The Surprising Impact of Authentic Leadership — with London Stock Exchange CEO Julia Hoggett

0:00A CNBC original podcast. We all have to make big decisions in our lives. Decisions that define and influence our professional and personal journeys. If you reflect on them, some were good and some I'm sure you'll definitely regret. In my nearly three decades as a financial journalist, I've interviewed literally thousands of CEOs, politicians and market voices, and they all had to make choices to get where they are today. In this podcast, I hear about those decisions, as well as the moments of doubt, risk and conviction that impacted our guests' journeys and the people they lead. This is Executive Decisions with me, Steve Sedgwick.

0:41In this episode, I speak to Julia Hoggett. What you're seeking to do is make the best possible decision that you can in that context at that time with the information that you have. which also means that if the context changes or the information changes, it is absolutely fine to also change your mind. Julia is the CEO of the London Stock Exchange. Today, she's one of the most important voices in British capital markets. But that wasn't always her plan. If you have a plan, what you think you're capable of at the time is not necessarily what time proves you're capable of. Raised in a family of trailblazers, she made history herself as the first openly gay leader of a global stock exchange.

1:18I remember thinking, if I don't come out, it's harder to deny who I am than it is to cope with the consequences of what I'm about to say. That moment shaped how Julia leads, how she builds culture and how she makes decisions that ripple across the financial world. These are Julia Hoggett's Executive Decisions.

1:43I can't work out why you became a banker, a regulator and of course more recently a CEO of the London Stock Exchange. You love sociology, you were doing a project on Malawi, you were at Cambridge, you have parents who are eminent QCs and judges as well. Why on earth did you choose the city? That's a very, very good question. I always describe my career as about answering exam questions. That is sort of the philosophy of my life in many regards. And I was, as you say, I was at Cambridge reading social and political sciences and chose not to go into the law because my family were all lawyers. You say you didn't want to go into the legal profession because both of your parents were in that.

2:23Your father, John Hoggett, QC. Your mother is a very famous judge, Baroness Hale of Richmond as well, who was, I think, the first female head of the Supreme Court, which is extraordinarily eminent as well. So a big legal background as well. You didn't want to do it because they were doing it, because what, you thought you'd be competing with them or because you, why? So I have a moment I remember making this change. I mean, I grew up with the law as just part of the conversation. You know, I grew up thinking I wanted to be a lawyer and understanding its amazing purpose in serving society. There was one weekend when my godfather, who was also a Queen's Council, was hosting a party.

3:07And I was talking with a friend of my father and my godfather's, who was also a Queen's Council and ran a set of chambers in London. And he said, look, Julia, when you graduate, give me a ring and we'll talk about what you can do next. Fully assuming that I was going to read law and fully assuming I'd want to be a barrister like my father. Now, my father ran the largest set of planning chambers outside of London at the time, and had upwards of 2 ,000 applications for the pupillages that they gave out. And I thought, here's someone, not giving me anything that they shouldn't do, but kind of articulating to me really clearly, that unique opportunity that I would be given because of who my parents were, that those 2 ,000 other people who were handwriting their applications to my chambers in Manchester would not get.

3:51And I realized, would I know at the end of my career, whether I got there because of me or because of who my parents were. And that was why I did that handbrake turn and selected the thing I was next most interested in, which I thought was politics and became sociology, because I realized I wanted to make my own path. I'm incredibly proud of my parents. I've achieved both remarkable things. But I didn't want to feel that I'd kind of gone on their coattails in terms of what I did next. That's extraordinary maturity at a young age to say, at the end of my career, I won't know whether I made it on my own.

4:24It's the opposite of the Nepo baby syndrome we hear so much about now as well. Have you always been so considered in everything you've done? I mean, because I think one thing I know is you only make it in life if you're very hardworking, you are incredibly talented, or you have an enormous amount of luck. You need at least a couple of those to really make, in my opinion, to make it as well. I believe in the hard work bit. And you believe in the hard work bit. But I mean, luck and opportunity, they do come into it as well. Oh, yeah, yeah. No, my career has been an almost infinite number of sliding doors moments for me, it feels.

