Even a casual observer could see that Mary Alice Brophy is about to enter a minefield.
The director of compliance at Dain Bosworth in Minneapolis, Ms. Brophy, 48, last week was elected to chair the board of governors for the National Association of Securities Dealers. It's a powerful, prestigious position that commonly has been held by chief executives.
And always has been held by a man.
Founded in 1939, the NASD oversees both the nation's half-million securities brokers and the Nasdaq stock market, the country's second largest. Therein lies its problem, say critics, who charge that the NASD can't adequately serve both roles.
Ms. Brophy has sat on the board for the past two years and currently chairs the National Business Conduct Committee, which reviews some 1,000 complaints a year against brokers.
Despite the visibility of that job, committee colleagues say she was "stunned" to win the top board position.
A personable woman described by colleagues as tough but fair, Ms. Brophy ascends to the chairmanship -- as she insists on calling it -- at a crucial time.
An independent committee review led by former Sen. Warren Rudman of New Hampshire has prompted a restructuring of the NASD. For the first time, nonindustry people will join the NASD boards, a move that Ms. Brophy welcomes.
"Part of self-regulating the industry is protecting the public," she says. "So it makes enormous sense to have public representation on the board."
As of March, when the restructuring is expected to be complete, the NASD's functions will be divided. Ms. Brophy will chair a new regulatory board, which will oversee the NASD's discipline of individual brokers.
Another board will oversee the Nasdaq market, and a third will oversee the entire organization.
The regulations board that Ms. Brophy is slated to head will continue to be responsible for the conduct committee and all other NASD regulatory functions: complaint handling throughout the districts, examination of member firms, education of brokers within the industry.
"The only key issue we won't be dealing with [that the board handles now] is the operation of the Nasdaq market," Ms. Brophy says.
That's exactly what the Rudman report wanted.
"The main goal here is to put some daylight between the regulatory function of the NASD and the day-to-day operation of the Nasdaq stock market, so there isn't a perception that the fox is guarding the chicken coop," says NASD spokesman Marc Beauchamp. "That's the perception some people have, that there's a conflict of interest."
Some government officials certainly think so.
The NASD is being investigated by the Justice Department to see whether large securities firms, known as "market makers," colluded to boost their brokers' profits by keeping stock prices artificially high. If such actions occurred, they could have penalized both individual investors and small brokerage houses.
The Justice Department recently claimed that the NASD has not fully cooperated with the investigation. Ms. Brophy calls it a case of lawyers fighting lawyers, a brouhaha that got blown up by the press.
"The NASD has turned over 2 1/2 million documents. We willingly cooperated with the Justice Department," she says.
The Securities and Exchange Commission also is threatening to examine the NASD under a microscope. SEC Chairman Arthur Leavitt addressed the board earlier this month.
"It was not a warm, friendly meeting," says Ms. Brophy, who politely declines further comment.
Once she assumes the chairmanship in January, Ms. Brophy will have as one of her first priorities to blunt some of the NASD's recent bad press.
"We're not going to change that overnight," she says of the NASD's tarnished reputation.
"The facts and real truth will surface themselves. But we need to be more assertive in getting the word out."
Her main agenda will be to put the restructuring in place during a pivotal year for the organization. The NASD is not just going public with its restructured boards. In a very real sense, it is growing up.
The NASD started a decade after the founding of the SEC, which itself followed the stock market crash of 1929. While the SEC assumed the grandfatherly role of protecting small investors, the NASD was "a businessman's forum," says Ms. Brophy -- a place for peers to judge peers and guard against egregious industry violations.
The number of stockbrokers nationally has more than doubled since a young Ms. Brophy was Minnesota's Commissioner of Securities and Real Estate in the early 1980s.
The Nasdaq market, which the NASD founded in 1971, is upgrading its computers to handle billion-share trading days. Its capacity now is 400 million, "which looked like plenty," Ms. Brophy says.
Ms. Brophy knows that the business has become tougher, increasingly legalistic. But it's a challenge that she says the NASD can meet.
One hallmark of the reorganization will be increased staff to review complaints against brokers. That, says Ms. Brophy, will free the board to focus on regulatory policy and "big picture" issues.
Ms. Brophy's board chairmanship will last throughout 1996, a year during which she expects to work around the clock. She knows she'll be judged by her ability to regain credibility for the NASD.