Chase Alumnus Marshall N. Carter was elected chairman of the Board of Directors of the
New York Stock Exchange on April 7, 2005. Marsh had been a director of the NYSE since December 2003.

From 1992-2001, he was chairman and CEO of the State Street Bank and Trust Co.,
and its holding company, State Street Corporation. He joined State Street in July 1991 as president and chief operating officer, became CEO in 1992 and chairman in 1993. During his nine years as CEO, the company grew more than sixfold.

A former Marine Corps officer who was awarded the Navy Cross and Purple Heart during two years' service as an infantry officer in Vietnam, Marsh served from 1975 to 1976 as a White House Fellow at the State Department and Agency for International Development. Major projects during that year were the application of satellite technology to agricultural activities in West Africa, the use of high-level U2 photography for disaster relief activities in Guatemala and the use of sensor-surveillance equipment as a member of the project team that installed the U.S. Sinai Surveillance Mission in Israel after the 1973 Middle East War.

He holds a B.S. degree in civil engineering from the U.S. Military Academy at West Point; an M.S. in operations research and systems analysis from the U.S. Naval Postgraduate School, Monterey, Calif.; and an M.A. in science, technology and public policy from George Washington University, which he attended on the GI Bill.

Marsh is chairman of the Board of Trustees of the Boston Medical Center, the primary inner city hospital for Boston. Long active in industry affairs, he has served on the boards of the American Bankers Association, CEDEL, Euroclear and National Securities Clearing Corporation, and during 1988-1995 co-chaired the U.S. Working Group of Thirty, which developed recommendations for revamping world securities clearance and settlement processes. He also chaired the Massachusetts Governor's Special Advisory Task Force on Massport following the events of September 11, 2001.

The CAA was proud to inaugurate a series of interviews with prominent alumni with this Fall 2005 interview of Marsh Carter.

Tell us about your 15-year history with Chase.
I joined Chase in 1976 straight from the Marine Corps. I was in the International Financial Planning and Budgeting Division under Frank Reilly and Frank Stankard. I became corporate Budget Director in 1978 (until 1981), working for Bob Lichten and Bill Ogden-CFO. In 1981, I began working for Joe Harkins in International Institutional as a product manager, then went to NY Plaza as Division executive of the Letter of Credit Division, working for Jim Zeigon and Mike Urkowitz. Art Ryan asked me to be the Corporate Risk Management executive in 1984. Then in 1985 I went to Rochester, NY, as the Information and Systems group executive at Lincoln First Bank, which had been bought by Chase in l984. I returned to Chase in 1988 as head of Global Custody ­ building that business to be the biggest and best in the industry. I left Chase in 1991 to be the President and COO at State Street Bank and Trust in Boston.

What brought you to Chase?
After two years in Vietnam as a Marine, I couldn't get a job at the end of the Vietnam War. Chase was the only company out of 85 I applied to that had a job offer. My background was: undergraduate in civil engineering, M.S. in systems analysis and operations research and an M.A. in science, technology and public policy. I had no banking background. I had to ask someone the difference between a merchant bank (are there any of those left??), an investment bank, a commercial bank, etc. I think in my case, coming right out of the military, Chase was a great great company that gave me a chance to develop and grow. I could never say anything bad about those years, 1976-1991.

Any mentors or role models from your days at Chase? What did you learn from them?
Clearly, Frank Reilly was my best mentor. He helped my through the adjustment from Marine to banker ­ quite a cultural change. I had been living in a foxhole or the jungle for months at a time in the Marines in Vietnam, and here I was at Chase where Second Vice Presidents worried about having a desk by the window!!!! Also, Jim Borden for his focus on his business and helping global custody with foreign exchange, and Wolf Schoelkopf who helped me learn about banking.

Were there any particular training programs that helped you later in your career?
I went to the Menninger Institute stress program for executives in 1978 and thought it great. The advanced management program that Chase conducted up at the Mohonk Mountain House was also excellent ­ and for the first time got officers from various business units to talk with each other!

After the fiascos of Drysdale and Penn Square in the mid-1980s, Chase beefed up internal controls and you headed the Management of Internal Control (MIC) function. What lessons did you learn?
First lesson: Don¹t let senior executives live on an "Executive Floor" like the 17th at CMP; they become too isolated from their business units and out of touch with the markets they serve. The other major lesson is that the MIC/risk management functions must be deeply imbedded in the business and operations units, reinforced by a focus on risk management from the senior executives and tied to bonus and compensation programs.