4:59The way I describe it is I got taught the rules of the game of what I think kind of classically, and we shouldn't call it this anymore, but it's a white collar work around the dining table. You know, that sense of how do you operate in these spaces? How do you understand what the appropriate behavior is? How do you think about what those motivations are? And one of the things I'm very conscious of is that's an immense privilege. And there are incredibly talented people who are growing up in households where that's not the case. I know you're stunningly proud of your father. Yeah. But he was a man in a man's world.

5:32Your mother has had unbelievable success. No, not unbelievable. Fantastic and well-earned success as well. But how much of a major influence has her as a groundbreaker become for you as being a groundbreaker yourself? She grew up at a time when there were only six places at Cambridge for women to read law out of 100 places because there were only two female colleges and they had three students each. We forget that actually by being men only colleges, it was actually saying you could therefore only have 94 % of any year intake was men, not women. and there was there weren't really any female I think there may have been one female high court judge no female appeal court judges no law female law lords ever no none of that was in front of her and so she thought she was going to be a solicitor in a small county town of county town solicitor's office you know and so the idea that kind of if you have a plan what you're actually capable of is what you set in the plan is is actually not often the case I think it's incredibly valuable particularly the more senior my roles have become and the more higher profile they've become, to be able to have observed somebody else go through that.

6:44I think getting a ringside seat is some of the things that mum's had to navigate. It gives you an understanding of just the realities of what it actually is to sit in these kind of seats and what comes with it, if you sort of mean. I think there's something more fundamental, actually, though, which is that what mum has done at various points in time, it's two philosophical things, I think, that it's taught me. The first is one of the most foundational things she was was a law commissioner. So she wrote the Children Act. She wrote the No Fault Divorce Report that took about 20 years to actually come into being.

7:16And so she was tasked by the government, that's what law commissioners are, they're tasked by the government to look at the existing body of law, look at this world as it is today and decide whether that body of law is fit for purpose or whether it needs to be updated. And she was doing that at a time that it was really to give children rights both vis-a-vis their parents and vis-a-vis the state. first time in British legal history effectively and therefore she engendered in me this concept that if you don't like the system work to change the system not that you're just passive recipients of it but that you can act on a problem and you can think big about doing so and when you become a regulator that's how you have to think you don't make rules for one company you make rules for an ecosystem.

7:57So that sense that that is possible, I think has just always been there from watching my mother's career. And every stage of your career as you've become, gone from success to success to success, that line, if you don't like the system, change the system. That stuck with you. It's one of your guiding mantras. We all have loads of wonderful sayings and things we want to do, but is that one of the key things for you? Yeah. Just don't be a passive. If it's not working, don't be a passive recipient of it consider what role you could play in making it work the other thing is one of the things I realized particularly when I became a regulator is one of the acts of leadership is to decide things now if you just punt it back time and time again go I need a bit more information about this bit more information about this can we punt you're actually not moving your organization forward particularly as a regulator because it just spins the wheels and goes back around the houses so you have to be prepared to have a risk appetite to make decisions but and mum used to tell me this about judging i mean the whole point of being a judge is you have to decide you can't say i'm not deciding but mum would always say that you have to decide with the utter awareness that you could be wrong in other words you're bringing a decisiveness and a humility and trying to combine the two things together with an absolute discipline that what you're seeking to do is make the best possible decision that you can in that context at that time with the information that you have, which also means that if the context changes or the information changes, it is absolutely fine to also change your mind.

9:24And those two things are kind of philosophical underpinnings of how I operate, which I have, I think, picked up from just watching mum and her career and observing how she's navigated it. And yet you can't stand yes men and women. I know that. We talked about this last week as well. You do not want people just to be, for want of a better words, sycophantic to the CEO. You want to be in a room where they can say, Julia, I think you're wrong. Or Julia, what about this information as well? And that's so important to you in your management style and how you make executive decisions. Yeah. So I have this phrase, I don't need to be right.

