Johnson Makes Rare Speech as Fidelity Deals With Harassment
Even Abigail Johnson is struggling with the treatment of women in the world of finance.
(Bloomberg) -- Fidelity Investments’ Abigail Johnson took center stage on Tuesday and counseled money managers gathering in Washington about charting their future in the digital world.
But the chief executive, a featured speaker at one of the industry’s biggest conferences, is also struggling with a stubborn legacy of the past: the treatment of women in the world of finance.
Over the last two months, Fidelity, one of the largest investment companies, has dismissed two portfolio managers -- one over allegations of inappropriate sexual comments and another over claims of sexually harassing a female junior employee.
In the speech, Johnson said she wants to create a workplace that is free of sexual harassment.
“I won’t tolerate it and nor should anyone else," Johnson said. This is “critical” for the industry, she said.
Johnson added that much had changed since she was a Fidelity equity analyst in 1989, “but have we advanced enough is the question we are all confronted with now.”
There remains a gap between current policies and the behaviors that many men and women experience in the workplace today, she said, adding that “for us to build a better future it is important for us to create a culture where bad behavior is not tolerated.”
The departures at Fidelity join a growing number of such cases that have been roiling industries including Hollywood, Silicon Valley and television. Women who once remained silent are now speaking up against what they describe as workplaces that ignore or cover-up years of harassment and assault.
On Monday, Johnson, 55, issued a video to the firm’s 40,000 employees in response to the reports saying: “We have no tolerance at our company for any type of harassment.”
Male-dominated Wall Street has long struggled with its treatment of women. In a 1990s class-action lawsuit, women claimed harassment at brokerage Smith Barney, where one branch’s basement playpen known as the “boom-boom room” epitomized a frat-house atmosphere. State Street Corp. recently settled U.S. allegations that it discriminated against hundreds of women by paying them less than male colleagues.
Now, the allegations of sexual harassment at Fidelity may make it harder for Johnson to accomplish one of her key goals: recruiting more female employees. Johnson is the first woman to run Boston-based Fidelity, which is controlled by her family and manages $2.3 trillion. She is one of the fund industry’s rare women CEOs and the only female speaker featured solo at the Securities Industry and Financial Markets Association conference Tuesday, according to the program on Sifma’s website.
“We have a real need in our business right now to recruit more women,” Johnson said in an interview last month for “The David Rubenstein Show: Peer-to-Peer Conversations” on Bloomberg Television. When women come into Fidelity branches, “very often, the first thing they say when we’re trying to get them paired up with a rep is, ‘I’d like to work with a woman.”’
In her speech, which focused on the importance of financial services companies embracing digital technologies, Johnson also said recruiting was a key challenge.
“Attracting the next generation of talented young associates is an extremely important issue for me and Fidelity’s senior leadership team,” Johnson said.
Recruiting Issues
John said that “artificial intelligence and machine learning will be two of the important technologies that will impact the financial services industry over the next decade.” She added: “And a key part of this is attracting younger workers not only as customers, but also as employees.”
Women have historically been underrepresented in the asset-management industry. They’ve made up about 10 percent of fund managers in the U.S., compared with 36 percent of lawyers and 33 percent of doctors, according to Morningstar Inc. research published last year.
Fidelity and other money managers may face a flood of complaints “now that the lid is off,” said Davia Temin, president and CEO of Temin & Co., a New York based crisis-management company.
Going forward, Johnson has to continue to “set the tone” that the organization will take every case that comes to light seriously and emphasize there’s also a business case for doing so, said Temin. While Fidelity is a closely held company without public shareholders, its customer base cares about these issues, she said. Some public pension funds already demand that women be included on teams that manage their money.
Weinstein Fallout
The recent scandal involving movie producer Harvey Weinstein may also be emboldening some employees in various industries to come forward and encouraging companies to act swiftly, said Denise Murphy, chair of the labor and employment group at Rubin & Rudman, a Boston law firm.
“With all the publicity surrounding Harvey Weinstein, victims of sexual harassment are feeling empowered and not feeling alone,” Murphy said. “And employers, like Fidelity, are stepping up to address it head on.”
Johnson is in a high-profile but challenging position as she tries to ensure a diverse and respectful workplace for employees.
“Some people expect that a woman CEO will be more of an advocate of other women in her firm,” said Temin. “That is mostly true, but sometimes the expectations are set too high, that she can fix all of this with a wave of her wand by 2018, and make it all go away.”
--With assistance from Sabrina Willmer and Emily Chasan
To contact the reporters on this story: Charles Stein in Boston at cstein4@bloomberg.net, Laura Colby in New York at lcolby@bloomberg.net, Miles Weiss in Washington at mweiss@bloomberg.net.
To contact the editors responsible for this story: Margaret Collins at mcollins45@bloomberg.net, Janet Paskin at jpaskin@bloomberg.net, John Hechinger, Josh Friedman
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