President George W. Bush ’68 nominated William Donaldson ’53, founding dean of the Yale School of Management, for chairman of the Securities and Exchange Commission Tuesday.

The SEC is entrusted with protecting investors, maintaining the integrity of U.S. securities markets, and reporting any financial infractions. Donaldson’s appointment comes on the heels of former SEC chairman Harvey Pitt’s Nov. 5 resignation and amid investor qualms over corporate corruption.

“Bill Donaldson will be a strong leader with a clear mission, to vigorously enforce our nation’s laws against corporate corruption and to uphold the highest standards of integrity in the securities markets,” Bush said at a White House press conference.

Bush said he will petition Congress to double the SEC’s 2002 operating budget by 2004.

Although Donaldson, a former investment banker, told the national media he would not delineate his specific plans for the SEC until the Senate confirms his appointment, he gave a rough sketch of his basic philosophy.

“Confidence in the U.S. corporate and financial industries has been seriously eroded during the past few years,” Donaldson said. “Despite the historical soundness — and integrity of American industry as a whole, there have clearly been numerous instances of serious malfeasance, which, if proven [to be true], we will continue to deal with swiftly.”

“It’s time for all of us to pull up our socks,” Donaldson added.

At Yale, close personal friends and SOM faculty members applauded the nomination and expressed confidence in Donaldson’s ability to manage corporate America.

“I think he will use his background to be very tough on corporate transgressions, but also very fair in his approach,” SOM Dean Jeffrey Garten said.

Garten, whom Donaldson called an hour before Bush announced the appointment, said he thinks the President made an “inspired choice.”

“No one could be a stronger symbol of the need to restore integrity to the markets,” Garten said in a press release.

Donaldson has an extensive record of experience in the business world. In addition to founding and serving as the first dean of the SOM, Donaldson has served as chairman of the New York Stock Exchange and operates his own firm — Donaldson Enterprises.

SOM professor Paul Bracken described him as “one of the leading businessmen” in America with a great concern for confidence in financial markets.

“I think Bill will be fair on business issues and be very tough in enforcing the existing laws of the SEC,” Bracken said. “He would be aggressive in creating new regulations to take account of the problems of the past year in corporate America.”

Rick Antle, SOM associate dean and professor, said recent legislation aimed at reducing corporate crime — in particular the Sarbanes-Oxley Act Bush signed in July — is only a start to increasing investor protection. Leadership from the SEC is essential, he said.

“Chairman of the SEC is an important position… It is the ultimate body in charge of policing capital markets,” he said. “Donaldson has the potential to enact change by setting the right tone and policies for the commission.”