Shift at the Big Board

Through the mid-1960s, the job of heading the New York Stock Exchange was prosaic and long lasting. G. Keith Funston ran the Big Board for 16 years, from 1951 to 1967. But as reforms began eroding the "private club" nature of the largest and most important U.S. securities market, the boss's job has turned into a shaky one. Robert W. Haack, now chairman of Lockheed Aircraft Corp., was squeezed out after five years. Last week the climate of change proved too much for another Big Board chief. James J. Needham, chairman since 1972, resigned under pressure with two years to go on his contract.

Needham will be succeeded on May 19 by William Milfred Batten, 67 next month, who spent 48 years at J.C. Penney, the big retailer, before retiring as chairman and chief executive. Four years ago he was named a Big Board director. Aside from his brief exchange tenure, "Mil" Batten has had no experience in securities markets. But the exchange's directors view him as a man who can unify the exchange's diverse elements--at least for the next year or two--and help Wall Street adjust to Government-ordered changes. Among them: the abolition of fixed commissions on stock trades and loosening of the rule that has prevented Big Board members from trading N.Y.S.E.-listed stocks off the exchange.

Easing the transition has been Needham's thankless mission. By the accounts of even his bitterest enemies, his job was an impossible one. He had to negotiate Wall Street acceptance of reforms that he opposed strongly himself because he felt that they would undermine the pre-eminence of the organization he headed. For example, he favored the idea of one central U.S. securities market, as long advocated by the Securities and Exchange Commission, but he left no doubt that he wanted the N.Y.S.E. to be that market. The SEC, on the other hand, wants a computerized network that would tie together all U.S. stock exchanges.

Now 49 and a former member of the SEC, Needham was not the first or even second choice of N.Y.S.E. directors to become the Big Board's first full-time chairman and chief executive under a sweeping reorganization that abolished the old board of governors. It was replaced with 21 directors--ten elected from the brokerage community, ten from the business community at large, plus the chairman. Directors thought that Needham's commanding demeanor and SEC background would help Wall Street in coping with change.

It did not work out that way. The Big Board's boss must win the support of numerous, and sometimes quarreling, constituencies--the brokers who deal with the public and the specialists and floor traders who work inside the exchange. Needham had that support at first, but gradually lost it as his stands on crucial issues alienated one group after another. He would, in Don Quixote fashion, stand against reform long after almost everyone else had given up and prepared for the inevitable. On one occasion, Needham took a George Wallace-like vow to meet the SEC "on the courthouse steps" to block the abolition of fixed commissions--then he failed to carry out his challenge.

Powerful Wall Streeters began looking for a replacement last year. One who was considered: Melvin Laird. Two weeks ago, Batten was persuaded to take over the chairmanship while Needham was in Europe. When Needham returned early last week, he was presented with a fait accompli. He resigned. His successor Batten may well be only a caretaker chairman. Among candidates to succeed him eventually: Paul Kolton, current chairman of the American Stock Exchange and Donald Marron, the brilliant (IQ: 190) chief of Mitchell, Hutchins, a Wall Street brokerage house. Needham plans to stay on as a consultant to Batten. But he rejected the Big Board's No. 2 post of president. That, in the view of one exchange officer would have been like descending from hotel boss to men's-room attendant.

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