day right now and really is, I think, one of the most important changes and evolutions that we're seeing at this point in the financial side.

Joseph Cass

Great. Thanks, Martina. Lastly, as Martina was saying, private markets have become an increasingly significant part of institutional portfolios. As an asset owner, how is CalPERS navigating this trend? And what role does private debt, private equity play in your broader asset allocation strategy?

Marcie Frost

Well, both equity and debt pay a really significant role. The Board, just over a year ago, increased the allocations both to private equity and to private debt. Even though private debt was not at its current allocation target at the time, the Board went ahead and increased it by another 3%, just looking at potential opportunity set.

So these are extremely important. When you look at a reference portfolio, we'll say a reference portfolio that's built on public assets, 70-30 or 80-20, that is not going to get us to the 6.8% expected rate of return and the discount rate that is expected at CalPERS.

So private markets become extremely important as we have to add that active risk to really build out the portfolio to get closer to that 6.8% return hurdle that we're expecting both on the return for the portfolio, but really importantly, the actuarial side using that discount rate to discount those future liabilities.

So we are in the midst of this. We do this every 4 years. We call it our asset liability management cycle. And coincidentally, Stephen came in right at the beginning of this new 4-year cycle.

And we've been leading the Board through a number of educational sessions regarding do we want to look at this next 4-year process in the same way that we've looked at it historically, i.e., do we want to keep the strategic asset allocation, kind of the protocols around that, building out candidate portfolios, understanding the Board's risk appetite.

Or do we want to be a little more nimble, a little more tactical or dynamic and do this more from a total portfolio approach, finding the best places to write the checks, breaking down maybe some of those silos that if private equity has got 13% of the portfolio, then they know -- just for simplified terms, they know what their checkbook balance is, and they can go out and find the deals to underwrite that 13% allocation.

But that may not have been the best deal. Maybe the best deal would have been in private debt versus private equity. And so this is really around raising some of that governance, making sure that people have more of this collaborative model, less around the silos, incentivizing people through their compensation to look at this from the total fund or the trust level, not just at the asset class level.

So we are working our Board through it because this Board has been very accustomed to strategic asset allocation. They know what the decision points are. They know where to identify the risk, including liquidity risk that happens in private markets.

And so I would say -- we just surveyed the Board this week, and it was a little uncomfortable. Frankly, it was a little uncomfortable on these trade-offs. What are you willing to trade off to get a higher return?

What -- how comfortable are we that we may not meet that expected rate of return over a 1-year period, a 2-year period, a 3-year period, what if it's 5 years? And so really understanding where the Board generally is comfortable with the amount of risk that the portfolio and then subsequently, the team invests that portfolio. 

So really interesting time to be here, but moving from that more pure SAA to something that's more TPA or total portfolio approach. That is something Stephen Gilmore has brought in. He has very strong conviction about that and really believes that it will outperform a pure kind of SAA model.

But obviously, that takes the team to think about their roles differently, to think about the asset class role differently and really getting everyone thinking about total fund. And so I'm excited. I think it's a great time to be here, but private markets will be a very important part of the program and including infrastructure.

I know, Martina, you mentioned that AI is going to require a lot more energy than currently is being produced, and we do see some infrastructure plays there as well or real asset plays. but our private debt book and our private equity book will remain extremely important to CalPERS.

Joseph Cass

All right. Thanks, Marcie. Marcie, on the same subject, how do you understand the level of risk CalPERS are taking when allocating assets towards private markets? And do you think increased transparency in private assets will be valuable for you as an asset owner?

Marcie Frost

We've really worked on this transparency. I think there was a time not that long ago, frankly, that I think one of our Chief Operating Investment Officers actually made a statement publicly that trying to understand the fees that you're paying in these private equity funds was really challenging for a period of time.

For me, that problem has been solved through some systems that have been created at CalPERS. But also, I think, increased transparency or the willingness to be transparent by the GP community.

We also did a piece of work with Carlyle. It was called the data convergence initiative or project. And that was taking key pieces of data that LPs or limited partners like CalPERS, we felt were material to the portfolio.

That might be emissions, that might be human capital issues, those might be governance issues, but really having a standardized set of metrics that gets reported from the portfolio company to CalPERS so that we can evaluate the risk and frankly, make sure that we're being compensated appropriately for the risk that we're taking.

So we're on that journey of providing more transparency, but sure, would we like more? And yes, I think we get a lot of transparency in our individual engagements with GPs. I think ILPA has done a great job in creating frameworks.

