In 1973, Donaldson was appointed undersecretary of state under Henry Kissinger. It was the time of shuttle diplomacy and Kissinger was not often found in Washington. Donaldson, his friends say, was something of an aimless figure in Washington then, without a defined role. He spent some time helping with Nelson Rockefeller's transition to vice president.
In the 1980s he did some leveraged buyout investing through his own company called Donaldson Enterprises. He also did significant work for his alma mater, becoming the founding dean of the Yale School of Management. Donaldson was a hockey player at Yale and friends say that he plays a brisk set of tennis. He lives in Manhattan with his wife, Jane, and three children.
In 1991, he was appointed chairman of the New York Stock Exchange. At the Big Board, Donaldson became embroiled in one effort to get the SEC to lower the standards for allowing foreign companies to list their securities in the US. Under the rules he wanted to relax, foreign companies have to restate their financial statements so they conform to US generally accepted accounting principles.
While foreign listings flowered as a result, competing exchanges like the NASDAQ flourished as well, attracting a new breed of fast growing, technology-oriented company that in another time might have chosen to list on the Big Board.
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