10:01I need us to get to the right answer.

10:08Let's go back to you joining the city. You chose JP Morgan. You had more than one job offer. Yeah. Why did you choose JP Morgan? Three reasons. The biggest reason was that they had the longest training program. I was a sociologist. As I jokingly say, I hadn't come out of the womb wanting to be an investment banker and I hadn't read finance. Who does? Well, seemingly a lot of the people that they hire nowadays have to have decided at a really young age that they want to do this. I had the luxury of actually falling into the evolution of my career over time. And I really worry that we don't quite do that in the same way.

10:48Everything's got to be a pathway and you've got to do spring week, you've got to do internships. You're not going to get an analyst position nowadays unless you've done those things. I wouldn't have got in on the pathway that there is today into the city. But on that first point, it's ridiculous. It's almost the opposite of what I think is Michelle Obama who said the worst thing you can ask a kid is what they want to be when they grow up as well. And the answer is there can be many things and they should try many things and do different things as well. And your evolution is extraordinary. You went from political and social sciences, Malawi, to investment banking, to all the other amazing things you've done since as well.

11:20But pigeonholing our viewers, the younger of our viewers and listeners now into a career path from 16 to 18 to 21 onwards, it's terrible for them, isn't it? I agree. And it's interesting because I always talk about people say to get where you've got to, you must have had a plan. And the way I describe it now is that if you have a plan, what you think you're capable of at the time is not necessarily what time proves you're capable of. And so very often we're restricting people in those opportunities rather than by demanding that they do. and all those pathways that bake it in do the same thing.

11:52Just on the training aspect, my own personal anecdote is I was a pit trader, an option trader. I'd been on the London Stock Exchange in the late 80s. We were the last people left on there on the London trade options market. And I was a live pit trader, but it was going screen-based, as you all know, in the late 90s. And so I went to the press association and said, you know, can I have a job? They said, yes, yes, but we can't offer you banker money. We can offer you, I think it was£12 ,000. and it was a lovely man called Jonathan Gren. I said, Jonathan, I would do this for nothing. You're training me to be a journalist.

12:23I know nothing about this. I've done my degree in night school at Birkbeck. I've done the NCTJ. But you're paying me to learn of these amazing, brilliant journalists as well. And I think it's really important to realise that the money is at that early stage of your career. It really is immaterial. Yeah, and look, for me, it was very simple. I need to be trained to do this because that's not what my degree is. And the other one was they were going to pay me slightly more than Schroder's, which was the other firm. But Schroder's had basically offered me what I thought was my dream job, which was working in the AB loan financing department doing co-financing of emerging market infrastructure projects with the IFC.

13:05So if you'd have designed the what Julia thinks is a sort of development kind of focus person, she thought the ideal job in the city would be that one. but it went it was going straight onto that team and not having the wider training that jp was going to give me um and then the final thing was that jp morgan's contract said we will not discriminate um against you on the grounds of your sexuality and being gay was not a protected characteristic at the time but it was at jp morgan yeah jp had had put it into their contract where schroder's followed the law so so didn't discriminate on the grounds of uh gender or race So I think disability would have been there at the time.

13:42Just on that one point, that is extraordinary from a big U.S. investment bank in the 1990s. Yeah. No, but that was my point that actually when you're looking as someone who is an outsider in that regard for safety and the idea that you can have confidence in going to an organization, you will look for every single bit of messaging that you can get that an organization is going to be safe and putting it in your contract. and I just had the privilege that I'd had two offers and I literally had the contracts side by side so I was reading them side by side and so I always say the three reasons were they were going to trade me, they weren't going to set me on the grounds of my sexuality and they were going to pay me slightly more.