I think the data convergence project has done. But I think really underlying this funding of private markets or private equity is understanding leverage, how are they using lines of credit? What about valuations of those portfolio companies because you don't really know until you go to sell that company, what the value of it is.

And that would be for a public company as well. But I think more to come on that. And then on our end, it's just having the data and the technology systems in place that we can consume that data and then use this information for future investing. And we have a significant initiative underway to invest in data and technology for our investment team. And that's a next 5-year project that we'll be spending a lot of time and we'll be investing in.

Joseph Cass

Great. Thanks, Marcie. Martina, AI was one of the most talked about topics in the market in 2024. S&P Global is very fortunate to have an ocean of data, both historic and current. How are you thinking about leveraging this data in 2025 with the help of AI?

Martina Cheung 

Well, we have well over 3,000 data sets that we make available commercially, Joe, and they meet hundreds of different types of use cases and needs for our entire client base, including corporates, financials, governments, and other types of clients.

And so there's an incredible opportunity for us. We all know that a large language model is only as good as both the quality and quantity of data that it's trained on, and we have both of those in spades.

And so we've been obviously thinking about this in the context of how we can help our customers, but also how we can speed up the work that we do ourselves internally, improve the quality of what we do internally, increase innovation.

It has so many different types of potential applications and ways in which it can create value. Externally, we have been using our phenomenal AI company, which is called Kensho. This is a company we acquired in 2018.

It continues to be the powerhouse of a lot of the innovation that we have, driving the creation of new AI and Gen AI tooling. And our Kensho CEO, Bhavesh Dayalji, is also our Chief Data Science and Gen AI Officer for S&P Global.

So we've seen some great stuff come out of there, including most recently solutions that will allow our clients to actually use our data through Gen AI applications a little bit more innovatively.

I would also say that we've been very, I would say, intentional at making sure that our employees are coming along the journey. And so we've coined the phrase people forward. And that means we have to train our folks.

We have to make sure our folks understand how to use these tools, but also to use these tools to really generate more value. And we've deployed a product called Spark Assist across the entire employee base of 40,000 employees.

And so far, since we launched it just under a year ago, we've had about 28,000 employees using it. The part of it that I love is that you can go in there and you can actually become a prompt engineer.

And if you have a prompt that essentially qualifies as being applicable to broader employee base, you can post it in the library. And right now, we have over 1,000 prompts in our Spark library. And these prompts are essentially being used across the organization. So I would tie that. We think -- we've been thinking a lot around how we can operate as an enterprise.

And I think that sort of sounds a little bit like what Marcie is saying around having the ability to look across the asset classes in the CalPERS portfolio, we also want to look across the divisions and the areas in which we have data and where we may have people facing common challenges and take an enterprise approach to solving them.

And this is just a really incredible way for all of our employees to participate in that. So it's very exciting. And I think we have such a great team around this that's working through it and wait to see what more they can do.

Joseph Cass

Absolutely. Thanks, Martina. Marcie, how have you approached the topic of AI and Gen AI at CalPERS? How are you looking at integrating these tools into your business?

Marcie Frost

We have certainly spent some time exploring what the potential use cases would be. We run a very large operation. We have a pretty significantly sized contact center, and there are a lot of use cases that we think would enable our teams to be more productive and more efficient, just doing a call content capture versus having that team have to capture that content and enter it into the CRM. And so I think we're probably at the beginning phases of this, exploring what are the governance models. 

It's really important. We have personally identifiable information. We had PHI information. We have to be very, very cautious about using anything that is outside of the firewall. So some of this is governance, it's policy creation so that our team knows essentially the do's and the don'ts about how to use this really powerful tool, and we want to take full advantage of it within -- once we get people behind the firewall.

So we have set up some search functions behind our own firewall. I won't say the name of it, but it's kind of a cute name that the team has come up with and start people using that system to really search on all of the knowledge bases that we have at CalPERS.

And then for our members, we really do want to roll this out to our members. I think one of the challenges that we've had, and I mentioned this earlier, is how do you communicate with the members in the way that they can comprehend the information.

They're not pension experts. And sometimes we speak pension in a way that people don't understand exactly how to interpret it and how to take action from it. So having AI enable some of that search and have that customized by -- sometimes by language, sometimes by just the content of what people understand, put it in terms that people can really take action from.

So we think there's a really significant use case there once we figure out the governance and the security around that. And then we want to make sure that we're calling this worker enabled. We want some worker-enabled AI that this is about making our team feel more productive, that they're getting rid of some of the nuisance tasks that take up a lot of their time and take them away from the high-value tasks, which would be, I need to talk with the members, I want to be here.

