Trailblazing capital markets as a female leader and the rising twin transformation in Europe

[MUSIC PLAYING] * Announcer: *Welcome to Viewpoint-- A TD Securities Podcast. Listen in as we draw perspectives from a variety of thought leaders on key themes influencing markets, industries, and the global economy today. We hope you enjoy this episode.

Amy Van Arnhem: Welcome to episode 17 of Viewpoint-- A TD Securities Podcast. I'm your host, Amy Van Arnhem, Managing Director and Head of Canada Senior Relationship Management at TD Securities. In recognition of International Women's Day, I have the pleasure of inviting Sharon Kim, Executive Managing Director and Regional Head of Europe at TD Securities, to join us. As Region Head of Europe for TD Securities, Sharon is in charge of setting the strategic direction for both the UK and the European continent. Sharon brings over 25 years of industry experience since joining TD Securities in 2006. She has held increasingly senior roles and has served as Co-Head of Global Foreign Exchange. Sharon has been intimately involved in TD Securities' diversity and inclusion recruitment efforts, and served on the Board of Women in Leadership Executive Committee, and is actively involved in the firm's Women and Technology Community. In 2019, Sharon was also awarded the Women's Executive Network Canada's 100 Most Powerful Women Distinction in the Trailblazer and Trendsetters category. So it goes without saying that you have an extremely impressive background, and I am very honored that I get to speak to you today to commemorate International Women's Day. You're not only an amazing mentor to many colleagues at TD Securities, but you're also a respected and admired businesswoman and leader. And I just personally have learned so much from you over the years, so thank you very much for joining us today.

Sharon Kim: Thank you for having me. I kind of jumped at the opportunity when I heard that you are going to be hosting this, because you and I have a rapport and a good history together.

Amy Van Arnhem: Yes. So I think we're going to have fun over this particular podcast. Yeah. And this topic, too, is near and dear to both of our hearts, and obviously, supporting women in leadership roles at TD Securities. So maybe just to start off with, I think it would be really interesting for the listeners to hear a little bit more about your career path and how you got to where you are today.

Sharon Kim: Sure. So-- I mean, I can, I guess-- well, you read out that I've been in the business over 25 years. So I can back it up a little more than 25 years to talk about how I ended up in this business. My undergrad was-- I thought I was going to go to med school. So I was doing orgo and physics and so forth. And I got to the end of my undergrad and wrote the MCAT. I wrote the dentistry exam as well. Wrote the LSAT. And then I decided that each of those fields were a little bit too narrow for me. Too narrow for somebody who had not yet made a decision on what she wanted to do with her life, because it felt like an MBA was the broadest of some of those sort of professional schools or master's programs, so that I could continue to keep the options open. Ended up doing financial engineering, which was sort of down the middle for me because I had a strong math background. And it was during my MBA program that I made some friends with people who were doing co-ops at large trading floors, like Citi Bank, CIBC, and it was sort of a, whoa, what's that? And it suddenly felt like this career path was an amalgamation of a lot of the things that I was good at and things that I liked. So, immediately applied to all the rotation programs in Toronto. And so from there, it was a very typical path onto a rotation program-- not at TD, different Canadian bank-- and spent a couple of years in the trenches, so to speak. The funniest was on the hottest days of the year, when it was like 35 Celsius outside, they would send me for soft serve ice cream. And it was a desk of, like, 16 at the time, so you'd come back with melting ice cream down your arms. Like, your arms are shaking because it's so heavy.

[LAUGHS]

Sharon Kim: I very quickly moved to a different bank, a French bank, thereafter and worked as an options structure in the FX side. And that bank closed all their Canadian trading operations and I ended up unemployed. This was late 2005, early 2006. And somebody had introduced me to Moti, my former boss, who was previously head of capital markets at TD Securities, and he hired me on the spot.

Amy Van Arnhem: Wow.

Sharon Kim: Which--

Amy Van Arnhem: You must have made an impression.

Sharon Kim: Well-- and it was also some time ago. I don't think we do stuff like that anymore.

[LAUGHS]

Amy Van Arnhem: That's fair.

