BlackRock’s head of human resources, Jeff Smith, who suddenly left the company in July, was apparently fired for indulging in an office romance with a colleague, reports Bloomberg.
This year two senior executives of the $6.8 trillion asset management company, have been let go. Earlier this week, Mark Wiseman, global head of active equities was asked to leave the firm for failing to disclose his relationship with an employee reporting directly to him.
Both the departures were announced in strongly worded memos circulated among the 16,000 employees of the firm, showing how serious the company is about the conduct of its senior management.
“We expect every employee of BlackRock, especially our most senior leaders, to uphold the highest standards of conduct,” Larry Fink, chief executive, and Rob Kapito, president, said in the memo.
In 2018, BlackRock held a meeting of its global executive committee, a group of about 20 of the company’s senior-most executives, which included both Smith and Wiseman, where Fink discussed the conduct of senior management employees and how they would be held to a higher standard of ethics and conduct.
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BlackRock is the world’s largest asset management company and has shares in almost all major US companies. This increases its responsibility in maintaining higher standards as far as governance and social issues are concerned. Also, it can push a similar agenda in the corporate world too because of its high-profile presence and stake in most companies.
The social environment on gender issues has pushed workplace conduct to centre stage. No company can afford to ignore possible harassment cases. Quite recently, the CEO of McDonald’s, Steve Easterbrook, resigned from his position due to a relationship with a colleague. In 2018, Intel chief executive Brian Krzanich resigned for a similar reason. Intel has a very strict non-fraternization policy at the workplace.
The departure of 49-year-old Wiseman stunned many people in the organization as he was seen as a possible successor to Larry Fink. Wiseman himself wrote an internal memo admitting his infringement. “I am leaving BlackRock because in recent months I engaged in a consensual relationship with one of our colleagues without reporting it as required by BlackRock’s Relationships at Work Policy. I regret my mistake and I accept responsibility for my actions.”
Wiseman is a former Canadian pension manager and joined BlackRock in 2016 from the Canada Pension Plan Investment Board, His wife, Marcia Moffett, is also a part of the company.
Wiseman chaired BlackRock Alternative Investors, along with handling the active equities business.
Smith was in charge of human resource staff in more than 30 countries. Manish Mehta, in charge of markets and investments, has replaced Smith as HR head.
Smith joined the company in 2009 with BlackRock’s acquisition of Barclays Goldman Investments (BGI), where he was working. He was earlier with Times Warner.
Smith is a psychology major with a specialization in industrial organization psychology.
Fink has reassured its clients that the departure of the two senior staffers will have no impact on the business or the divisions they were handling. According to him, their chain of leadership is deep and competent.
BlackRock has grown in size after the acquisition of Barclays Investment and is now the world’s largest fund manager. Interest in exchange funds and portfolio management has pushed the group’s net worth to $7 trillion. Before buying out BGI it was $1.3 trillion.