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Money Management

Abigail Johnson makes rare speech as Fidelity deals with harassment

Abigail P. Johnson
Abigail Johnson

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 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, Ms. Johnson said she wants to create a workplace that is free of sexual harassment.

"I won't tolerate it and nor should anyone else," Ms. Johnson said. This is "critical" for the industry, she said.

Ms. 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, Ms. Johnson 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."

The allegations of sexual harassment at Fidelity may make it harder for Ms. Johnson to accomplish one of her key goals: recruiting more female employees. Ms. Johnson is the first woman to run 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," Ms. Johnson said in an interview last month. 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, Ms. 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," Ms. Johnson said.

Ms. Johnson 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% of fund managers in the U.S., compared with 36% of lawyers and 33% 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, Ms. 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 Ms. 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.