14:20One of the best decisions you probably ever made was coming out. That was an accidental one. Was it accidental? Yes. Because I think I've read various pieces and we've spoken as well but for one thing I saw one quote from you saying being openly gay allowed me to develop my own leadership style which I think we will explore that as well But coming out to your friends, coming out to your family, coming out to your work colleagues as well, they happened at different times. But you must have felt an enormous sense of relief every time you did that. Yeah. And then you keep having to do it and you get bored of doing it.

14:53I mean, I think that's the issue that actually, I mean, I don't need to luckily now, but for a very long time, the exercise of coming out is a continuous exercise. And it's frustrating because people don't come out straight, you know. And so it's a kind of, there's always a tension with that concept at all. I think the biggest emotional decision is deciding to come out firstly to yourself and then acknowledge that's who you are and then to your family. And as an only child, you're thinking, okay, all these plans my parents had for me, I don't know whether they ever envisaged me in a white dress because I was a tomboy from the get-go.

15:29But, you know, all that kind of thing, is that not going to meet their expectation? Am I going to disappoint them, et cetera? despite the fact they were both utterly brilliant about it but you still that sense of what you could lose and I remember thinking if I don't come out it's harder to deny who I am than it is to cope with the consequences of what I'm about to say and obviously it wasn't at an easy time it wasn't the world's changed quite a lot compared to when I came out and it would it was going to be harder for me not to than it was to that was the that was sort of how I thought about it um coming out to friends they were like finally Julie you've realized it welcome well it wasn't there a quote from your friends at uni is like oh julie we knew that wasn't it we're just waiting for you to find the right time exactly exactly um and my parents were both immensely supportive so but i didn't come into the city assuming i was going to be able to be out so notwithstanding what i've just said about jp morgan's contract i remember i swiped my id card through when i got it on day one i swiped it through used it on the second morning about 7 15 in the morning going into 60 victoria embankments offices and i remember thinking i leave the real me on the outside and i pick her up on the way home.

16:36The idea that someone like me who was working on a big trading floor in the middle of a Wall Street firm in London was ever going to be able to be out just didn't seem possible. I remember the trading floors of the 90s. It was men, men, men. Forget about sexuality. If you were a woman on the trading floor, and I knew some brilliant brokers and traders who were, they were pioneers in themselves because they would go toe to toe with this machismo that was going around the 90s was a tough period to be a woman let alone a gay woman on a trading floor but this is the thing i think being gay made it a bit easier i can explain so the reason i said i came out by accident kind of is that i was actually invited to come out effectively by my boss because i'd inadvertently whilst i was having back surgery and she'd come to visit me in hospital and i'd introduced her to my partner and then three days later when the morphine was taken out drip was taken out i suddenly realized i'd outed myself at the office um and i thought oh what am i going to do about this and this boss of mine then at my end of year review said look this was in the era where you did three years as an analyst four years as an associate seven years as a vp and then if you hadn't made md by that point you might want to think about you know growing sheep and raising yogurt or whatever it was but exactly and um they said well we're going to put you forward for promotion a year ahead of time to become an associate and then she said we can't guarantee you'll get it because it's got to go to committee but if you do we'll evaluate you as an associate not just on what you do for the team but what you do for the wider organization yes and then she took a perfectly timed beat which i still remember to this day and then she said have you thought about joining the lgbt society i can be very dense on occasions but that was a gold-plated invitation to come out from my boss saying we've got your back um and i did the biggest lesson for me was that was a minute of her time that had a lifetime's effect on me and so it's massively good leadership and man management that's why i keep coming back to the people bit it's in those small acts of management that leaders do the awareness of the context of their people that can have this transformative effect best leaders show empathy and kindness that one minute of understanding yeah it perhaps created who you are and oh yeah it's probably had it i wouldn't i i say i wouldn't be in the seats I've been in subsequently if that hadn't happened because the amount of effort it takes to dissemble to be really careful about language to come up with alternative narratives for how you spent the weekend all that kind of stuff that's an intellectual and emotional energy you could be devoting to your work.