Sharon Kim: We usually have a more thorough intake process. And so he did hire me on the spot and put me onto the institutional sales desk. I was a VP at the time and I was actually running that.

Amy Van Arnhem: Is that in foreign exchange?

Sharon Kim: Yeah, in foreign exchange. Which, again, I don't think we do that anymore. I don't think we'd take a VP and give that much responsibility. But it was really fortuitous. It was just ahead of the financial crisis. And TD was just an amazing place to be during the financial crisis. The clients were tripping over themselves to face TD. And so we absolutely ran with that opportunity. And of course, we told all our bosses, it's us.

Yeah. It's not the market, it's not our credit rating. And so it was really able to build a profile during those years. And since then, I've just been asked, within Foreign Exchange, to take slightly different mandates, variations on this theme. So, took on Corporate Sales, took on Commercial Sales and Retail and Wealth, and then we globalized the role. And then, yeah, added the trading piece into it. So I've been very focused on product, product, product. And then about six months ago, somebody said region.

Amy Van Arnhem: Yeah.

And I was asked to take on the European Region for TD Securities, which is London and Dublin. And that's how I landed in the seat about four months ago. And it's been a whirlwind since then.

Amy Van Arnhem: Well, yeah. And I am going to get to some questions around how that is going for you, but I would like to take it maybe back a little bit. Because one of the things that you said to me in the past was, when you started, sort of in the first role you were in, but even the subsequent roles, you were one of very few women. And so I was hoping just-- you could speak a little bit more about how you navigated that and what were some of the key things that you did that allowed you to reach the success you've reached?

Sharon Kim: Sure. So I would say early in my career, I was really not conscious of being a woman. It sounds contradictory, but I really was not focused on the gender piece whatsoever. In fact, I really didn't think about it until I became a people manager. So as long as I was a single producer, it was all about getting the job done, proving yourself, showing that you can do a good job, getting all the technical acumen under your belt. And then, like I said, I think that the tipping point came for me when I realized that I had influence in making hiring decisions. And that's when you have the ability to change the numbers ultimately. I think the other piece, whether I was junior or as I became a people manager, is always putting the business first, as opposed to me or my career path. I've actually never really had to worry about my career path. It's always what's best for the business. So in other words, always strategy first. And I think that's helped me through. And really cut through any of the-- like I said, some of the gender sensitivities.

Amy Van Arnhem: Well, I think it is important. That's important advice for people to keep in mind as well. I mean, there is that balance of you want to support diversity, but you also do need to keep your head down and focus on getting the raw skills you need to be able to be successful. So it is finding that balance, so that's interesting. And as a people manager, when you moved into that role, how did that-- how did things change for you? And then how did you take that "more diversity" lens and try to encourage that within your business?

Sharon Kim: So I've been pretty vocal. I'm very interested in moving the numbers.

Amy Van Arnhem: Mm-hmm.

Sharon Kim: And I really thought that was one of my responsibilities as a people manager, to influence that and really shape the business. And so I'm quite proud that when I left the Foreign Exchange business, we had the highest representation of women of any product group in TD Securities. So I've been very focused on the numbers and the representation. I think that the industry as a whole has done a tremendous job, and especially TD Securities, on that really organic good intention. And there is a lot of goodwill and support, but now we need to find traction. And so I have been known to do things such as really push my recruiters or my headhunters. Bring me X percent of women. I've put a lot of pressure on my directs as well, and they know it, but your year-end evaluation is going to be a reflection of how diverse your teams are and the decisions you've made through the year to do that.

Amy Van Arnhem: Yeah, well, I'll speak from personal experience. I sat within your management team for a short period of time before you moved your roles, and there was such a huge group of talented individuals and talented leaders, and you can really see that focus from them. And you could really see the inclusive nature and the culture that you've built in that business. So I can say, like, I applaud you for that, because I did notice it tremendously.

Sharon Kim: That's really gratifying. And, I mean, I totally know that I was pushing on them that when you're reporting to somebody, you want to please them. And so they were, I think, going the extra mile.