The members want us to be their trusted advisers. We have the most complex pension system in the world. There are so many different rule sets depending on your career, what job you worked in, what your formula is, when you started, that it's almost impossible for people to navigate that on their own and understand what their benefit will be at the time that they stop working.

So we want our team to be able to be that trusted adviser more often than they're able to do that today. And we also don't want to staff a contact center for our busiest call day, but we don't want to staff it for our least call volume day either.

So I think the bridge to figuring this out is using these AI use cases, working with our vendors to make sure that the security protocols are in place that we feel confident that PII and PHI is not going to be given to the bad actors.

That's a real risk out there, I think, for all of us. But we're excited about it, but -- excited within this worker enabled, how do we redevelop, how do we redirect these resources so that our members have more access to CalPERS.

And that's on the member side, and we're certainly going to see this in our health program. We have a data warehouse that has just a wealth of data that we've not yet turned into meaningful information that we can get at.

Well, where do we have accessibility issues? Where do we have issues with equity, like equitable health outcomes? Where do we have issues with cost and quality? Is that down to a particular plan? Is this within a health group within that plan, but we're not using all of that content and data in the way that people can make decisions from on the health care side. And I would say equally a use case, a very significant use case in our -- with our investment office.

Joseph Cass

Perfect. Thanks, Marcie. Martina, having recently been elected unanimously by the Board as CEO of S&P Global, what do you see as the major strengths of the company? And what areas are you looking to grow?

Martina Cheung

Well, I think when I look at S&P Global, I think by any metric or any measure, we're a phenomenal company, and it's just such a thrill to be in the role that I'm in. A few things that are, for me, pivotal as part of how we move the company forward.

The first is we have an incredible broad and global set of customers, tens of thousands of customers. And I've been meeting dozens of CEOs in the last 6 months since our announcement. 

And one of the things that I hear the most frequently is just the challenge of operating in such a dynamic environment when the external conditions, whether it's geopolitical macro -- or market forces are moving so quickly.

And we're in a pretty fortunate position to be able to help our clients navigate those types of situations with the data that we have. And we're helping some of our clients right now. We evaluate the impact on supply chains from some anticipated changes, for example, in trade and potential impacts of tariffs.

We're also helping some of our clients figure out the implications of natural disasters that we see in various different regions around the world, at least the U.S. And so we're here for our clients in the great times, and we're also here for our clients to navigate some of the challenging times.

And I think that's a mark of a great company. Along with that, we have appointed a leadership team that is largely internal. So half of the folks with new roles on the leadership team are internal promotions.

And it's a great testament to the quality of the people that we have at the company, Joe, as you know, 40,000 phenomenal employees. I'd like to think of it as 40,000 problem solvers and innovators.

And we're very focused on making sure that we are customer-centric, that we think about our enterprise and how we can generate value across the enterprise for our customers and also being relentlessly curious and innovative. And I think these days, we also have to make sure that we have leadership teams that have great resilience and agility as we navigate through all these changes. But it's an exciting time for us. We have a great team, and it's just a time of great optimism.

Joseph Cass

Fantastic. Thanks, Martina. Marcie, I wanted to talk a bit more about your background. So you had 2 young daughters by the time you were 19, and then your son came along when you were 25. So on top of this, you had no formal degree.

So I'd be really interested to know how challenging was that time, balancing your career and your personal life, what barriers you faced? And how did it shape your view of applicants when you're now hiring?

Marcie Frost

Yes. So I found some challenges, I think, earlier in my career, but I really put a lot of those on myself more so than what others were putting on me, having that confidence to compete for that next role when your resume didn't look like potentially the other resumes that were in that pool.

But I learned over time as I gained more experience and I worked for more incredible leaders who were, I would say, more mentors and sponsors than necessarily your supervisor or your manager, but someone who really saw something in you that you had not yet seen in yourself.

So there were challenges in kind of this work-life balance for me with having 3 young children, and I was really trying to promote and provide a better life for them. I grew up very, very humbly. We grew up below poverty level.

And we just didn't have a lot of options available to us. My parents did obviously the best that they could do. But I wanted something better. I wanted better outcomes. I wanted better options for my own children than what I saw it happen with me.

But I was very purposeful, and I figured this out pretty early. I was very purposeful about who I worked with and for. I chose leaders who really looked out for their team. And I coined this phrase, I don't want to work for a boss that tells the organization what to do, how to do it, when to do it.

