Profile – Ann Kappler, Executive Vice President and General Counsel at Prudential Financial

In autumn 2020, Ann Kappler took on a new role as Executive Vice President and General Counsel at insurance company Prudential Financial. She arrives in the job at a time of transformation for the company and of pandemic-induced disruption for the world, as In-House Perspective reports.

Ann Kappler has stepped up to take the reins as Executive Vice President and General Counsel at insurance company Prudential Financial. As of early September, she has had responsibility for the law and the compliance departments, for business ethics, and for external affairs.

Having been Senior Vice President, Deputy General Counsel and Head of External Affairs for six years, Kappler was very prepared to step into the role when her predecessor Tim Harris retired. In total she has 12 years’ experience with the company across a variety of roles.

‘I know the business, I know the people and I know my colleagues, so that makes it a whole lot easier to transition into the role,’ she says.

Transition and transformation

She has entered this role at a time of change for the company. ‘We are as a company looking at a transformation initiative that is designed to take us where we want to be operationally for the decade to come’, she says.

Every function of the business, including the legal department, is looking at how to become more efficient and effective. Kappler’s team are working to position themselves as more agile and responsive to customers, but also to the business as it transforms.

The transformation is a comprehensive initiative that includes focusing on opportunities to increase agility or efficiency, create capacity, better deploy and use technology to support global compliance programmes, and develop robust outside counsel management. ‘We have about 400 law firms – that’s not particularly efficient, so we have an initiative going to look at how we can be smarter in terms of using our capital.’

But beyond the company-wide transformation, Kappler says she has ‘the luxury frankly of taking over a department that is incredibly strong. I have felt no need to come in and shake anything up. Instead, I feel it’s my responsibility to ensure that it remains this strong’.

‘We have incredibly smart, dedicated people and we’re a purpose-driven company that I think we as individuals within it really believe in’, she adds.

An employee survey recently found both in Kappler’s department and across the whole company, notwithstanding Covid-19, that staff are very engaged and have a high level of belief in the purpose of the company.

The Covid-19 pandemic has, however, undermined some of her transition plans. ‘What I really miss, and regret, is that I can’t go out and meet all my department colleagues,’ she says.

If it wasn’t for the pandemic, Kappler would be planning a trip to Japan, for example, to visit compliance professionals and lawyers in the company’s Japan offices. She would be visiting South America, where Prudential Financial has a large operational base. Instead, she is having to make those visits virtually, over platforms like Zoom.

‘I can make myself available and answer questions but it’s not the same as actually meeting with people and getting to know them personally,’ she explains. ‘I’m looking forward to when I can visit colleagues in person but, unfortunately, I think it’s going to be a while’.

Good has come out of this period, though, as Kappler has become more sensitive to the needs of the company’s employees.

Culture is key

‘What really keeps me up at night is caring for my colleagues who are in the department, because so many of them are in circumstances where they are trying to juggle the pressures of home and work, as well as environmental and societal issues,’ she says.

Kappler highlights that the company has made all kinds of support available for individuals but ‘that doesn’t mean it’s a perfect solution. I spend a lot of time messaging with managers to make sure they are very close to their people, understanding what their individual needs are and being as supportive and flexible as we can be to support people’.

Globally, there have been concerns that the pandemic is undoing decades of progress in gender equality and women’s participation in the workforce.

In the US, the Bureau of Labor Statistics reported that as of February 2021, nearly 2.4 million women exited the workforce in the past year, compared with 1.8 million men, which could have dire consequences for the country’s economic growth. In December 2020, women accounted for 100 per cent of net job losses in the US, with women of colour hit worst with job losses throughout the year.

Instead of increasing equitable domestic and childcare work sharing between the genders, the pandemic has forced regressions into traditional patriarchal gender roles. A New York Times survey found that 70 per cent of women reported being fully or mostly responsible for housework during lockdown and 66 per cent reported the same for childcare.

The Center for American Progress meanwhile reports that four to five times more partnered mothers than fathers of young children have reduced their work hours during the pandemic – with a significant knock-on impact for their future career and earnings.

Kappler is keen to avoid this fate for staff. ‘As the senior management of the company, we don’t want to come out of this finding that women have taken a step backwards because they have somehow had to curtail their professional lives in order to support their family lives,’ she says.

‘As the senior management of the company, we don’t want to come out of this finding that women have taken a step backwards’

‘We’ve been trying to think about how we can be as supportive as possible, through things like having extra resources to help supplement childcare, among other things.’

Beyond the pandemic, Kappler puts emphasis on the culture of the workplace being key to retaining a diverse and engaged workforce. She believes this culture is incredibly important, whether in a law firm or a company, in terms of the organisation’s ability to fulfil its objectives. ‘If you have a company where some people feel as if they’re bullied or discriminated against, or not able to bring their whole selves to the workplace, then your firm is not living up to its full potential. So it’s something we really care about at Prudential.’

In 2019, the IBA released a report containing the results of a landmark global survey into bullying and harassment in the legal profession. The report revealed that 45 per cent of in-house lawyers reported bullying and 98 per cent of incidents occurred in the workplace. Twenty-six per cent of in-house lawyers responding to the survey reported experiencing sexual harassment.

Kappler says she has been fortunate in that she has never worked in an environment where she has seen or experienced any kind of bullying or sexual harassment. ‘In fact, I’ve been in places – and it’s certainly true for Prudential – where it’s really not tolerated, even if the perpetrator is high up.’

‘It is the responsibility of the leaders, but it is also the responsibility of everybody to hold true to the principles of the organisation and speak up if they see something that transgresses those principles’, she says.

