How's Donaldson Doing?

After a year, the SEC chief has accomplished more than many expected. But as resistance rises, will he be able to finish the job?

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On the frigid morning of Jan. 30, Securities & Exchange Commission Chairman William H. Donaldson huddled with a dozen top staffers in Alexandria, Va. For four hours, they sat in a windowless room discussing what they thought the agency was doing right and wrong, and how it could do better. Over coffee and delivery pizza -- everyone anted up $4 -- the group batted around ideas on issues ranging from mutual funds to market regulation. The result: a long to-do list.

The off-site brainstorming session is the latest sign that Donaldson is kicking the 3,100-person agency into high gear. When the Wall Street veteran came out of retirement a year ago to head the SEC, many saw him as a caretaker who would keep the agency out of the headlines after the controversial reign of Harvey L. Pitt. Donaldson, 72, has indeed been low-key. But he has surprised backers and critics alike by emerging as a quiet crusader for reform and an able manager who has restored the battered agency's esprit de corps and unleashed the nation's securities cops in bold new ways.