Amy Van Arnhem: So just changing gears a little bit and talking a bit more around your mentorship and coaching that you've done in the past-- and this will be the last question that we really hone in on women in leadership, but what is the best advice you could give to women that are pursuing their careers and to the next generation of female leaders, not just in the capital markets business, but just more broadly?

Sharon Kim: I would say keep your head up. And what I mean by that is we do have a tendency-- again, in the early part of our careers-- to be head-down, get the work done, gain the technical expertise, show how productive you are. You need to get your head up and take a look around, look at where the industry is going, look at where your organization fits within that path, where the regulation's moving, where do I fit in this? In other words, get your head up and be strategic. And I think-- I wish I had been more strategic earlier in my career. I think I was very focused on production. For me, the "being strategic" part actually is the most gratifying part of the job.

Amy Van Arnhem: Yeah.

Sharon Kim: And I think, again, if you always put the business first and the business needs, then things tend to work out.

Amy Van Arnhem: OK, so changing gears, I want to go back to what we were talking about before, which is your new appointment. So first of all, congratulations. You were appointed as Region Head of Europe at TD Securities. And so I want to hear a little bit about how that transition has been and how your responsibilities and strategic direction changed since taking that role.

Sharon Kim: Sure. So I was approached, like I said, about six months ago to take over the European region, and I was shocked. This is not something that we talked about months or years in advance. This came out of left field. So it did take me about 24 hours to process it. And really stupid things went through my head. Like, who's going to water my plants? I can't go!

[LAUGHTER]

Sharon Kim: And so-- but once I came out of that stupor, I recognized that it's just an amazing opportunity. There's so much potential for TD Securities in Europe and on the continent in particular. And one of the first things that my new boss, Riaz Ahmed, had said to me was, "I need you to set a strategy for Europe." And I looked back at him blankly. I was like, "What do you mean 'set a strategy for Europe?' Like, don't we have a strategy?" And he repeated, "Set a strategy for Europe." And I was like, "Holy crap. I need to set a strategy for Europe!" Really, what he meant, and what I learned very quickly, is that in this post-Brexit world, every bank that is not already domiciled on the continent had to hurry to stand up in legal entity because just about everybody was focused on activity out of London. So in everybody's knee-jerk reaction, everybody stood up entities. And we didn't have the foresight, clearly-- nobody did, it's not unique to us-- to know what Brexit actually meant. But it truly is a division covering the European continent from Europe and covering the UK from the UK. And so we've stood up this entity, and we're at this point where it's, now what? What do we want to be when we grow up in Europe? So that's what we mean by setting a strategy for Europe. And so really, what I've been spending the last few months is-- I think the strategy for Europe really is the sum of all the different businesses that want to be domiciled there, and being able to stitch it across the top and create a great narrative for that. And of course, it's not just the narrative stitched across the top. It is, if the businesses want to go to a particular point, what is the infrastructure? What is legal entity type? What are the capital models? What is the balance sheet that they need to support that? So how do we underpin that aspiration? It's tricky because the goalposts of the regulations are still evolving. And so we might get something right for the next two or three years, but what if the political mood music changes and, in year 4 or 5, it's completely wrong? So we have been particularly sensitive to creating scalability and optionality in our plans, but it's also a very expensive endeavor, so we need to make sure that this all makes sense for us. As you can imagine, you don't just stand up a bank in a new city just because you feel like it. There's a lot of regulatory engagement along the way. Having said that, we've got a great track record with our regulators. We're clearly a reputable bank. We clearly have a very strong credit rating, and so I think that is what we bring to Europe. And I think the opportunity set is just enormous. I think we're a strong-- our brand has a strong US dollar house, and there is a need for that. There is a need for highly-rated banking entities as well. And on the macro front, there are-- I see a couple of major opportunities or trends that are unique to Europe that we want to participate in, and that is namely the ESG revolution, which is paired with the digital revolution or the Twin transformation.

Amy Van Arnhem: Yeah.

Sharon Kim: So I just think that-- in addition to all the contours or the secular trends in the macroenvironment, those in particular I think we want to be involved in as well.

Amy Van Arnhem: Can you go back to what you said, which was the ESG and digital, and can you talk a little bit more about what that actually is and what excites you about it?