In fact, across her career trajectory, Kappler has ensured that every place she has chosen to work has been a place that she feels has a healthy culture. The tone at the top of the organisation sets the culture. ‘As leaders, if you tolerate a culture that is abusive to any of your employees, then you are fostering that culture as a whole in the organisation. You are what you tolerate,’ she says.

‘Every place I’ve worked, there were women in leadership positions, and I do think it made a difference. Diversity in general is important because it brings different perspectives to the workplace, which helps shape the collective perspective of the environment,’ she says.

‘As leaders, if you tolerate a culture that is abusive to any of your employees, then you are fostering that culture as a whole in the organisation’

Winding road

Diversity has been reflected in the flow of Kappler’s career as well as the leadership of her workplaces, as she moved between the judiciary, private practice and in-house work.

After two years of clerkship in Washington, DC, following law school, Kappler faced her first crossroads: government practice or private practice. ‘I’ve always been really interested in public policy issues so there was an attraction to government, but I decided I wanted to go into private practice for a while to see where it took me.’

She ended up spending ten years at Jenner & Block, where she became a litigation partner, in Washington, DC. She joined the appellate practice, but knew she wanted to work on issues that were impactful as well as interesting. Kappler joined the firm’s large first amendment practice, and then fell into working with clients who represented sellers or distributors of insurance companies. She worked with regulators and legislators, and enjoyed the opportunity to take on legislative issues.

‘For me, it was a fascinating area,’ Kappler says. ‘It fell right into my sweet spot of thinking about issues from a public policy perspective in the legal arena, where I could use my litigation skills, regulatory skills, and learn a lot about the financial industry.’

Her next move took her in-house. She received a call asking if she wanted to go in-house at Fannie Mae, the US Federal National Mortgage Association. ‘It was a time when I was ready for a change, and I was interested in the idea of going in-house, particularly at Fannie Mae as it’s a purpose-driven company aimed at providing housing, with a huge effort around affordable housing.’

‘It also, frankly, was going to give me an opportunity to work for a woman general counsel’, she adds. The vice-chair was also a woman whose work for the US Department of Justice Kappler had long admired.

Kappler learned a significant amount at Fannie Mae, and eventually became the Executive Vice President and General Counsel. ‘I learned how to interact with a board of directors, learned how to run a department, and be a leader.’

She stayed for seven years, but the time came to look for something new. Kappler returned to private practice for a short time, but had realised that what she really loved was being in-house. ‘I like being part of an enterprise and not just serving the enterprise from the outside. I like being part of a business and understanding the business missions, and also I’ve found I really like the management side of it,’ she explains.

Looking for another opportunity to go in-house, she found a place at Prudential Financial. She joined as Vice President, Chief Legal Officer, Corporate Services in 2009. Within a few years, she had progressed through three more roles across departments. By autumn 2015 she took her spot as Senior Vice President, Deputy General Counsel and Head of External Affairs, before landing her current role.

‘It has been a fabulous experience for me, both professionally and personally,’ she says. ‘It’s a great group of people to work with. And it’s a company with a mission I believe in – it serves a social purpose both in the United States and all the countries we’ve worked in, in terms of addressing financial fragility and making people’s lives better by solving their financial challenges’.

Adapting to the times

Social purpose is clearly key for Kappler, across a range of issues. ‘We, as a company and a department, are very focused on the social issues that are really front of mind here in the United States, such as racial equity’, she explains.

Kappler is part of the racial equity taskforce that the company has put together to address the impact of systemic racism. The taskforce has a three-pronged approach: looking internally, asking what could be done in terms of hiring, development and promotion aspects of the talent pipeline; from a business perspective, asking how the business can create more opportunities to reach underserved markets, particularly the middle market, which is inclusive of the Black community; and finally a policy perspective, where the taskforce is considering where the company can use its voice to try to advance change, including through corporate social responsibility.

The company has also been at the forefront of looking at the environmental aspect of environmental, social and corporate governance considerations, Kappler says. She highlights Prudential Financial’s sustainability report, which has been an ongoing initiative for several years now. Environmental concerns are key from a business impact perspective, but also in terms of business interests. ‘Where things are moving, particularly for the life insurance industry, is to think about the exposure of your investment portfolio to climate breakdown,’ Kappler says.

‘And not only with regard to disclosing where you may have some exposures, but actually doing stress testing,’ she adds. ‘The regulators are moving to a point where they are actually going to be asking us to stress test our assets to report to them where they may be subject to stress from climate change.’

‘The regulators are moving to a point where they are actually going to be asking us to stress test our assets to report to them where they may be subject to stress from climate change’

For example, Prudential Financial is involved in a significant amount of real estate investing. As a result, the company is examining where that investment is located geographically and whether it’s an area at risk.

‘We, like other companies, have been looking at how we can do more green investing, and we’ve issued a green bond. We are doing more and more investing in sustainable energy, and that’s only going to increase,’ Kappler adds.

Of course, the industry is also having to adapt to the new reality of the pandemic. Kappler says the pandemic particularly raises questions around business interruption insurance, and for most policies, pandemics like that caused by Covid-19 were never anticipated to be part of the coverage.

She compares the situation to how the US has thought about matters such as flood insurance, or even terrorism. ‘It calls for a solution that is somehow a combination of private industry and the government, because it’s hard to understand how the insurance industry can cover all the risks,’ she says. ‘It needs a partnership, because it’s not as if you can measure the pandemic precisely and look at it through a [statistical] perspective which is how most insurance is driven. The issue is just not understood enough to be able to underwrite it in that kind of way.’

‘[The pandemic] calls for a solution that is somehow a combination of private industry and the government, because it’s hard to understand how the insurance industry can cover all the risks’