19:09Why is coming out good business? My view is that I want to create the best possible environment where everybody who works with me has an equal opportunity to thrive. my job is if I employ 100 people my job is to get the best out of all 100 of them it's not to create an environment where let's say I don't know if this is true but let's say in a global corporation maybe 35 % of the population are straight white men okay if you say who have kind of wives at home who can look after the kids and all that kind of stuff and and know the rules of the game and play racquetball or whatever the heck it is you know are you going to say as an organization we're objectively going to decide to create an environment where 35 % of our staff can thrive but not the other 65 percent my job on behalf of the organization is to enable every single one of the people who we pay and we employ in those seats to deliver the absolute best that they can but everybody brings context to work now whether it's the time you have to get up in the morning and how long you have to drive for or it's whether people have caring responsibilities or whether they have kids or whether there's some other challenge going on in their lives my job is to enable them to live and work, not kind of live to work, as it were.

20:24And therefore, it's about understanding that context. I have brilliant self-starting people who are leading in every seat they're in. They don't need me to tell them that what they do is important. They need me to create an environment where they can do that to the absolute best of their ability with the right structure and strategy and support behind it. I'm very lucky. I've been an MD or more senior in the city since 2004. So the vast majority of my career is a percentage of it. I've been running desks, leading teams. Therefore, for most of my career, the vast majority of the work I do, I do through other people.

20:56You know, it's really arrogant to think that I run and make everything that happens in London Stock Exchange. I don't at all. There's roughly a thousand people who touch elements of what the exchange does every day. They are brilliant, dedicated people who are doing jobs, quite a lot of them technically I couldn't do, some of which I wouldn't have the patients to do you know there's all of those things and I rely on kind of my job is to make sure all of them can do the best possible job that they can do so it's always teamwork it's never about you it's about what is the objective of the organization and what is your particular role as CEO in making that work and I have this phrase that you can lead from whatever seat you're in you know you shouldn't wait for a title for it so you cascade that sense of strategic ownership all the way down through the organization.

21:41And so if I don't set the strategy, what are these brilliant people going to do in service of what? And the day job is the tail that wags the dog. That's the thing you could spend all of your time doing. But if I don't have the right people and select the right people, empower them and then set the strategy, what's actually going to happen? And I think it's having that sense of really understanding what your role is and how you should spend your time. With you, you must actually like those moments where you make that key decision. Okay, you've got a very collegiate attitude. You want as much information as possible.

22:11But to be a CEO, there must be some form of a rush to making those absolutely pivotal decisions and then just saying, it's my responsibility. I own this. Is it a rush or is it just the thing you have to do to get to the objective? You know, it goes back to that being a judge. The decision, the job is to decide. You like making those big decisions, Julia. I do. Yes, I do. That's true. But I make them so that we can move the organization on. It's not to do them for their own sake. I mean, I think most CEOs would probably say this, that by the time a decision gets to them, it's usually big, it's usually serious, and it's usually difficult.

22:54Because by definition, if it wasn't any of those things, it would have been resolved further down the organization already. So disproportionately, the decisions that land up on your desk become those big ones anyway. way, if you think of it as an organization, a sort of mountaintop, the person who's leading the organization is sort of standing on the top with a perspective into the next valley and the next valley, and they can see whether there's a rain cloud coming or whatever else. And their job is to be looking at that kind of horizon scanning. Their next level down is standing just sort of just below the snow line, as it were.

23:22They can see a long way around, but they can't necessarily see what the crop on the valley floor is. But the person who is working at that level can see exactly what the crop is, whether it's healthy, whether it's got a swarm of locusts or whatever else. every part of the organization has a different perspective on the role. And I think you need to have that theory of what that is. And the big call is, okay, well, the climate is changing. The swarm of locusts is coming. Therefore, we're going to change the crop rotation before. The person on the ground is not going to see that. That's not necessarily – it is just the job.