Sharon Kim: So it wasn't obvious to me when it was first explained to me why it's a trendful revolution.

Amy Van Arnhem: That's right. I would like some kind of--

Sharon Kim: So we do know that Europe is on the forefront of the ESG-- the climate transition in particular. In order to manifest that, in order to push that, you're going to need a digital capability. So here's a really easy example. You have a house that needs double-insulated windows or double-layer windows. How are we going to know that you've actually improved your house? There has to be some sort of digital surveillance. Tracking, for example. Or your smart house-- we can read or record the amount of energy it uses to heat a home. So it's very much around pairing of the two, because you can't evidence one without the other. So digital is helping to essentially monitor and help evolve the ESG so it becomes apparent. Interesting. Or when you talk about charging your car, but you can put some back to the grid.

Amy Van Arnhem: Right.

Sharon Kim: That would be a digital requirement.

Amy Van Arnhem: So it's hard to separate the two and to-- they start to almost become dependent-- interdependent on each other.

Sharon Kim: I mean, I guess you could say everything is dependent on digital anyway.

Amy Van Arnhem: Yeah, that's fair. It sure seems like it.

Sharon Kim: But yeah, I think-- and for the banking environment, there is some really interesting ramifications. For example, if you pledge your building as collateral on a particular loan, the quality of that building may or may not degrade, may or may not be upkept. But there are going to be regulations that require the upkeep, and so your collateral may corrode. We have an eye on pieces like that as well for the banking environment.

Amy Van Arnhem: That's interesting. So you mentioned quickly around just sort of the macroenvironment, but maybe just speaking to the markets and what you're expecting for the UK and the European markets just generally.

Sharon Kim: So I think we're in a little bit of a-- I don't know if you call it a honeymoon period on growth where we've had clearly quite a bit of tightening around the world. But the numbers, they've softened a tiny bit, but they're still relatively robust. We've still got pretty hot inflation. We've still got pretty hot growth, to the point where people are, what I think, misconstruing the idea that we might dip into a recession. What I think it is is that it typically takes 18 and more-- like, 24 months-- for tightening to manifest. So we're still not there yet. So I actually think that 2024 is going to be where we feel more of the pain. But we're enjoying that-- like I said, the honeymoon before things drop off.

Amy Van Arnhem: OK.

[LAUGHTER]

Sharon Kim: But we've had, what, about 450 points of tightening just in the US alone. We still probably have another 40 points before terminal, and that obviously keeps moving. Europe has also had tremendous change on their policy rates. And again, we haven't seen the implications yet. I think the trouble comes in 2024. In the meantime, I've been fascinated by-- it's not just that we, as a market, have been all over the place on trying to predict terminal, but the shape of the curve in particular. For the last year, the markets priced a really peaky terminal rate. Get to terminal and just drops off very quickly. We're starting to flatten that plateau a little bit, but I still don't think it's flat enough. I don't think people are recognizing how long rates are going to have to stay high. You don't automatically flip over. You need several quarters of data to manifest before you make that decision. So I think that is also going to be a future drag. I'm not typically a pessimist. I just think that we've been in a period of zero rates across all curves for so long. And so if you think normal or the way you've been trained has-- in a zero-rates environment, I think we have some really interesting, I think, fun trading conditions ahead. Having been raised in an exceptionally volatile period, this feels like normal to me.

Amy Van Arnhem: OK. You're comfortable here.

Sharon Kim: I think, yeah, like I said, there are going to be an amazing opportunities on the trading side because we finally have differentiation, whether it's across curves, across regions, across products. It's not all data 100%.

Amy Van Arnhem: Yeah. OK. Interesting. I have one final question for you. I mentioned before that, for a very brief period of time, I reported in to you. And I just want to know if I'm your favorite all-time employee.

[LAUGHTER]

Sharon Kim: Yeah.

[LAUGHTER] Amy Van Arnhem: I'm just kidding. But no, in seriousness, thank you so much for joining today. This is a great conversation and I appreciate your candor as always and your insight.

Sharon Kim: It's my pleasure. Thank you for having me.

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