Many thought your position was like being a "stranger in a strange land" when you became Chase¹s senior representative on Lincoln First's management team after Chase's acquisition of the regional bank. What was that really like?
The fundamental difference was that a regional bank like Chase Lincoln First was a fully integrated customer focus organization, e.g. they viewed a multi-use customer as "one customer using eight products," whereas Chase, with its size and large product companies, viewed a customer using eight products as eight separate customers ­ one for each product in the product companies. We always had trouble at Lincoln First translating this into Chase language so people could understand why we did processing and loan work in the branches, etc.

Did you prepare the Rainbow Book for Tom Labrecque? What was it?
That was actually prepared by Wally Rak (whose division was called the "Rakomatic Machine" by Mike Esposito) and Mike Esposito. I added the budget and performance target data and then explained it to the Management Committee. It was actualy a monthly and quarterly performance tracking system for every division, group and department in the bank. The colors allowed the EVPs and above to quickly check performance, and the colors allowed an easy-to-read format. The Management Committee spent quite a bit of time on this, and David R. looked at it every month.

How did your overall experience at Chase prepare you for your later roles as chairman and CEO of the State Street Bank and Trust Co. and chairman of the New York Stock Exchange?
The tips in management and leadership I learned were:
1. Keep executives with their troops and away from a centralized executive floor.
2. Pay close attention to people coming back from overseas assignments. If you don't, no one will want to go overseas.
3. Focus on revenue and not expenses. I never thought Chase had an expense problem in the '70s and '80s; we had a revenue generation problem. There was, in my opinion, too much emphasis on expense control.
4. Hold executives directly responsible for their organization's performance: Fire them, withhold bonuses, transfer them, remove them from line responsibility if they fail to perform.

What made you decide to step down from State Street Bank well in advance of any mandatory retirement age?
I retired at age 61 after nine and a half years as CEO and Chair at State Street because I always felt that eight to 10 years in the fortune 500 CEO's jobs was about right. You get very tired and can't really have many friends in the company if you are changing things. In 1991 when I joined STT it had 8,000 employees, was doing business in 32 countries and had a market cap of $2.3 billion. About nine years later it had 20,000 employees, was doing business in 94 countries and had a market cap on $22 billion, and we had fought off a hostile takeover attempt by the Bank of New York. I was worn out and wanted to do other things. I went to Harvard and MIT to teach leadership. [Marsh most recently had been a lecturer in leadership and management at the Sloan School of Management at MIT and Harvard's Kennedy School of Government, where from 2001 to 2005 he was a Fellow at the Center for Public Leadership and the Center for Business and Government.] Then, in 2003, John Reed of Citi asked me to help form the new Board of Directors at the NYSE.

You have said that you failed at retirement by returning to work after State Street Bank. What is next for you?
I doubt if anything is next. This NYSE gig could last several years, as we're in the early stages of a merger, going public and changing from a one product utility to a multiproduct global marketplace and public company.

What if the best part of being the chairman of the NYSE?
The best part is giving back to my industry. Reed only got paid $1 per year. I'm getting more but am still focused on the service aspects and helping the NYSE straighten itself out after some very rough years.

Do they let you ring the opening/closing bell?
The opening and closing bell ringing is a great tradition, but it's scheduled many months in advance and used for newly listed companies, anniversaries of listed companies, companies launching new products etc., and sometimes foreign leaders.

In nearly all of your professional positions, you have devoted considerable time planning for contingencies and the recovery of critical operations. Any words of advice?
9/11 ­ that corrected all our previous contingency planning. Nobody thought about losing that many employees in any of the companies affected. We used to contingency plan for computers, buildings, etc., but not for people. This means that big operations should really spread the work staff over several locations, with distance between them.

Finally, what has it meant to you to be a Chase Alum? What value have you derived from being a member of the Chase Alumni Association?

I've enjoyed seeing old friends again ­ even seeing old enemies, who now are friends. Also, if you look at the roster book, you can almost always find someone ­ a Chase alum ­ in most every important company in the world. It was and probably still is a great training ground for future leaders in our industry.