In January, Craig Donohue returned to the financial industry as the new executive chairman of the OCC, the world’s largest clearing house. Donohue, who stepped away from the financial markets after 25 years and the CEO post at the CME Group, spoke with Jim Kharouf, editor-in-chief of John Lothian News about why he took the job, governance issues at the organization as well as where the OCC may be heading next.
“The most interesting thing going on in markets today is the focus on moving more products to centralized clearing houses and looking at ways to reduce risks in the marketplace,” Donohue said.
He has big shoes to fill in his new position, replacing an options clearing legend in Wayne Luthringshausen who ran OCC since the inception of the Chicago Board Options Exchange launched in 1973 until his retirement at the end of last year.
“Obviously, Wayne deserves a lot of credit for what’s been achieved here over the last 40 years. OCC and the options industry has been a phenomenal growth story,” Donohue said. “We’re going through a tremendous amount of change now. My focus is on how [we will] make OCC a relevant, successful and thriving institution for the next 40 years.”
For one thing, Donohue is tasked with making sure OCC implements changes to its board of directors, which will satisfy critical Securities & Exchange Commission officials.
“A lot of important decisions have already been made,” Donohue said. “The board decided to separate the role of the chairman and CEO.
In Donohue’s position, all of the OCC’s control functions report directly to him, which includes risk management, compliance and audit components of the firm. Those departments also report separately to the OCC’s audit and risk committee. OCC has also added a governance committee, with plans to combine it with a governance and nominating committee.
“We’re looking at all the interactions between our board and management to make sure we have a very robust and strong governance framework here,” he said.
Going forward, Donohue said there is room for the OCC to grow perhaps even internationally, which would be a departure for the domestically-focused clearing house.