And that does not feel good to any team member. Team members want to be able to bring their whole self into the organization. They want their ideas to be heard. And as Martina said, you want problem solvers. 

Well, people can't be problem solvers if the boss is telling and trying to solve all the problems and trying to receive the credit for solving all of those problems. And I work for leaders like that periodically, but I learned very, very quickly the impact that it had on my motivation, the impact that it had just on my demeanor and my behavior and my attitude.

So I really wanted to work with people who watched out for their team, who developed their team, gave the team opportunities and really stretch opportunities, not those day-to-day tactical things that we know we're really good at.

We want leaders who really stretch the team and put the team in areas where they can use their best skill set and not continue to try to test them on something they're not as good at. But let's give -- put them in their whole self and that's where the problem solvers thrive, and that's where big problems get solved by teams.

And it creates that columns. It creates that flywheel effect. That's really important that it's not being pushed by the leader. The entire system is on this flywheel of people giving their best ideas, feeling motivated, feeling rewarded and recognized.

And so I figured that out earlier. So some of those challenges came down as I move through the organization. But it was tough. I wanted to be a present parent and -- so that led into why I didn't continue my education is that I wanted to be present with my family.

I wanted to be available to them. I wanted to make them the best well-adjusted adults, eventually adults that I could. And I think that was very successful. All 3 of my children are in incredible professions.

My older daughter is a principal at a couple of small schools in Oregon. My son is a policy analyst also works in pensions, by the way. And then my younger daughter is a part owner in a design firm out of Portland, Oregon, and they're quite successful in the projects all around the United States.

And so I think that is a byproduct of me continuing to be present with them and available. And yes, I did have to sacrifice a bit of forward movement by the fact that I did not have this degree. But I never felt ashamed of it.

I never felt like that was something I had to hide. I always felt that this is just a part of who I am, and I worked really hard to balance out those differences between what I felt were the differences.

I don't know that everyone felt that way, that I felt was different between my resume and someone else's. And I worked very hard to be seen and to work on the problems that nobody else wanted to work on, right, to be that problem solver and solve those nary problems that people are like, yes, not me, let me take that step back.

I was taking the step forward. And again, a lot of this was around the leaders and sponsoring you. When you're not in the room, you want to be that leader who is speaking on the behalf of that person who is ready to move on to their next role, even if that means they're leaving your team.

But this is about developing people, developing them as individuals, getting them in their strength areas and really improving their career, improving their professionalism, improving their kind of their personal lives in many aspects.

And so yes, I enjoy the career I've had. I've been doing this a really long time now. I did it for 30 years in Washington. I've been here 8 years. I just entered my ninth year in October. And it leads all of us to think about how do we hire differently, right?

The resume, the traditional resume, including on our investment team, by the way, and Stephen is really introducing this with his team, we've hired in pretty traditional ways, which means we don't have enough diversity of thought in these meetings.

And we're going to miss things if we don't pay more attention to having these diverse backgrounds and really having the discipline to work through your candidate pools, even if you can't get to a quick hiring decision, it's much more important to take your time, make sure that you're hiring people who have complementary skills to the skills that you already have well represented on the team.

So we're trying not to put people in these buckets where, oh, they only have this or they only have that. I've tried to strike this only out of our language and say, well, what do they actually bring to this position that is not already well represented. So let's hire this person. That is different thinking. That is very different thinking, I think, based on my experience over the last 38 years. 

Joseph Cass

Yes, that's absolutely fantastic. Thanks for sharing that. Martina, you've recently installed, you mentioned a new executive leadership team at S&P Global. What qualities did you look for? And what did you -- what do you think makes a potentially good leader?

Martina Cheung

Yes. Well, I hinted a little bit earlier around some of the focus areas for us, customer centricity, for example, insatiable curiosity, commitment to innovation. I think one of the things that has been a standout as part of this new leadership team is also an expectation not just for the leadership team, in fact, but the entire organization that we think more with an enterprise mindset. And that struck me is quite similar to some of the points that you were making, Marcie.

But this was another focus area that we began to talk about going back about 3 to 6 months ago as we were introducing the new leadership team. It is firmly now positioned as part of our, we'll call it, sort of strategic enterprise agenda going forward.

And the idea here is that we have leaders in the organization that are making sure we're not solving the same problem multiple times across multiple areas in the organization that we are not imposing, let's say, our own complexity for whatever reason on our customers and that we're bringing the brightest minds with the best ideas together to solve problems collectively.

