It’s an embarrassing episode for a company that since its inception has cultivated a friendly image. Fidelity is in Boston, far from Lower Manhattan. Founded in 1946, Fidelity specializes in the quieter, more stately side of the financial business: asset management. The company manages $2.3 trillion in customer money. More than half of that is in retirement accounts. “At every turn, we're here to help you plan,” it proclaims on its website with the image of a smiling woman.
Abigail Johnson has been chief executive since 2014. She's one of the most powerful and visible women in finance (and also one of the richest women in the world). Yes, her grandfather founded Fidelity, and her father ran it before handing the reins to her, but Johnson isn't a token woman at the top. She's made sure others succeed along with her. Kathleen Murphy is president of personal investing, one of the most senior roles at Fidelity. Like Johnson, Murphy has also landed on Fortune's “Most Powerful Women” list.
The assumption is often made that if there are more women at the top, a lot of these problems will sort themselves out. The whole culture will change. But the problems at Fidelity are an alarming reminder that a female CEO — and president — isn't enough. Fidelity ranked highly on some lists of best companies for female employees, yet still, senior men allegedly harassed younger women.
We don't know exactly what happened. The Wall Street Journal, which broke the story, says C. Robert Chow, 56, resigned “amid allegations that he made inappropriate sexual comments to colleagues, according to people familiar with the matter.” The Journal also reported that Gavin Baker, 41, was fired in September for “allegedly sexually harassing a junior female employee, according to an attorney for the woman and other people familiar with the matter.” Baker's attorney denies the accusations.
The Journal goes on to say that many people in the company — men and women — have complained about a workplace filled with “sexual innuendo,” “disparaging remarks about appearance” and bullying.
I've spoken with Murphy a few times, most recently in January for an article about women and investing. For years, Murphy has been pushing to make women feel more confident about handling their money.
“I think the financial services industry was created by men and for men in its formative stages,” Murphy told me then. “We need to make financial services more engaging and approachable for women.”
She talked about numerous ways Fidelity was reaching out to women, including webcasts and meetings for women only at companies it runs 401(k) programs for. Murphy has shared her story of growing up in a family of six kids and being “marched down to the local bank” because of an emphasis on saving. She didn't start investing until well into her adulthood, when her father died and she saw how her mother struggled to understand the family finances. Murphy vowed to change that — for her family and others.
After the call, Murphy's staff followed up, providing data showing how for the past decade, female account holders at Fidelity had better investment returns than men.
This is the positive female-empowerment story Fidelity wanted to tell about women and money, a story of how the company was already trying to change the male-dominated Wall Street culture. Instead, Fidelity is in the headlines for a “Harvey Weinstein problem.”
The full details haven't come out yet, but it is jarring enough that Johnson sent a video message to all 40,000 employees Monday.
“Today, I’d like to remind everyone that we have no tolerance at our company for any type of harassment,” Johnson said. “We simply will not and do not tolerate this type of behavior, from anyone.”
The company has a 1-800 hotline for anyone to anonymously report harassment or unethical behavior, and Johnson is bringing in consultants to help review policies and figure out ways to ensure this never happens again.
“This is an extremely important issue for me and the leadership team,” she told employees.
The bottom line is: Sexual harassment happens in 2017, even at companies with women at the top and even at places that try to have a more respectful and genteel culture.
Fidelity was supposed to be different from the rest of Wall Street. It turns out it wasn't. That's probably true of a lot of other firms.
A Boston Globe columnist wrote Monday that Johnson has an opportunity to “retire the old boys' club.” Let's hope it happens.