23:59It's not an ego thing or it's not a this is what I get to do. it's a if you think about your theory of what the role of a ceo is that is the job what is the worst decision you've ever made i make i make probably lots of poor decisions in a in a day i don't have one hanging over me that's like i wish i'd done that one differently but if i think about the ones where i go i missed something there it's usually um was i brave enough was it a big enough decision you know did i go for the thing that's the easy because in hindsight we should have been braver in hindsight we should have been braver i've had some kind of big decisions to make in my career um and when i was running a bank in ireland during lehman you make a lot of them and some of them in very very difficult moments um and there was one morning where i had to make tough decision over a weekend i had two weekends in three where i had to make a tough decision and i was driving literally home as the sun was coming up it must have been four in the morning kind of around dublin bay it was stunningly beautiful in that moment it was just me in the car um and i remember thinking it there is no justification whatsoever for not doing the right thing even if the right thing is hard to do you know i want to be proud of every decision i've made, not just tomorrow, but in 20, 30 years time.

25:23And therefore, if that becomes the basis on why you make a decision, you've given yourself permission to take the long view. And even some things which in the short time are not popular or look difficult or have people throwing brick bats at them. If you feel it's the right decision, it's the right thing to do. And if that's logic, it becomes easier.

25:52I'm learning a lot about you. We've had a couple of decent conversations now. And I know that you are stunningly driven. You're one of the hardest working people I've ever met. Do you work too hard? The quote from you in our conversation was, I could make a time machine which would create 48 hours in 24 hours. And the problem is, I don't think you would take more leisure time in that 48 hours. I'm not sure I believe you, Julia. I think you'd be looking at some consultation paper or some IPO listing. One of the great privileges I have is, and you probably shouldn't tell David Schwimmer this, but I've felt in a lot of my career that I do my hobby for a living.

26:34Yeah. You know. Oh, I'm the same. I tell the bosses all the time. I love what I do. You know, I'm endlessly fascinated by it. I'm more fascinated by that than a load of other things I could be doing, like watching TV. And therefore, it's how I get my intellectual goodies. And that is an immense privilege. There's so many people who do jobs where they just literally want to put it down at the end of the day. And they don't enjoy it. And they don't have as much fun as I have every day. And the exam questions that I've answered in my career are the thing that really drive me and get me up in the morning.

27:07But I genuinely enjoy what I do. I love what I do. And I hope the passion for the purpose of what we're trying to achieve is something that I can transmit to my people. and realize that actually it can be fun. Is it a battle for your two grown-up children, for your partner Wendy, for your family more generally and friends to get you away from work? How does Julia Hoggett relax apart from looking at consultation papers and IPO documents? No, it is a battle. I mean, I'm also – I'm very lucky with my partner. Wendy's a wonderful woman. She's also incredibly sociable and fascinated with people and maintains friendship networks and social networks brilliantly.

27:53And I'm basically an introvert who's taught myself to be a bit of an extrovert for my job. And then I met Wendy who actually showed me how much fun it was just because I'm endlessly fascinated with people. You can't be a sociologist and not. But I always had that sort of British reserve of you don't really want to ask and you don't want to pry and all that kind of thing. Whereas Wendy will just, my family sort of described her as the Oprah Winfrey and that she'll go in and ask the question. Everybody wants to know about somebody just with an open heart and an open desire to know and to learn. And it doesn't feel like prying at all.

28:21And they'll all tell her everything she's asked. And then she'll remember it 20, 30, 40 years later and know exactly sort of what's gone on. And she's enabled me to have a social network that I think I probably wouldn't have curated as much if I hadn't had that. So that's a wonderful way of just hanging out with great people. Just spending time with my kids is wonderful. And they'll come in and they'll ask you something random and you'll be taken away from what you're in and focused on them in the moment. But since COVID, Wendy's got me playing golf. And I would, again, a bit like going to the city, I'd have been voted least likely.