And we believe that, that will generate value for our customers. We believe that, that will raise the bar for how we innovate, how we do things, increase quality, increase time to market. And it's an exciting concept, not as easy to get to. And I appreciated some of Marcie's remarks on that as well because if you introduce something like that in an organization that has been more division-led throughout its history, you really begin to have to think about what that looks like in practice. And we spent a lot of time on that.

And the team, I think, has rallied around some of the areas where we expect to see some change, and we understand that it's gradual, but we're very fortunate to have a culture that is open and curious and lots and lots of experts who are keen to bring their expertise to solve bigger problems. And we will try lots of things this year and sharpen our pencils and create more standard ways of doing things as we go throughout the next couple of years.

Joseph Cass

All right. Thanks, Martina. Marcie, what opinion or view on leadership do you have that few others would agree with you?

Marcie Frost

Well, this goes back, I think, to the answer I gave to the prior question. It -- that leaders serve their teams. It's not vice versa. And I think that is changing. I think it is evolving. There's been a lot of books around servant leadership, but this was a concept that I figured out, I think, as I was moving my way through that career lattice and having these different experiences with leaders that the job of a leader is to serve the team.

What does the team need from leadership behaviors? What does the team need from resources? What does the team need from just to do their day-to-day job to do their career development. So on the job coaching, but also career development, career mentoring and career sponsorship.

And that is your job to feed the team, not vice versa. And again, I think it is evolving. I think when we first started talking about this, this is a concept I worked on when I was in Washington State working for the Department of Retirement Systems. And we called it like flipping the pyramid, and we'd have people start doing this.

And it isn't a top-down organization anymore. It's that the people working closest to the customer are the most informed about how the organization needs to be run, how the organization needs to flex to meet those expectations better. Now mutually agreed upon expectations, of course.

But I think that concept when we first started talking about it, I would say, about 10 years ago, it was pretty -- it wasn't always agreed upon by the leadership core that even I had at the time. And so it's making sure you have leaders who understand that their job is to make their team successful. And if their team feels successful, your members win every day. 

Joseph Cass

Thanks, Marcie. Martina, I just wanted to talk briefly about your New York Stock Exchange experience in November last year when you became CEO officially. So I read that you were 1 of 4 people who have ever broken the gavel. So can you tell us more about what happened?

Martina Cheung

Yes. Well, it certainly was intentional, and I was horrified because I thought, oh my gosh, I've broken a 200-year-old prized antique. But at the closing bell, you bounced -- you hit the gavel 3 times, on the third time it broken in 2. And you're live on TV.

So of course, I'm a big smile pasted across my face while I'm wondering just how much damage I had done. But they do say that it is good luck and everybody at the Exchange was quite excited that it happened. And in fact, they came over with a very elaborate display with the gavel mounted and a photograph. It was very lovely. And so I'll take it as a sign of good luck, Joe.

Joseph Cass

Yes, absolutely. So Marcie, the last question of the podcast goes to you. Very simple one. What's the best piece of advice you've been given and who gave it to you?

Marcie Frost

The best piece of advice was given to me by a woman named Theresa Whitmarsh. She was the Executive Director of the Washington State Investment Board. She since retired, but very successful woman in finance and communications and she was in journalism prior to coming to the Washington State Investment Board.

But she said to me one day, and we had just been on this trip through the International Center for Pension Management, and they were doing some spotlight on the Washington State governance and why does it work? It shouldn't work, but it's working. So how is this working? And we were with some of the Dutch regulators. And I was really struggling with how to tell the story. I tended to be pretty shy earlier in my career.

So her advice to me is you have to find your voice, you have to work really hard to identify what you stand for. It's obvious that you're passionate around retirement security, but you need to find that voice and you need to use that voice in every room you're in, you should not feel intimidated. If you're with a group of regulators, you should not feel intimidated because you're in a group of CEOs. But you have a perspective, a really important perspective and no one is going to hear it if you don't find your voice.

Joseph Cass

Yes. Fantastic advice.

Marcie Frost

The best advice. And I think -- sorry, I think partly as leaders and Martina, you know this as well, but the more leadership roles that you have where you're predominantly in a leader role versus a technical role, communication and voice becomes the most important thing that you have. People want to know why. Why are you leaving? Why are you deciding -- with input, of course, but why are you deciding and making the decisions that you are and voice becomes the most important tool that you have.

Martina Cheung 

Couldn't agree more.

Joseph Cass

Perfect. Well, that's a great note to end on. So thank you so much, Martina and Marcie, for your time today. And for everyone watching, everyone listening, see you next time on the Leaders podcast.